Decision- making is the process of choosing the best from among the alternative solutions under a given set of circumstances. Now we shall discuss the meaning of decision – making based on this analysis. Decision making is the process of choosing the best among the available alternatives with a purpose under a given set of circumstances. DECESSION MAKING PROCESS: 1. The analyses of these definitions present the following facts. 2. Identify the purpose or goal, based on which decision has to be made. 3. Analyze the set of circumstances, conditions or ground realities which set the norms for decisionmaking.
4. Decision – making is a process of identifying the issues, collecting information and data, analyze the, and generate or develop necessary inputs for developing alternative solutions.
5. Develop alternative solutions to solve the problem or ways to deal with the situation. 6. Evaluate the alternative solutions and choose the best solution. 7. Implement the selected solution. Importance of Decision- Making Managers perform all their functions and activities through decision- making. In addition, making the decision in right time values much to the organization rather than making a right decision in the wrong time.
Managers in the business world, often fail to make a decision in the right time and allow the competitors to grab the opportunities.
As such, managers have to make not only the right decisions but make them in right time.
Otherwise, the problems remain or magnify and culminate into a crisis. Decision- making process helps the management to procure necessary data and information. We all recognize that some decisions are more important than others, whether in their immediate impact or long term significance. As a means of understanding the significance of a decision so that we can know how much time and resources to spend on it, three levels of decision have been identified: 1. Strategic. Strategic decisions are the highest level. Here a decision concerns general direction, long term goals, philosophies and values. These decisions are the least structured and most imaginative; they are the most risky and of the most uncertain outcome, partly because they reach so far into the future and partly because they are of such importance. For example: Decisions about what to do with your life, what to learn, or what methods to use to gain knowledge (travel, work, and school) would be strategic. Whether to produce a low priced product and gain market share or produce a high priced product for a niche market would be a strategic decision. 2. Tactical. Tactical decisions support strategic decisions. They tend to be medium range, medium significance, with moderate consequences. For example: If your strategic decision were to become a forest ranger, a tactical decision would include where to go to school and what books to read. Or if your company decided to produce a low priced product, a tactical decision might be to build a new factory to produce them at a low manufacturing cost.
3. Operational. These are every day decisions, used to support tactical decisions. They are often made with little thought and are structured. Their impact is immediate, short term, short range, and usually low cost. The consequences of a bad operational decision will be minimal, although a series of bad or sloppy operational decisions can cause harm. Operational decisions can be preprogrammed, pre-made, or set out clearly in policy manuals. Defining Planning Before a manager can tackle any of the other functions, he or she must first devise a plan. A plan is a blueprint for goal achievement that specifies the necessary resource allocations, schedules, tasks, and other actions. A goal is a desired future state that the organization attempts to realize. Goals are important because an organization exists for a purpose, and goals define and state that purpose. Goals specify future ends; plans specify today's means. The word planning incorporates both ideas: It means determining the organization's goals and defining the means for achieving them. Planning allows managers the opportunity to adjust to the environment instead of merely reacting to it. Planning increases the possibility of survival in business by actively anticipating and managing the risks that may occur in the future. In short, planning is preparing for tomorrow, today. It's the activity that allows managers to determine what they want and how they will achieve it. Not only does planning provide direction and a unity of purpose for organizations, it also answers six basic questions in regard to any activity: a. What needs to be accomplished? b. When is the deadline? c. Where will this be done? d. Who will be responsible for it? e. How will it get done? f. How much time, energy, and resources are required to accomplish this goal?
Nature of Planning