Imoprtance And Scope Of Decision Making

Management Of Family Resources

Lesson 22 : Decision Making

Importance And Scope Of Decision Making

Decision Making is the heart of management process. It deals with the choice of one course of action from among the alternatives. Some decisions are made routinely and some are made for the life time. Decisions are motivated by values and goals, and are checked against standards.

Meaning of Decision making:

A decision is a choice between two or more alternatives. This implies three things:

1. When managers make decisions they are choosing-they are deciding what to do on the basis of some conscious and deliberate logic or judgment.
2. Managers have alternatives available when they are making a decision. It does not require a wise manager to reach a decision when there are no other possible choices. It does require wisdom and experience to evaluate several alternatives and select the best one.
3. Managers have a purpose in mind when they make a decision. There would be no reason for carefully making a choice among alternatives, unless the decision brings them closer to some goal.

Every decision has an element of risk. By examining alternatives in a thoughtful, logical, and reasonable manner you are reducing the risk factor. The purpose is to reduce risk to a point where it can be recognized and assessed.

There are certain times in our life when the decisions we make have a direct bearing upon both the present and the future. These decisions may be so important that once made, they become difficult if not impossible to reverse. They often center around our lifetime goals such as your major in college, anticipated employment, when or if you decide to become a parent.

Decision-making plays a definite role in our life. We use decision ­making to achieve our goals, to assess our standards, and as an aid in attain­ing our desired quality of life. The decisions we make reflect our value hierarchy. It is conceivable that two individuals faced with making the same decision will approach the decision from different aspects, identify different alternatives and then select totally different alternatives as their final choice. The underlying reason for this is the difference in individual values, goals, and ­standards.

Thus decision-making serves many different purposes in our management. We use decision-making to set the goals and their priorities; to determine which resources should be used, or whether one resource will be used instead of another. The courses of action we take result from your decisions. The habits and routines we follow on a regular basis have come about from earlier decisions you made.