Decision Making | Nature and Elements of Decision Making

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Decision MakingDecision Making | Nature and Elements of Decision Making
Principles of Management (POM)
Third Semester | Second year
BSc.CSIT | Tribhuvan University (TU)

Decision Making
A decision is defined as “act of making choices”. It is the process of choosing between alternate courses of action. A choice or decision is made among two or more alternatives or course of action. According to Stoner ,” Decision making is the process of identifying and selecting a course of action to solve a specific problem”. It is the most fundamental function of management. All the functions of the manager involve the decision making. It connects all other functions of the management.

The quality of decision determines the organizational performance. Right decisions open up new opportunities where as poor decisions can be costly for the organization. Effective decision making requires understanding the nature of the problem to be solved. Decision making job has become more challenging and is considered a vital managerial skill.

Nature of Decision Making

  • Decision making is a selective process in which only the best possible alternative out of available alternative is chosen.
  • It’s a human and rational process involving the application and intellectual abilities.
  • It’s a dynamic process. It involves time dimensions.
  • It’s a goal oriented to achieve certain desired goals or objectives.
  • Decision making implies freedom to the decision maker regarding the final choice.
  • It’s a continuous process.

Elements of Decision Making

For effective Decision Making, the following elements are to be considered-

  • Information and decision rules: It is the statement that identifies the situation in which the decision is required and specify how the decision is made.
  • Short term and long term impact: The decision makers has to be aware of short term and long term impact of his/her decision.
  • Decision maker or Decision making body: Another element of decision making is a well identified decision maker or decision making body to whom the authority and responsibility of decision making has been assigned.
  • Communication: Another element of decision making is ensuring that the decision, once made , is known to all concerned parties. It is essential that the communication takes place between those who make decision, those who implement decision and the people affected by the decision.
  • Timely or well timed: To be useful, a decision must be timely or well timed.  It should meet the needs of the moment and should not be unnecessarily delayed.
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