IMPORTANCE OF DECISION-MAKING

Decision making is a mental process of selecting one best alternative for doing a work. Hence, the importance of decision making is everywhere. Recognizing the importance of decision making. H.Simon has called the process of managing as a decision making. In fact, management is always a decision making process. The following points indicate the importance of decision making in an organization.


(1) Indispensable Component

Decision making is an indispensable component of management process. It permeates all management functions and covers every part of the organization. Every manager is engaged in decision making for what is to be done, who will do it, how it is to be done, why it is to be done, and where it is to be done.

(2) Pervasive Function

Decision making is the pervasive function of managers aimed at achieving organizational goals. All managerial functions such as planning, organizing, leading, and controlling as well as all functional areas such as production, sales, marketing, and finance involve decision making. The function of decision making is performed by managers at all levels of managerial hierarchy. Thus, management is essentially a decision making process.

(3) Selecting the Best Alternative

A decision making is basically a choice making process. It is necessary in every organizational because there are many alternative courses of action to most situations. The decision maker evaluates various pros and cons of every alternative and selects the most acceptable alternative.

(4) Evaluation of Managerial Performance

Managers spend a great deal of their time in decision making. Making good decisions is not important but also essential to managerial success. The quality of the decisions is the yardstick of managers' effectiveness. Hence, managerial performance is evaluated on the basis of number and importance of good effective decisions.