Decision Making

Planning and decision making are closely interlinked. Decision making is an important part of planning. Decision making as a procedure and purpose of management is extremely essential as various vital features of an organization depend upon the correct decision at the right time.

Decision making is a process of making a choice out of best alternatives. It is an intellectual process involving the following steps:
•    Identify the problem,
•    Collect information from all possible sources,
•    Develop alternatives,
•    Compare and evaluate these alternatives,
•    Decision making stage of making a choice among alternatives,
•    Implementation and communication of decisions,
•    Follow up and review.

Factors affecting Decision Making Process

Information: It should be accessible, valid, sufficient, consistent, should be obtainable at the right time. It should be examined and presented in the correct way.

External environment aspects: Since decision making is for all time interactive with the surroundings, different environmental aspects influence decision making for example economic, social, political, cultural, technical, ethical, legal, and global factors.

Internal Aspects: Regulations, rules, administrative restrictions or procedures inside the organization also influence decision making.

Time Aspect: Decision has got to be taken at the right time. A number of products are launched ahead of time. Decisions are as well time bound. In business, context, introduction of refrigerators, coolers, air-conditioners, in summer plus woolen clothing in winter too suggests the power of time in decision making.

Individuality of the Decision Maker: The process of decision making has to do a lot with who is the decision maker, his perceptions, attitudes, values, method of functioning, the nature of personality and in general way of thinking.

Participation, Acceptance and Execution: Fundamentals of how decisions are taken, how far-off they are acknowledged, as well as how they are to be put into practice also add in the decision making process.

Precedent: In a bureaucratic system this turns out to be a decisive factor as questions like “Have we done this before?”, “Is there an example of taking such decisions?” are frequently asked prior to taking a decision.

Experience of a Decision Maker: Since it is believed that experience is the greatest teacher, maturity in industry experience of a manager serves in taking efficient judgment.

Power to Decide: Several times, people make out what is mistaken in the business, but often they do not have the control to make a decision and take action. That is how the theory of empowerment is developed which talks with reference to decision making to the lowest potential level.

Escalation of Commitment (Point of No-return): After a decision has been made, it is time and again considered that the decision is going on a wrong way, however partly of the work is completed. As a result, there comes a position of no return and the decision has to be fulfilled regardless of negative feedback.