Decision Management and Decision Control

Decision Management and Decision Control
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Decision Management and Decision Control
Decision management is the implementation and initiation of decisions while decision control is monitoring and ratification of decisions. Companies that are for both non-profit and for-profit face this challenge of separating between decision control and decision management. The study of organizations dates back to 1776 where Adam Smith advocated for full control and ownership of a company. However, this is possible in sole proprietorship with no employees or few of them. The manager and owner can make informed decision on maximizing profits and make tradeoffs between the long term and short term CITATION JTa12 \l 1033 (Taylor, 2012).
In the modern world, firms are big and complex for one person, family, or stakeholders to own and run. This is possible if people sign contracts for every eventuality possible. However, it is not possible to foresee every kind of eventuality. Therefore, not all participants in a cooperation will care about the management of the firm but about the benefits they claim. Most managers divide the decision problem into two, the decision implementation and initiation, which is the decision management while ratifying and monitoring is decision control.
In small firms as well as large firms with simple decisions can economize on decision costs by combining decision management and decision control to a few people CITATION Bri09 \l 1033 (Zimmerman, 2009). However, in such cases there is need for those who will watch the implementation process. When combining the two processes residual claims reside with a group of people who are close business associates, family members, or trustworthy people. Examples of these firms are partnersh...