How an MBA Helps You to Be an Effective Decision-Maker

How an MBA Helps You to Be an Effective Decision-Maker

How an MBA Helps You to Be an Effective Decision-Maker

You make decisions every day of varying sizes and consequences. But each one of them hinges on a cognitive process, weighing pros and cons and coming to the conclusion that seems best to you. Decision-making in itself is a skill that can be improved with study. It is also perhaps one of the most important skills a leader in business can possess, and as such it is a focus of many MBA programs.

Let’s explore how decision-making works; the role it plays in business and how online MBA programs can help you improve this skill.

What is Decision-Making?

Wikipedia’s page on decision-making offers a useful operating definition:

Decision-making can be regarded as a problem-solving activity terminated by a solution deemed to be optimal, or at least satisfactory. It is therefore a process which can be more or less rational or irrational and can be based on explicit or tacit knowledge and beliefs.

In simpler terms, explicit knowledge is information one has that is directly relevant to a situation—knowing which of two countries has a lower corporate tax rate, for example. Tacit knowledge is a deeper and more general knowledge you bring to the situation—an understanding of how tax rates affect various aspects of your business, maybe, or whether the costs of a higher tax in one country are mitigated by other local factors.

As humans, we are generally trying to make decisions that will ultimately benefit us. It can be difficult to see all of the potential ramifications of a choice. Sometimes a short-term gain can come at the cost of long-term sustainability. It also helps to be able to think critically about what evidence is available and to take into account different forms of criteria.

Decision-Making in Business

Let’s start from the top down. The head of most large companies is the Chief Executive Officer. Unlike most positions within the company such as human resources, IT, R&D, marketing, or accounting, a CEO’s title is not limited to one particular task or specialization. Rather, a CEO’s primary responsibility is to make good strategic decisions that will maximize the valuation of the company and fulfill its corporate mandate.

The first step is problematization. Inc. magazine helpfully breaks this down into three interrelated levels:

  • Macrocontext: This is where the big picture comes in. How do national and international laws mediate problem-solving? Are there cultural factors to be considered? What is the economic and ecological significance of each option at hand?

  • Mesocontext: This is the context of the organization(s) involved. What is the structure of the company, and how will its corporate culture influence the decision?

  • Microcontext: This describes the immediate specifics of the problem. These include the personalities of the people who will be tasked with carrying out the plan, the resources available and the interests of relevant stakeholders.

A clear understanding of these contexts is the foundation of making the right choice. The second active part of decision-making in management is being able to set effective policies and strategies to make sure that the right choice is executed correctly. There is a vast body of research around optimization of this process, and this is where education comes in.

Online MBA Programs and Decision-Making

At the postgraduate level, decision-making is regarded as a science, and educators teach methods that have been empirically proven to be effective. Online MBA programs focus on teaching graduates to make data-driven, evidence-based decisions with confidence and vision. At Aston, our core curriculum focuses on the following concepts:

  • Measuring and enhancing financial performance

  • Understanding operations management

  • Crafting organizational strategy via proven concepts, frameworks and models

  • Studying the global economic environment

  • Systemizing leadership of complex organizations

Every student is free to pursue their areas of interest within the MBA program, including marketing, accounting and talent development, but what each stream has in common is that every student is equipped with the skills necessary to become a leader in the niche which suits them best. This is because, as we noted earlier, decision-making is a skill in and of itself which can be developed—and in fact, must be developed by anyone who aspires to reach the top of their profession.

To learn more about Aston’s triple-accredited online MBA program available for Canadians, contact us today to speak with a representative and download our brochure.

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