Decision making is an essential aspect of modern management. It is a primary function of management. A manager's major job is sound/rational decision-making. He takes hundreds of decisions consciously and subconsciously. Decision-making is the key part of manager's activities. Decisions are important as they determine both managerial and organizational actions. A decision may be defined as "a course of action which is consciously chosen from among a set of alternatives to achieve a desired result." It represents a well-balanced judgment and a commitment to action. It is rightly said that the first important function of management is to take decisions on problems and situations. Decision-making pervades all managerial actions. It is a continuous process. Decision-making is an indispensable component of the management process itself. DEFINITION
Decision making is a process of selecting the best option/logical choice from the variety of alternative options by considering positive and negative factors’. In the case of business decision making it should be done achieve the goals and objectives by maximizing efficiency and the effectiveness. TYPES OF DECISIONS
The following are the most common types of decision making styles that a manager in a business or even a common man might have to follow.
These decisions are permanent. Once taken, they can't be undone. The effects of these decisions can be felt for a long time to come. Such decisions are taken when there is no other option. 2. Reversible
Reversible decisions are not final and binding. In fact, they can be changed entirely at any point of time. It allows one to acknowledge mistakes and fresh decisions can be taken depending upon the new circumstances. 3. Delayed
Such decisions are put on hold until the decision maker thinks that the right time has come. The wait might make one miss the right opportunity that can cause some loss, especially in the case of businesses. However, such decisions give one enough time to collect all information required and to organize all the factors in the correct way. 4. Quick Decisions
These decisions enable one to make maximum of the opportunity available at hand. However, only a good decision maker can take decisions that are instantaneous as well as correct. In order to be able to take the right decision within a short span of time, one should also take the long-term results into consideration. 5. Experimental
One of the different types of decision making is the experimental type in which the final decision cannot be taken until the preliminary results appear and are positive. This approach is used when one is sure of the final destination but is not convinced of the course to be taken. 6. Trial and Error
This approach involves trying out a certain course of action. If the result is positive it is followed further, if not, then a fresh course is adopted. Such a trial and error method is continued until the decision maker finally arrives at a course of action that convinces him of success. This allows a manager to change and adjust his plans until the final commitment is made. 7. Conditional
Conditional decisions allow an individual to keep all his options open. He sticks to one decision so long as the circumstances remain the same. Once the competitor makes a new move, conditional decisions allow a person to take up a different course of action. CONSTRAINTS ON DECISION-MAKING
There are two types of constrains as follows.
1. Internal Constraints
These are constraints that come from within the business itself. * Availability of finance: Certain decisions will be rejected because they cost too much
* Existing Business Policy: It is not always practical to re-write business policy to accommodate one decision
* People’s abilities and feelings: A decision cannot be taken if it assumes higher skills than employees actually have, or if the...