What is Decision Making? Definitions and Importance of Decision Making
Each and every organization sets their specific objectives or targets towards which every organization's activities are carried on, and to do these Managers plays the most important role in sound and good decision making that makes an organization's performance smooth and successful.
Selection of best available alternatives which become beneficial and suitable for any individual or an organization is termed as decision making.
Decision making is very vital aspect where full attention has to be paid in solving problems and taking decisions regarding pricing policy, advertising, capital investments, product determination, cost control, dividend policy etc.
Decisions begin with planning, organizing, directing and controlling, what an organization's target is and what it wants to achieve in the near future, In which manner resources they will use and who will govern these activities etc. These decisions have to be taken by the organization's manager, although, right decisions provide the right direction and it is beneficial to both individual and or Organization.
On the other hand, wrong decisions provide wrong direction which ultimately become hindrance in achieving organizational goals.
Overall, making decisions to reach the final stage after analyzing and by selecting the best and suitable alternative is the occupation of a person who possesses leadership skill and experienced manager and then makes decisions to move organizations activities towards attainment of goal and also able to reduce future shortcomings by making operational or tactical decisions.
Definitions of Decision Making
Following are the definitions of decision making:
In the words of George Terry: “If there is one universal mark of a manager, it is decision-making.”
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 the behavior chosen from a number of alternatives.”
Importance of Decision Making
Decision making is vital aspect plays important role in smooth running of organizations performance, taking right decision at right time which become profitable and fruitful for organization are further discussed in several points:
1) Attainment of Objective
Each and every organization has a particular objective towards which the entire and whole process is turned in attainment of that objective or goal in a certain timeframe.
2) Optimum Utilization of Resources
Resources of organization must be utilized in optimum and efficient manner that moves in achievement of organization particular objectives. Available resources such as men, money, material, machine, method, market and information, these combined resources affect an organization in achieving objectives. It ensures that experienced managers have to direct and govern organizations performance in context of efficient use of resources and get desired results.
3) Business Continuation
In the present scenario, in a highly competitive environment to beat its competitors it is essential to take the right decision to lead organization performance and ensure successful planning on various courses of action in respect of production, advertising, marketing, business expansion programmes promotion of sales is to be well decided for smooth continuation of business organization.
4) Making Plans and Policies
To govern as well as conduct organization in a smooth and efficient way and ensure a desire to achieve particular objective this required obviously Managers full attention in making plans and policies, a certain framework which regulates organizational
performance in a systematic way.
5) Managerial Efficiency
Occupation of the management team is to make a conversation on each and every step and topics to make a strong decision on various topics concerned with organizational efficiency. They have to consider organizational performance and efficiency to ensure right and gainful decisions which lead organizations rather than wrong decisions which become hurdles and prevent organizations goals.
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December 01, 2021
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