Meaning of
decision making
Decision making
means analyzing different alternatives
and arriving at decision in the face of a particular situation about what to do
and what not to do. In this way decision
making means reaching a conclusion or final decision which can be implemented
as a solution of a problem. Since the
managers are invariably faced with some problem or the other for which they
have to find a solution, it is said that decision making is perpetually needed
and simon has very pertinently observed that “ to make decision is management”
According to GEORGE R.TERRY,” decision making is the selection based on some criteria from two or more possible alternatives.”
Characteristics
or nature of decision making:
1.
It is a process of selecting the best from the
alternatives: the first characteristic of decision making is that under
it the best alternative is selected out of the many available ones. There are many ways to sole a problem. The manager selects the best one out of them all for example, if an organization has the
problem of increasing sales, there can be many ways of solving this problem
like reducing prices, more and good advertisement, making available the
facility of selling goods on credit, etc.
the manager has to select the best appropriate alternative out of them.
2.
DECISION
MAKING IS BASED ON RATIONAL THINKING: ration thinking is considered to
be essence of decision making because the conclusions arrived at with the help
of decision making and their success depends on rational thinking or intensive
study.
3.
DECISION
MAKING IS ALWAYS RELATED TO SOME PROBLEM OR CONFLICT: since the purpose
of decision making is to find out solution to problems or conflicts, it is
naturally related to them. In other
words, if there are no problems or conflicts, decision making ad manager will
both come to their importance. In this context it is said that problems are
diet or food upon which a manager lives and prospers.
4.
IT
INVOLVES THE EVALUATION OF VARIOUS AVAILABLE
ALTERNATIVES: it is
evident that in case there is only one solution to a problem, decision making
is not needed. There should be many
alternatives for taking a decision. When
there will be many alternatives, they will be evaluated through the medium of
decision making. In other words, the
best alternative will be chosen after taking into consideration merits and
demerits.
5.
DECISION
MAKING IS AIMED AT ACHIEVING ORGANISATIONAL GOALS: decision making is
not a futile exercise because through its medium efforts are made to achieve
the goals of an organization successfully.
6.
DECISION
MAKING INVOLVES COMMIMENT: Every
decision taken by a manager is a promise.
In other words, a manager through the medium of decision, tells us that
the consequences of the decisions taken by him will be good.
7.
IT
IS BASICALLY A HUMAN ACTIVITY: One of the special characteristics of
decision making is that it is a human activity.
Decisions are taken by men and are meant for them.
8.
DECISION
MAKING IS BOTH A MANAGERJIAL FUNCTION AND AN ORGANISATIONAL PROCESS: It
is a managerial function because decision making is the chief responsibility of
all the managers. It is called
organizational process because there are many decisions which a manager cannot
take single handed and they need a group of managers or a committee of
managers.
9.
DECISION
MAKING IS THE CORE OF PLANNING: Although decision making is needed
for all the managerial functions, yet
planning is completely dependent on decision making because all the chief or
major decisions are taken here. When
under planning the functions of determining objectives, policies, procedures,
rules, etc., are performed, decision making has a special importance.
10.
DECISION
STRARTS ACTION: When a problem arises, work is immediately suspended and till a decision is taken the
work cannot recommence. Therefore, the
future activity starts only after a decision is taken.
11.
UNCERTAINTY
OF RESULTS: It is true that the best alternative is chosen only after an
analysis of the various alternatives but the consequences of the best
alternative are uncertain as it an imaginative action with reference to future.
12.
IT
IS A UNIVERSAL MARK OF A MANAGER: Decision making is a universal mark of
a manager. It means whatever a manager does is based on decision making and
this speciality is found every where and in every manager.
13.
IT
MAY BE NAGATIVE: Decision can both be positive and negative, positive
decision means deciding to do something while negative decision means doing
nothing.
OCCASIONS FOR DECISION MAKING
1.
AT
THE TOME OF GETTING ROUTINE INFORMATION: The first opportunity to take
decision is provided to the manager at the time of getting daily routine
information. For example, on the basis
of sales information, a decision has to be taken regarding the declining sales
and; taking decision to take action against the regular absentees on the basis
of the attendance register for the employees.
2.
AT
THE TIME OF GETTING SPECIAL INGORMATION: Apart from routine information,
the managers sometimes get special information from the subordinates: an occasion for decision making arises when
the subordinates are helpless in solving a problem or the subordinates have not
been given any specific instruction regarding that problem. For example, when a supervisor requests the
manager to purchase some new machinery particularly when it has not been working
satisfactorily even after having been repeatedly repaired, it will be treated
as a special information and on the basis of this information a decision will
be taken by the manager.
3. AT THE TIME OF INITIATIVE OF THE
EXECUTIVE CONCERNED: It is not only the routine information of the special information which alone provides
occasions for decision making, but sometimes managers, keeping in view the
business situations, take decision on their own initiative. For example, a manager can take decision to
provide some special facilities to the employees of the organization if he
finds that some rival organization is going to do so. Similarly, if a manager gets information
about some modern machinery being available, he can take a decision to replace
the old machinery.
DECISION MAKING IN PRACTISE
The
practice of decision making for a business organization is no secret. various
managerial functions are performed only through decision making. On its basis it can be asserted that it is
not a new idea but is as old as the business itself. The only difference is that previously
decision making depended on unscientific methods but in modern times with the
development of business there is a corresponding increase in its complexities
and, therefore, modern techniques. The
obvious answer is in the nature of the business. It is, however, a different
matter that all he managers do not have the knowledge on the modern
techniques. When they start getting
information about these techniques they can be expected to utilize it in the
solution of their problems
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