Decision-making has great importance for success of organization in contemporary management system. Managers have to take critical decisions at every stage. Decision-making pervades through all managerial functions such as planning, organizing, staffing, directing and control. In planning for example manager decides what to produce, where and when and in organizing manager decides about distribution of work, delegating authority and fixing responsibility. Decision making is commitment to something and a principle or course of action. It is selecting the best among alternative courses of action. The decision-making consists of various factors. Decision-making means that there are various alternatives and the most suitable alternative is chosen to solve the problem. Another factor is existence of alternatives in which the decision-maker has liberty to choose an alternative of his fondness. Decision-making is goal oriented. It implies that the decision maker attempts to accomplish some results through taking vital decisions. In theoretical studies, it is established that decision making is an essential part of management. Decision-making is a process of deciding. Collins (1999) defines decision as the act of making up one’s mind by collecting, sharing and gathering significant ideas from different sources. Furthermore, Longman (2000) describes that “decision as a choice or judgment that you make after a period of discussion or thought”. Longman’s definition is very clear but it gives rise to a question on the definition of deciding or decision-making. Fullan avows that decision-making is the process of identifying and choosing alternative courses of action in a manner appropriate to the demand of the situation (1982). According to Baker et al. (2001), decision making should start with the identification of the decision maker(s) and stakeholder(s) in the decision, reducing the possible disagreement about problem definition, requirements, goals and criteria. Fremount, et, al, defined decision-making as the “conscious and human process, involving both individual and social phenomenon based upon factual and value premises, which concludes with a choice of one behavioural activity from among one or more alternatives with the intention of moving toward some desired state of affairs (1970). A decision maker, as an individual, or as a member of formal organization with his own viewpoint and perception of the organization, selects for optimising values within the constraints imposed by the organization (Varshney, 1997)
Types of Decisions:
Decision Making Process:
A decision is reasonable if it is suitable for organization that means choose best alternative to accomplish goals. There are various steps in rational decision making:
- Recognizing the problem.
- Deciding priorities among the problems.
- Diagnosing the problem.
- Developing alternative solutions or courses of activities.
- Evaluating alternatives.
- Converting the decision into effective action and follow up of action.