Decision Making Processes

Decision Making Processes

Ashley Farmer        

Campbellsville University

Abstract

Business owners and managers make decisions on a daily basis, addressing everything from day-to-day operational issues to long-range strategic planning.  Decision making is a continuous and indispensable component of managing any organization or business.  These owners and managers could be making individual or organizational decisions.  Within both of these types of decisions, there are different theories and models to describe alternatives to the way managers make decisions.  By breaking down the decision making process, managers can better understand what goes in to making a decision.  In the end, it can only better them as a manager.  

Decision Making Processes

Organizations identify problems and implement alternatives for hundreds of decisions every day.  Managers are often referred to as decision makers and every organization grows or fails as a result of the choices managers make.  Decision making is done amid constantly changing factors, unclear information, and conflicting points of view.  By breaking down and analyzing the way managers make decisions, one can better understand what decision making is actually like in an organizational setting (Daft, 2016).  While managers have different decision-making styles, they need to choose the right people to participate in the decision-making process.  

Types of Decisions

        While leaders are ultimately responsible for making business decisions, problem-solving is a shared responsibility among people at different levels in a company.  Further, there are different types of decision-making responsibilities and these include strategic decisions, tactical decisions and operational decisions.  Strategic decisions establish company policy and these decisions are often complicated because the future is uncertain and accurate information is often limited.  In these cases, managers must rely on their past experiences as well as their instincts (Decision Making, 2015).          

Once a company's goals and policies are established by senior management, tactical decisions aimed at achieving a company's goals and implementing company policy need to be made.  Such decisions are usually made by middle managers and require managers to focus on specific actions that will bring about the company's objectives.  Lastly, decisions regarding the day-to-day functions of a business also need to be made.  These decisions are considered operational decisions and they are subordinate to strategic and tactical decisions.  While these decisions are the responsibility of low-level managers, good decision making is crucial here since such decisions focus on productivity, quality control and employee performance (Decision Making, 2015).