Should decision management and decision control be separated in small and large firms?

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Ideally, decision management and decision control should be separated and performed by different parties in both small and large firms, but this is not always feasible.

Decision control refers to the making of decisions within a company. These decisions may be financial, procedural, operational, and/or strategic, and they are usually made by a board of directors, a boss, or both.

Decision management carries out the decisions made by the board or boss. It involves implementing the decisions practically on a day-to-day basis in every part of the firm. Decision management is usually carried out by managers at various levels of the firm.

For proper division of labor and for checks and balances, these two processes ought to be separated. From a practical standpoint, there arises a conflict of interest when the same people make and implement the decisions. Those people may be quite attached to those decisions and not necessarily notice when something isn't working well on a practical level. They therefore can be resistant to change.

When a manager implements the decisions made by a board or boss, he or she can observe with a more objective eye how they are playing out in real time. The manager can notice difficulties with the decision and make recommendations that might work better in daily operations. On the other hand, if a manager has too much in the way of decision control, a conflict of interest similar to the one with the board or boss may arise. There would also be a lack of accountability.

All that said, though, often in small firms, there are simply not enough people to have different groups controlling and managing decisions. In this case, those in authority have to be extra careful not to fall into the traps discussed above. There is a need for practicality, objectivity, and humility.

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