Topics: Decision making, Risk Pages: 4 (1183 words) Published: November 14, 2013
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 2. Definitions of Decision-making

1. The Oxford Dictionary defines the term decision-making as "the action of carrying out or carrying into effect". 2. According to Trewatha & Newport, "Decision-making involves the selection of a course of action from among two or more possible alternatives in order to arrive at a solution for a given problem". 5. Steps Involved In Decision Making Process

Decision-making involves a number of steps which need to be taken in a logical manner. This is treated as a rational or scientific 'decision-making process' which is lengthy and time consuming. Such lengthy process needs to be followed in order to take rational/scientific/result oriented decisions. Decision-making process prescribes some rules and guidelines as to how a decision should be taken / made. This involves many steps logically arranged. It was Peter Drucker who first strongly advocated the scientific method of decision-making in his world famous book 'The Practice of Management' published in 1955. Drucker recommended the scientific method of decision-making which, according to him, involves the following six steps: 1. Defining / Identifying the managerial problem,

2. Analyzing the problem,
3. Developing alternative solutions,
4. Selecting the best solution out of the available alternatives, 5. Converting the decision into action, and
6. Ensuring feedback for follow-up.
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