Decision-making is the systematic process of selecting choices from among a wide range of alternatives.

It means purposely choosing a course of action to follow from the many alternatives that may be available to a person or organization. 

Decision-making can also be defined as the process of making choices by identifying a process, gathering information, and assessing alternative resolutions.

It involves identifying problems and opportunities and then selecting a course of action to deal with the problems or seize the opportunities.

Since it is involved in every function of management, from planning to controlling, decision-making is an essential aspect of the management.

Characteristics of Decision-making

1. Goal-oriented: Decision-making is a goal-oriented process in the sense that it is directed toward the achievement of organizational goals or addressing a particular problem in the organization.

A decision is rated good or bad to the extent to which it helps the organization achieve its goals.

A good decision supports and aligns with an organization's goals, whereas a bad decision hinders the attainment of organizational goals.

2. Selection process: Decision-making is also seen as a selection process since it entails selecting one course of action from a large number of alternatives that may be available to an organization. 

In decision-making, the selected course of action should be the one that helps the organization achieve its goals.

3. Rational and intellectual process: Decision-making is an intellectual and rational process because it relies on good judgment and logical thinking rather than just feelings or intuition.

It involves imagination, good reasoning, sound evaluation, and sound judgment.

Decision-making is not just a fun activity. It is a serious process that demands careful and logical thinking. 

Decision-making represents the use of facts and data to analyze the situation and evaluate potential alternatives before making a decision

4. Situational: Another key characteristic of decision-making is that it is always situational.

By situational, we mean decision-making is heavily influenced by the specific context in which it takes place.

A decision that is appropriate for one situation may not be suitable for another situation.

The situational characteristics of decision-making also imply that decision-making is related to the place, situation, and time in which it is made.

For example, a decision made by a manager in the corporate office of a multinational corporation will likely differ from the decision of the same manager at a remote manufacturing facility.

Because decision-making is situational, managers usually consider the specific characteristics of the situation (such as the goals of the organization, current market conditions, and the resources of the organization) they are facing when deciding on making a decision.

5. Systematic process: Decision-making is a systematic process in the sense that it involves multiple processes or steps.

A typical decision-making process usually involves the following steps:

  • Problem identification
  • Gathering of relevant information
  • Identifying the alternatives
  • Evaluation of alternatives
  • Implementation of the selection course of action.

6. Involves commitment: Decision-making requires certain commitment on the part of the decision maker.

Once a decision is made, the decision maker is expected to commit financial resources, physical resources, and human resources to the implementation of the decision.

For example, if a decision is made to launch a new product, the decision maker, in this case, the organisation will have to devote financial and human resources in the designing, developing and marketing of the new product.

Importance of Decision Making

1. Problem-solving: Decision-makingng is essential for solving problems and addressing challenges faced by an organization.

Problems and challenges are an inevitable part of any organization, and effective decision-making is crucial for addressing them.

Through the decision-making process, managers can identify problems and select the best course of action to deal with the problems.

In fact, quik and affective decisions are essential to resolving any problem inside an organization since the sooner a decision is made, the sooner a problem is addressed, and the less likely it is to affect the operations of the organization.

2. Essential for creating plans and policies: Decision-making is also important for developing and implementing of plans and policies in the organization.

For any plan or policy to be made, certain decisions must be made. 

For example, to create a policy in an organization, decisions will need to be made about the scope , and objectives of the policy.

As another example, to create a plan, an organization will have to select a course of action to follow to achieve its goals from the various alternatives that may be available to the organization.

Indeed, decision-making is an essential process in planning because it is through decision that an organization is able to evaluate and select the best course of action that achieve the organization's goals.

3. Efficiency: Another important of decision-making is the efficinecy it can bring if done effectively.

The efficiency of an organization can be enhanced if better decisions are made.

Managers can make better use of resources and, reduce waste and inefficiencies by making careful and well-thought decisions.

4. Attainment of goals: Effective decision-making can assist people and organizations in achieving their objectives.

Rational and effective decision-making is essential for achieving success in an organization or as an individual.

Decision-making allows individuals and organization to make decisions that will best serve their interests and advance their goals.

5. Strategy development: Another important of decision-making is that it is essential for strategy development.

Decision-making allows the organization develops and implements a strategy that aligns with the overall objectives of the organization.

Through decision-making, managers can identify opportunities and threats and develop strategies to achieve to take advantage of the opportunities and deal with the threats.


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