The Empirical Study About Manager Rational Decision-making Capacity's Influence On The Quality Of Business Decision

The Empirical Study about Manager Rational Decision-making Capacity's influence on the Quality of Business DecisionAccording to the fierce market competition and the situation of corporate globalization wave, we can ensure that the key factor which decides the success or failure of a corporate is decision-making, especially strategic decision-making. Since China's accession to WTO in2001, Chinese enterprises'development space is broader, and appreciation space is larger. However, large enterprises lack competitiveness, and most mall enterprises have a short life, those problems have become more prominent. In essence, enterprises'decision maker is manager; Chinese managers'general shortcoming is that they lack the ability of rational decision-making. They just blindly copy the successful experiences of others, but ignored the balance of enterprises'organizational ability and organizational competitiveness. Blindly expansion may lead enterprises'fund strands break, which means lots of funds be invested into projects which can't earn much profit; and enterprise system is full of loopholes, haven't clear responsibility or clear reward/punishment system; it is hard for such enterprises to take a foot in fierce market competition. Above all, for Chinese enterprises'long-term, stable development, it is significant to enhance managers'rational decision-making ability. There are lots of studies which about manager rational decision-making in previous professors'research, but few study link the managers'personal factors with the decision-making quality. However, manager rational decision-making ability is largely related to managers'personal mettle. Edwards(1954) even raised managers'subjectivity to quite a high position, he insists that in the decision-making process, it is the managers'subjectivity but not objectivity which plays a major role. In China, the empirical study of Zhizheng Wu(2002) suggests that enterprises which have a better performance tend to make rational decision, which illustrates the importance of managers'rational decision-making for decision quality. This essay further subdivided manager rational decision-making into three dimensions, which are manager problem identification ability, innovation ability and risk perception ability. We will start from manager personal factors, to research the method for improving decision quality.The assumptions of our empirical study are listed below:(1) In China, Jingzhong Ye et al(2005)suggested that manager's perception of enterprise's problem determines the target of manager decision-making study and practices. As problem identification is the first stage of the manager decision-making process, which is suggested by Mintsberg(1973), problem identification actually influenced the whole decision-making process. Our essay assumes that manager problem identification capacity has positive influence on decision quality.(2) In 21st Century, highly developing technology is the main market background. Enterprises inevitably translated from the original market price bidding model, into the diversified market model, from that we can see the significance of innovation capacity in the process of enterprise development. Manu parashar suggested that manager innovation capacity can bring the enterprise short-term or long-term profit; in China, Lin Chen et al(1997)whose study found out that, most managers been surveyed believed that their innovation capacity can't manage enterprises'complex market environment. Thus, rational managers will be easier to realize that innovation capacity is an important aspect to enhance their decision-making capacity. So our essay assumes that manager innovation capacity has positive influence on decision quality.(3) It is generally believed that managers'risk preferences will be expressed through their risk perception, then influence decision-making results. That is, risk perception is the factor which directly influences the decision-making results. Le Pine, Colquitt and Erez(2000) believed that, risk perception can interact with the decision environment, then affect decision-making results. Managers, whose risk perception is closer to the decision environment, is more likely to make rational decisions. Our essay assumes that manager risk perception capacity has positive influence on decision quality.(4) Finally, our essay assumes that manager rational decision-making capacity has positive influence on decision quality. According to previous professors'research results and our study's special requirements, we designed corresponding scales and questionnaires; made the main survey from enterprise managers of high-tech development zone in Changchun and students of MBA Business School of Jilin University, to collect empirical data. Our essay use statistical analysis software SPSS16.0 to make the arrangement and analysis of sample data. First we will test our scale's reliability and validity, to confirm our questionnaire can describe the objective results our empirical research exactly. Second, we will use linear regression analysis method; make regression to find out the correlation between the three dimensions of manager rational decision-making and decision quality, to verify whether our assumptions are reasonable.According to the final empirical results, our empirical conclusions are as follows:(1) There is a positive correlation between manager problem identification ability and decision quality, the standardization coefficientβbetween manager problem identification ability and decision quality is 0.635, and the probability p which corresponds the significance level is 0.000. Our empirical results confirm that problem identification has an important position in the whole decision-making process.(2) There is a positive correlation between manager innovation capacity and decision quality, the standardization coefficientβbetween manager innovation capacity and decision quality is 0.387, and the probability p which corresponds the significance level is 0.000. Our empirical study further shows that confirm that manager innovation capacity not only improve enterprise's profits, but also enhance the quality of decision making.(3) There is a positive correlation between manager risk perception capacity and decision quality, the standardization coefficientβbetween manager risk perception capacity and decision quality is 0.428, and the probability p which corresponds the significance level is 0.000. Our empirical study result suggests that in specific decision-making environment, managers who is able to accurately perceive the risk degree of project, his decision quality is higher.(4) There is a positive correlation between manager rational decision-making capacity and decision quality, the standardization coefficientβbetween manager rational decision-making capacity and decision quality is 0.526, and the probability p which corresponds the significance level is 0.000. The empirical result shows that manager who makes decision rationally is easier to make a successful decision.Finally, at the end of our essay, based on the empirical results, we give out some recommendations about how to enhance manager decision-making capacity, and the future direction for our further research.