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  • Essay / Decision Making in Business - 1661

    Decision MakingDecision making is defined as the selection of a course of action among alternatives; this is at the heart of planning. A plan cannot be said to exist without a decision – a commitment of resources, direction or reputation – having been made. Until then, there are only planning studies and analyses. Managers sometimes view decision-making as their central task, because they must constantly choose what should be done, who should do it, and when, where, and sometimes even how it will be done. Decision-making, however, is only one step in planning. Even when it is done quickly and without thinking, or when it only influences action for a few minutes, it is part of planning. It is also part of everyone's daily life. A course of action can rarely be judged on its own, because virtually every decision must be adapted to other plans. The Importance and Limitations of Rational Decision Making In the discussion of the stages of planning In Chapter 4, decision making was considered a major part of planning. In fact, given the awareness of opportunity and purpose, the decision-making process is truly at the heart of planning. Thus, in this context, the process leading to decision making could be considered as (1) the formulation of premises, (2) the identification of alternatives, (3) the evaluation of alternatives according to the desired goal and (4) choosing an alternative, that is, making a decision. Although this chapter emphasizes the logic and techniques of choosing a course of action, the discussion will show that decision making is actually one of the stages of planning. Rationality in Decision Making It is often said that effective decision making must be rational. But what is rationality? When does a person think or decide rationally? People who act or decide rationally are trying to achieve a goal that cannot be achieved without action. They must have a clear understanding of alternative solutions by which a goal can be achieved within existing circumstances and limitations. They must also have the information and ability to analyze and evaluate alternatives in light of the desired objective. Finally, they must have the desire to arrive at the best solution by selecting (1w) the alternative that most effectively satisfies the achievement of the objectives. People rarely achieve complete rationality, especially in management. » Firstly, since no one can make decisions affecting the past. , decisions must work for the future, and the future almost invariably involves uncertainty. Second, it is difficult to recognize all the alternatives that could be followed to achieve a goal; this is especially true when decision-making involves doing something that has not been done; been done before.