Decision-making can be regarded as an outcome of mental processes leading to the selection of a course of action among several alternatives. Every decision-making process produces a final choice. The output can be an action or an opinion of choice. The organizational decision-making process involves proper and efficient implementation of strategic plans and methods to achieve the desired business objective. However, a failure to calculate and anticipate the implications of key decisions can derail a company from its goals and objectives.
Decision-making is really a crucial activity as far as performance of managerial personnel is concerned. Managers are to take many decisions on various issues to meet the targets and goals. Business is centered on good decision for phenomenal growth. A manager is supposed to get the work done by others and so, many decisions taken are to be passed on to the functionaries for proper discharge of the same. A good and timely decision is tantamount to wealth earning for the company.
Decision-making is arriving at a judgment based on analysis of historical data and pros and cons of the said analysis. The Judgment is made after scrutinizing various alternatives. A manager is to select the best alternatives to arrive at the effective decision. More the planning is accurate more the decision making process is easy and fruitful. Decision making process is inter-alia dependent on three factors that is—–
- Mental power
There are two types of decisions that organizations make – short-term decisions and long-terms decisions. Problems arising out of day to day business activities i.e. routine problems require short-term decision, whereas long-term decisions are those which have year-on-year effects on the business.
In a day to day function of an organization, a manager is to encounter various problems and find out solutions thereof. Solutions are derived by taking remedial measures in form of correct decision. Out of many, the best suited alternative is picked up for taking decision on a matter.
While taking decisions, a proper logic application is required. Any emotional or non-rational thoughts should not influence your logic and drag you to any deviation. You must be explicit clear about the objective and aftermath of the proposed decision. If the objective is not defined, genuineness of decision is haywire.
How to make decisions correctly.
Making decision is not an easy task, rather it is a complicated process. To take correct decision, the following steps are to be understood very properly.
- Scanning of the situation: Proper scanning of the situation from every corner renders exact understanding about the problem, in question. Past experience of such exercise of scanning the situation will give a clue for choosing a correct path of decision making.
- Jumping the gun: It is often seen that the problem on which decision is sought for is not fully understood, or it is quite misunderstood. Under this situation, decision making becomes impulsive. So to make decision making meaningful and easy, the foremost thing is to first understand the root cause of the problem, make proper identification of the same and scan the data of past situational analysis.
- Choice of many alternatives: When a manager enervates to find out a solution to a problem, he has to look for various alternatives instead of sticking to one stereotype method. Various alternatives open a space for him to see the problem from different angles and then to find out a solution out of many alternatives.
- Consensus: Often one difficulty facing an organization is that multiple divisions are involved in the overall decision making process. Making a decision can have different implications for each respective division. Gaining agreement from all stakeholders can be a challenge. When a companies overall strategy depends on the support of all business units, organization wide support is crucial.
Sometimes, it is also difficult to convince top management about the decision taken by the manager on a particular matter. For example, a marketing manager wishes to suspend sales of a particular product due to tiny response from market. But, the sales manager does not agree to it since the product earns enough to offset various expenses made towards sales promotion, travel of sales personnel, etc. Further, the production manager finds its design less intricate which enables him ease to produce the particular product. Now, the marketing manager has to convince his decision of discontinuing the particular product to his counterpart. Otherwise, it will prove as a foolhardy decision situation for him. In that case, any exigency out of his decision will be a burden for the organization and will influence hard on the overall growth of the organization.
So, in nut-shell, decision making comprises of several scientific approaches, particularly, following up of the above steps. If they are followed with courage, conviction and overall knowledge about the particular business, one can reach to a foolproof decision. And this is the essence of decision making process which is the Bible for any decision maker.