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/courses of action. Decision-making involves a series of steps taken by an individual/group to to determine (decide) the best options or course of action to meet their needs. A decision is a conclusion/determination arrived at after consideration of relevant factors. A decision 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:
All these variety of circumstances situations may require different kind of deliberations, but they have one property in common; that people have to make up their minds. The use of the same word "decision" for these different kinds of deliberations, in a variety of very dissimilar situations, can be a source of confusion for decision makers, and make them aware of the importance of the need to apply the appropriate methods and knowledge in the right situation for the decision taken to be successful.
A Model of Decision-Making and Decision
Decisions vary along two (2) dimensions; control and performance.
Decisions can be characterized based on control and performance factors, such as:
Decisions can be organized into categories based on: the level of control - Control/No Control, and performance - absolute/relative to produce the following categories of decision types:
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.
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