IMPORTANCE OF DECISION-MAKING

Decision-making is an indispensable component of the management process. Itpermeates all management and covers every part of an enterprise. In fact whatever amanager does, he does through decision-making only; the end products of manager’swork are decisions and actions. For example, a manager has to decide

(i)                 what are thelong term objectives of the organization, how to achieve these objectives, whatstrategies, policies, procedures to be adopted (planning);

(ii)               how the jobs should bestructured, what type of structure, how to match jobs with individuals (organizing);

(iii)             how to motivate people to peak performance, which leadership style should be used,how to integrate effort and resolve conflicts (leading);

(iv)             what activities should becontrolled, how to control them, (controlling).

Thus, decision-making is a central,important part of the process of managing. The ·importance of decision-making inmanagement is such that H.A. Simon called management as decision making. It is smallwonder that Simon viewed decision-making as if it were synonymous with the term’managing’. Managers are essentially decision makers only. Almost everything managersdo involves decision-making. Decision-making is the substance of a manager’s job. Infact, decision-making is a universal requirement for all human beings. Each of us makesdecisions every day in pur lives. What college to attend, which job to choose, whom tomarry, where to invest and so on. Surgeons, for example, make life-and-death decisions,engineers make decisions on constructing projects, gamblers are concerned with takingrisky decisions, and computer technologists may be concerned with highly complexdecisions involving crores of rupees. Thus whether right or wrong, individuals asmembers in different organizations take decisions. Collectively the decisions of thesemembers give ‘form and direction to the work an organization does’. Some writersequate decision-making with planning. In fact, Koontz and O’Donnell viewed ‘decisionmakingas the core of planning’, implying that is not at the core of organizing orcontrolling. However, instead of taking extreme positions it would be better to viewdecision-making as a pervasive function of managers aimed at achieving goals.According to Glueck there are two important reasons for learning about decision-making:

(i)                 Managers spend a great deal of time making decisions. In order to improve managerial skills it is necessary to know how to make effective decisions.
(ii)               Managers are evaluated on the basis of the number and importance of the decisions made. To beeffective, managers should learn the art of making better decisions.