Posted by Chester Morton / Tuesday 28 November 2017 / No comments
The definition and importance of decision making
THE IMPORTANCE OF DECISION MAKING
Definition of decision-making
Decision making represents a process of choosing the best
alternative from among many possible options available to the manager of a business unit. A manager at any given moment of making a decision concerning
the business would first of all assess all the different alternative decisions
which the business can take. Each of these alternative decisions will be looked
at in terms of their advantages and disadvantages which are known to the
managers of the business. From this evaluation, a final decision may be arrived
at. Weighing the merits and demerits of each choice or option helps the
managers of the company to make the best decisions.
One must bear in mind that decision making is an important
function of management. Without this managerial function of decision making,
other functions of management such as planning, directing, organizing and
staffing cannot be performed because each of these functions involve making
decisions. In the words of Stephen Robins, “decision making is the selection of
a preferred course of action from two or more alternatives.”
IMPORTANCE OF DECISION MAKING
Decision making
Helps in the Implementation
of managerial function
As explained in the meaning of decision making, it would be
impossible for management to perform the various managerial functions without
taking one decision or the other. Decision making is therefore very
important in arriving at how many people and what kinds of them to employ, what steps the business should take to achieve its corporate
objectives, who should be responsible for which activities and who should
report to who during the business’ operation. The functions stated above sum up the managerial functions of planning, organizing, directing, controlling,
and staffing; all of which cannot be implemented without decision making.
Decision making helps
the firm to function properly
Aside from being made at all managerial level activities and
in all the functioning of the business organization, every other employee of
the firm must take a decision or another in their daily work within the
organization. It would be safe to conclude that no business can function
without decisions being made in its operation.
Decision
making helps in Evaluating the performance of management or managers
Decisions made in the course of managing the firm by managers
can help to know if the managers are competent or not. When their decisions
turn out to be correct, it is often an indication that the manager is
competent, qualified and efficient at managing the business. On the other hand,
when the managers’ decision proves to be wrong, it is understood that the
manager is not competent. This way the decisions that managers make help other
business stakeholders evaluate their performance.
Decision
making is helpful in planning and making policies
Organization’s policies which are conceived and plans made in
the process of managing the firm are established through the process of
decision making. Without making decisions, these plans and major policies which
could move the business forward cannot be made. Further, it takes decision to
implement policies and change plans in response to changes in the business
environment.
Decision Making is
important in ensuring the Successful operation
of a business
In a competitive business world, every business organization
or department within a firm is expected to make series of decisions. The
success of an organization or firm is dependent on the kinds of decisions they
make. Where the right decisions are made the firm may experience growth and or
survive a business down turn. On the contrary where bad decisions are made the
company is likely to experience great losses which could sometimes lead to the
business folding up.
ALSO READ:
Steps in making a business decision
ALSO READ:
Steps in making a business decision
