Every second faced with the problem of choice, the complexity of decision-making. Often we don’t know what to do. Thinking takes us a huge amount of time. Probably, each of us would like to learn how to quickly find the right, most beneficial and correct solution. The best minds in the world have developed an excellent decision-making method - decision-making matrix.
What it is?
The decision-making matrix in management is one of the simple and effective decision-making methods. You need to select key criteria for the situation and understand what level of significance is appropriate for each of them.
This method helps the decision to put on shelves so as not to load the head with many different details. In addition, thanks to the matrix, you can understand at what stage of development the situation is, and what is the general picture of what is happening.
In production, different situations occur. Often, an experienced leader easily solves typical tasks, problems, because once he had already encountered this. However, the world is changing very quickly: new laws, technologies, companies appear, an inflationary leap may occur, a crisis may ensue. Atypical tasks are difficult to solve, and even more so in the short term.
In any case, it is important not to miss the details, because sometimes they can help solve the problem in the best way.
That is why managers often resort to decision matrices. They allow you to make a managerial decision quite quickly, most correctly and not to miss the slightest detail.
It is important to note that an ideal matrix does not exist. For each specific case or problem, you need your own, unique matrix that will solve exactly your issues and will be directed to your company.
How to build a matrix of managerial decision-making?
Take a blank sheet of paper or take advantage of the capabilities of your computer. The first thing we need to do is draw a table. Rows are your options for solving the problem, and columns are factors that influence your choices.
After you have written out absolutely all the solution options and important factors, it is necessary to assess the importance of each factor written out, that is, how important it is, in your opinion, of course. As an estimate, you can use a point scale, for example, from one to five, where one point is a small factor, and 5 points (the highest score) means a very significant factor.
After the process of evaluating the factors is completed, it is necessary to calculate the total number of points for each option separately. After that, you need to find the option that scored the maximum number of points - it becomes the best.
Payment matrix - a method of making managerial decisions
When making a decision, we need to choose exactly which would be the best in a particular situation. One of the methods of making such a decision is a payment matrix.
Payment matrix is a method related to statistical decision theory. This method will help the manager to choose exactly the solution that is necessary in this situation. Typically, this method is used when necessary to select the strategy that is most suitable for achieving the goal.
A payment is understood as a monetary reward or utility that will be received as a result of combining a specific strategy with a specific situation (that is, the situation in which it will be appropriate to use this solution)
Payments can be presented in the form of a matrix. Payment depends on the events that actually occur. If the event does not happen, then the payment will be completely different.
Advantages of the method
The decision matrix has a huge range of advantages, the main of which are as follows:
- Validity and clarity. The matrix has clarity, that is, if you share your analysis with another person or group of people, and at the same time clearly substantiate the data, then this will facilitate the conviction of the interlocutor of the correctness of the decision.
- Time saving.
- Choosing the best solution.
- Availability of backup options. It may happen that the most impressive option for decision-making cannot be implemented. In this case, you do not need to re-analyze, because you will already have a whole set of fallback options. The only thing left to do is choose the most suitable one.
- Objectivity. Often we choose a solution based on our personal motives, forgetting to separate our own "I" and work. The decision matrix helps minimize subjective attitudes.
Disadvantages of the method
But this method also has its drawbacks:
- Some matrices are statistical. They can show the current state of the enterprise, but they will not help assess the dynamics of strategic processes.
- Some matrices offer alternative strategies. Unfortunately, this sometimes complicates the process of forming the necessary strategy for the matrix due to the ambiguity of the choice of strategy.
- Building some matrices requires a lot of mental investment.
- Matrices do not provide a specific, most suitable solution.
Matrix Types
After using the first decision matrices, scientists began to develop more and more new types of matrices. New methods helped solve a number of complex problems. These include: the choice of strategy, actions to develop a product, which product to develop, and so on.
Examples of decision matrices are given below:
- Eisenhower matrix (importance / urgency).
- Matrix of the Boston Consulting Group (indicators are growth rate, production productivity).
- McKinsey Matrix (indicators: enterprise competitive position and market attractiveness).
- Matrix - portfolio analysis (assessment of the economic activity of the enterprise).
- Matrix of Igor Ansoff (description of possible strategies of the enterprise in a growing market).
- Steiner matrix (classification of markets and classification of products on existing; new, but related to existing; completely new).
- Abel's matrix (selection of a draft strategy based on the customer groups served, needs and technology used).
Method application
An example of using a decision matrix is the choice of a purchase: a laptop or tablet.
In the selection lines, you respectively write: laptop / tablet.
In the columns you write down all factors (for example, price, weight, functionality, warranty period, availability of specific necessary programs, value).
After that, you give points to the laptop and tablet for each criterion. The product that scored the most points should be bought.
Thanks to the decision matrix, we can easily, with a minimum of effort, get the most profitable solution. This method is intended not only to select a product, but also to solve more serious, global problems.