Explain principle of Decision-making.
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Definition of Decision-Making:
Most writers on management think that management is basically a decision-making process.
They argue that it is only through making decisions that an organisation can accomplish its short-term and long-term goals.
A decision is an act of selection or choice of one action from several alternatives.
Decision-making can be defined as the process of selecting a right and effective course of action from two or more alternatives for the purpose of achieving a desired result. Decision-making is the essence of management.
According to P. F. Drucker – “Whatever a manager does he does through making decisions.” All matters relating to planning, organising, direction, co-ordination and control are settled by the managers through decisions which are executed into practice by the operators of the enterprise. Objectives, goals, strategies, policies and organisational designs are all to be decided upon in order to regulate the performance of the business.
The entire managerial process is based on decisions. Decisions are needed both for tackling the problems as well as for taking maximum advantages of the opportunities available. Correct decisions reduce complexities, uncertainties and diversities of the organisational environments.
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George Terry defines decision-making “as the selection of one behaviour alternative from two or more possible alternatives.”
In the words of D. E. Mcfarland:
“A decision is an act of choice wherein an executive forms a conclusion about what must be done in a given situation. A decision represents behaviour chosen from a number of alternatives.”
The definition of decision-making has three different but inter-related implications.
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These are as follows:
1. When the managers make decisions, they exercise choice. They decide what to do on the basis of some conscious and deliberate logic or judgement.
2. When making a decision the managers are faced with alternatives. An organisation does not take a wise manager to reach a decision when there are no other possible choices. It does require wisdom and experience to evaluate several alternatives and select the best one.
3. When taking a decision, the managers have a purpose. They propose and analyse the alternative courses of action and finally make a choice that is likely to move the organisation in the direction of its goals.
Importance of Decision-Making:
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Management is essentially a bundle of decision-making process. The managers of an enterprise are responsible for making decisions and ascertaining that the decisions made are carried out in accordance with defined objectives or goals.
Decision-making plays a vital role in management. Decision-making is perhaps the most important component of a manager’s activities. It plays the most important role in the planning process. When the managers plan, they decide on many matters as what goals their organisation will pursue, what resources they will use, and who will perform each required task.
When plans go wrong or out of track, the managers have to decide what to do to correct the deviation.
In fact, the whole planning process involves the managers constantly in a series of decision-making situations. The quality of managerial decisions largely affects the effectiveness of the plans made by them. In organising process, the manager is to decide upon the structure, division of work, nature of responsibility and relationships, the procedure of establishing such responsibility and relationship and so on.
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In co-ordination, decision-making is essential for providing unity of action. In control, it will have to decide how the standard is to be laid down, how the deviations from the standard are to be rectified, how the principles are to be established how instructions are to be issued, and so on.
The ability to make good decisions is the key to successful managerial performance. The managers of most profit-seeking firms are always required to take a wide range of important decision in the areas of pricing, product choice, cost control, advertising, capital investments, dividend policy, personnel matters, etc. Similarly, the managers of non-profit seeking concerns and public enterprises also face the challenge of taking vital decisions on many important matters.
Decision-making is also a criterion to determine whether a person is in management or not. If he participates in decision-making, he is regarded as belonging to management staff. In the words of George Terry: “If there is one universal mark of a manager, it is decision-making.”
Most writers on management think that management is basically a decision-making process.
They argue that it is only through making decisions that an organisation can accomplish its short-term and long-term goals.
A decision is an act of selection or choice of one action from several alternatives.
Decision-making can be defined as the process of selecting a right and effective course of action from two or more alternatives for the purpose of achieving a desired result. Decision-making is the essence of management.
According to P. F. Drucker – “Whatever a manager does he does through making decisions.” All matters relating to planning, organising, direction, co-ordination and control are settled by the managers through decisions which are executed into practice by the operators of the enterprise. Objectives, goals, strategies, policies and organisational designs are all to be decided upon in order to regulate the performance of the business.
The entire managerial process is based on decisions. Decisions are needed both for tackling the problems as well as for taking maximum advantages of the opportunities available. Correct decisions reduce complexities, uncertainties and diversities of the organisational environments.
ADVERTISEMENTS:
George Terry defines decision-making “as the selection of one behaviour alternative from two or more possible alternatives.”
In the words of D. E. Mcfarland:
“A decision is an act of choice wherein an executive forms a conclusion about what must be done in a given situation. A decision represents behaviour chosen from a number of alternatives.”
The definition of decision-making has three different but inter-related implications.
ADVERTISEMENTS:
These are as follows:
1. When the managers make decisions, they exercise choice. They decide what to do on the basis of some conscious and deliberate logic or judgement.
2. When making a decision the managers are faced with alternatives. An organisation does not take a wise manager to reach a decision when there are no other possible choices. It does require wisdom and experience to evaluate several alternatives and select the best one.
3. When taking a decision, the managers have a purpose. They propose and analyse the alternative courses of action and finally make a choice that is likely to move the organisation in the direction of its goals.
Importance of Decision-Making:
ADVERTISEMENTS:
Management is essentially a bundle of decision-making process. The managers of an enterprise are responsible for making decisions and ascertaining that the decisions made are carried out in accordance with defined objectives or goals.
Decision-making plays a vital role in management. Decision-making is perhaps the most important component of a manager’s activities. It plays the most important role in the planning process. When the managers plan, they decide on many matters as what goals their organisation will pursue, what resources they will use, and who will perform each required task.
When plans go wrong or out of track, the managers have to decide what to do to correct the deviation.
In fact, the whole planning process involves the managers constantly in a series of decision-making situations. The quality of managerial decisions largely affects the effectiveness of the plans made by them. In organising process, the manager is to decide upon the structure, division of work, nature of responsibility and relationships, the procedure of establishing such responsibility and relationship and so on.
ADVERTISEMENTS:
In co-ordination, decision-making is essential for providing unity of action. In control, it will have to decide how the standard is to be laid down, how the deviations from the standard are to be rectified, how the principles are to be established how instructions are to be issued, and so on.
The ability to make good decisions is the key to successful managerial performance. The managers of most profit-seeking firms are always required to take a wide range of important decision in the areas of pricing, product choice, cost control, advertising, capital investments, dividend policy, personnel matters, etc. Similarly, the managers of non-profit seeking concerns and public enterprises also face the challenge of taking vital decisions on many important matters.
Decision-making is also a criterion to determine whether a person is in management or not. If he participates in decision-making, he is regarded as belonging to management staff. In the words of George Terry: “If there is one universal mark of a manager, it is decision-making.”
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