Attaining Sustainable Organizational Growth and Profitability
Improving Decision-Making and Decisions in Business Organizations
Decision-making is the deliberative process of making choices by identifying a decision, gathering information, and assessing alternative solutions. A decision is a conclusion/determination arrived at after consideration. It is the action of deciding something or resolving a question. The term decision is used, in a variety of different circumstances, when people have to make up their minds. The situations in which people have to make decisions (make up their minds about what to do) may range over a variety of situations, including:
The same term - decision - is applied to all kinds of deliberations. All these decisions have one property in common, the fact that people have to make up their minds in a great variety of circumstances. The use of the same word "decision" for different kinds of deliberations in a variety of very dissimilar situations is a source of confusion, and makes it very difficult for people to apply the appropriate methods and knowledge in the right situation - situation of interest.
A Model of Decision-Making and Decision Types
Decision-making is the deliberative process of making choices by identifying a decision, gathering information, and assessing alternative solutions. Decision-making involves a series of steps taken by an individual/group to to determine the best options or course of action to meet their needs. Decision-making is influenced by a number of factors including:
These factors can be organized into a two (2) dimension model that defines four categories elements that influence decision-making. This model provides a consistent structure to help decision makers improve their decision-making, by classifying decision-making into categories based on the two (2) factors that influence decision-making. The resulting categories include:
The structure/model useful in categorizing decisions into a decision type system that can lead to finding useful approaches to improve decision-making. This type system helps decision makers distinguish between the different types of decisions - routine as well as complex deliberations, to both small-stakes bets and high-stakes commitments, and to exploratory steps as well as irreversible moves. Decision-makers can improve the quality of their decisions substantially, if before making any decisions they make an assessment of the type of decision(s) required for the situation at hand.
Decision-Making In Business Organizations
In any business enterprise decisions can be made at varying levels in the organization. Managers at all levels in the organization must make decisions on behalf of a company. Managers face in the course of their daily responsibilities, a range of decisions that are consistent with their positions and roles in the organization. For example, the management decisions based on positions, roles and responsibilities may be defined as follows:
In a business context, decision-making is a set of steps taken by managers in an organization to determine the planned path for business initiatives and to set specific actions in motion. The difference between decisions at the various levels, typically, lies in the type and scope of the decision or choices made.
Decision Rights & Authority
The management decision levels and associated positions, roles and responsibilities may have designated decision rights and decision authority associated to each position. Decision rights are a component of organization design, that help identify and establish "what" business decisions need to be made, both to drive the business and to drive alignment to strategy. And "who" is involved in making them and "how" the decisions will be made through operating processes. Identifying and defining decision rights helps companies to organize their decision making and execution processes by setting clear roles and accountability, and by giving those involved a sense of ownership of decisions.
Decision authority is the, power or obligation to make a decision and accountability - the duty to answer for the success or failure of a decision. There are six (6) common types of Decision Authority, including:
An organization’s ability to execute well rests on its ability to make and implement the decisions that matter most.
All management decisions can be related directly or indirectly to broader management functions: planning, organizing and staffing, leading, and controlling; with different management levels spending more time on certain functions than on others. From the point of view of management, managerial decisions can be broadly classified into these categories, namely, strategic, tactical, operational and administrative decisions.
Decision making is the means by which management's intentions are reaized.
I am a computer scientist by education and training. My interests are in modeling complex business and social systems to foster better strategic and operations management processes in delivering value to customers while meeting the expectations of stakeholders.