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Factors influencing Management Decision

Decisions making in organization by management its likely to be very complicated, as the

 both side (employer and employee) of the organization need to be take into consideration.

Adapting the field is essential because the internal policies and legislation may change time

to time. Factors that affect the management decision were divided into two, as internal and

eternal elements.

External

Changes in the National Economy

 The Changes in the national economy openly afects the business o a rm

and these indirectly hits the decision making o management especially

on recruitment, employment, redundancy implications, compensation and

rewards/salaries. During the recession period in national economy, the

retrenchment and revise or the minimum wages and salaries took place

in the rm. osman and colleagues !"#$%& stressed the signicant

intererence o national economy on ' policies. The growth in the

economy brings labour demand and also wages. ( stabili)ed internal

economy reinorces the organi)ations outcome where it benets theemployer and employee. Thereore the economic situation plays a vital

role in*uencing the decision o management.

Industry Characteristics

 The industry might also in*uencing the management decision in diverse

ways, the service industry like banking, education or health are e+pected

to be more delicate on the decision making on human resources relatedissues. ecause this industry deeply reliable on the e+pertise they hired

based on their skills and abilities. -ndustry like mining and construction

needs to consider the security level in the work area this to avoid

unnecessary compensations and penalties. These sort o things need to

be considered in decision making as its involved with employees lie,

health and organi)ations dignity.

Legislation/Regulation

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 The entire management decisions are e+pected to be in accordance with

legal obligation. (ll the rms need to ollow the government regulations

and implement the law in practice. ased on Tiwari and a+ena !"#$"&

argues that 'uman esources 0anagement policies shall depend on thelegislation and regulation o the counties. (lso, 0ello !"##1& argues that,

legislation and regulation have impacts on every unction and activity o 

an

2rgani)ation and its human resource management decisions. 3very rm

should consider the related law beore making any decision.

Actions of Unions

(ctions o unions also plays a role in decision making in the conte+t o 

human resources related in organi)ation. The management should

consider the demands o unions while planning the uture o the

organi)ations. imultaneously the labour contracts, breaking contracts,

compensations, determining the salaries and wages decisions need to

agree by the unions. Thereore, the decision o the rm in terms o human

resource management is to be considered under the in*uences o unions.

-n relation to this, it was ound by

 4ackson and collo5uies !$676& that, organi)ations with a union use more

ormal perormance appraisals, and this appraisal mainly to identiy

training needs.

Internal

Organizational Mission/Purose

 The decisions o the organi)ations shall meet their mission statement,

because it determines the outline o the rm should unction in.

Conse5uently the human resource policies also likely to be determine by

the mission statement. (s art and aet), !$667&, and artkus and

colleagues !"##89 "##1& stated that, by presenting values and philosophy,

mission statements acilitate both managements and employees non

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routine decision making. :urthermore a superlative mission statement

tends to be the oundation o organi)ation policies to inspire the

employees with contented including words about 5uality and social

benets.

!istory/"raditions/Past Practice

 The past history and practices also in*uencing the decision o 

management. The history discloses the right to the organi)ation. -t helps

to look back on employees beore deciding the rewarding them.

(ccordingly, traditions which show the e;cient methods or '0

unctions would be the base or related strategy, so the policies. The

history, traditions, and past practices o organi)ations could be the

oundation o resistance beore taking decisions.

osman et al. !"#$%& pointed that, a rm culture is one o the main

internal actors afecting the role o human resource department.

Priorities of "o Management

 The priorities o top management is one o the decision making in*uence.

 The internal promotion or increment, re5uired characteristics or the

recruitment and policies o 

wage and salary, relations with unions, breaking <ob contracts could all be

shaped through the importance, which top management personal interest

take place. These priorities also can be considered as politics, proessional

actions. The management concentrate to the internal harmony while

making decisions 0abey and alaman !$66=& stated that the importance

o shareholder priorities and management agendas on training and

development activities. The intererence o top management its one o 

the in*uences in decisions making.

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