The organisational structure, having an important bearing on decision-making, should be readily understood. Every event in such problems requires individual attention and analysis and its decision is to be arrived at according to its special features and circumstances. But in non-programmed problems, there is no continuing effect because they are non-repetitive, non-routine, and novel. Decision arrived in such programmed problems has, thus, a continuing effect. Programmed problems, being of routine nature, repetitive and well-founded, are easily definable and, as such, require simple and easy solution. Subject-matter of Decision-making:ĭecisional matters or problems may be divided into groups consisting of programmed and non-programmed problems. These principles are stated as follows: 1. If certain principles are followed for decision-making, such multidimensional reactions can mostly be overcome. Even the best and correct decision may become ineffective if these aspects are ignored because in decision-making there are so many inside and outside chains of unavoidable reactions. Principles of Decision Making :Įffective decision involves two important aspects-the purpose for which it is intended, and the environmental situation in which it is taken. In all managerial functions, decision-making is an indispensable accompaniment. When a manager plans or organises, orders or advises, approves or disapproves anything, he will have to move with the process of decision-making. So, decision-making is deeply related with management functions and both are bound up together inseparably. Such a situation calls for actions that involve decision-making. Changes in conditions are the usual rule. The old order is always yielding place to new either in personnel or in unforeseen contingencies. In any business, whether large or small, the conditions are never static, they are perceptively dynamic. “Whatever a manager does, he does through making decisions.” In the words of George Terry: “If there is one universal mark of a manager, it is decision-making.”
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If he participates in decision-making, he is regarded as belonging to management staff. Similarly, the managers of non-profit seeking concerns and public enterprises also face the challenge of taking vital decisions on many important matters.ĭecision-making is also a criterion to determine whether a person is in management or not. 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. The ability to make good decisions is the key to successful managerial performance.
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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. In co-ordination, decision-making is essential for providing unity of action.
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Correct decisions reduce complexities, uncertainties and diversities of the organisational environments. Decisions are needed both for tackling the problems as well as for taking maximum advantages of the opportunities available. The entire managerial process is based on decisions. Objectives, goals, strategies, policies and organisational designs are all to be decided upon in order to regulate the performance of the business.
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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. Decision-making is the essence of management.Īccording to P. A decision is an act of selection or choice of one action from several alternatives.ĭecision-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.