Decision making is an integral part of every manager’s job. Decision making has a wide-range, covering matters from selection of the venue for holding a meeting, to significant issues such as, assignment of resources, hiring and firing of personnel, rate of dividend, merger etc.
Decision making is not an the monopoly of top management alone, though it is true that decisions made at this level are of far-reaching importance for the organization as a whole.
Definition of Decision making
George R. Terry: “Decision making is the selecting of an alternative, from two or more alternatives, to determine an opinion or a course of action.”
Andrew Szilagyi: “Decision making is a process involving information, choice of alternative actions, implementation, and evaluation that is directed to the achievement of certain stated goals.”
Henry Sisk and Cliffton Williams : “A decision is the selection of a course of action from two or more alternatives; the decision-making process is a sequence of steps leading to that selection.”
Importance of Decision making
Decision making is an indispensable component of the management process. It permeates of all management and covers every part of an enterprise. In fact whatever a manager does, he does through decision-making only; and the end products of manager’s work are decisions and actions.
A manager has to decide :-
- What are the long term objectives of the organization, how to achieve these objectives, what strategies, policies, procedures to be adopted.
- How the jobs should be structured what type of structure, how to match jobs with individuals.
- How to motivate people to peak performance, which leadership style should be used, how to integrate effort and resolve conflicts.
- What activities should be controlled, how to control them.
Thus, decision-making is a central, important part of the process of managing.
Factors Involved in Decision making
There are two kinds of factors to be considered in decision-making in favor of any alternative.
- Tangible Factors
- Intangible Factors
Tangible Factor
Among the tangible factors relevant to decision-making the important ones are:-
- Sales
- Cost
- Purchases
- Production
- Inventory
- Financial
- Personnel
- Logistics
The effect of any decision on one or more of the tangible factors can be measured and therefore it is easy to consider the pros and cons of every decision. Decisions based on these factors are likely to be more rational and free from bias and feelings of the decision-maker.
Intangible Factors
Among the intangible factors which may influence decision-making in favor of any alternative, the important ones are the efforts of any particular decision
- Prestige of the enterprise
- Consumer behavior
- Employee morale and so on.
Accurate information and data about these factors is not easy to obtain, Therefore, intuition and value-judgement of the decision-maker will assume a significant role in the choice of a particular alternative.
Common Difficulties In decision-making
Some common difficulties faced in making decisions and implementing them are as follows.
- Incomplete information
- Un-supporting Environment
- Non-Acceptance by Subordinates
- Ineffective Communication
- Incorrect Timing
1. Incomplete information
This is a major problem for every manager. Lack of information leaves a manager adrift in a sea of uncertainty. Not only this, most decisions involve too many complex variables for one person to be able to examine all of them fully.
2. Un-supporting Environment
The environment physical and organizational that prevails in an enterprise affects both the nature of decisions and their implementation.
If there is all round goodwill and trust and if the employees are properly motivated, the manager is encourage to take decisions with confidence.
3. Non-Acceptance by Subordinates
If subordinates have to stake in the decision or are likely to be strongly affected by it, acceptance will probably be necessary for effective implementation. On the other hand, subordinates may not really care what decision is reached. In such situations, acceptance is not an issue.
4. Ineffective Communication
Another important problem in decision-making is the ineffective a communication of a decision. This makes implementation difficult. The manager should, therefore, take care to communicate all decisions to the employees in clear, precise and simple language.
5. Incorrect Timing
In decision-making, the problem is not merely of taking a correct decision. It is also of selecting an appropriate time for taking the decision. If the decision is correct but the time is inopportune, it will not serve any purpose.
Conclusion
At last words, Decision-making is a process involving information, choice of alternative actions, implementation and evaluation that is directed to the achievement of certain stated goals.
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