OF DECISION MAKING10.1 DECISION-MAKING CONCEPT:
A decision is choice out of several alternatives (options) made by the decision maker to achieve some objective s in a given situation. Business decisions are those, which are made in the process of conducting business to achieve its
objective in a given environment. Managerial decision-making is a control point for every managerial activity may be planning, organizing, staffing, directing, controlling and communicating. Decision-making is the art of reasoned and judicious choice out of many alternatives. Once decision is taken, it implies
commitment of resources.
The business managers have to take variety of decision. Some are routine and others are long-term implementation decision. Thus managerial decisions are grouped as:
(a) Strategic decision
(b) Tactical decision
(c) Operation decision
1. Strategic Decision: these are known as major decision influence whole or major part of the organization. Such decisions contribute directly to the achievement of common goals of the organization; have long range effect upon the
Generally, strategic decision is unstructured and thus, a manager has to apply his business judgment, evaluation and intuition into the definition of the problem. These decisions are based on partial knowledge of the environmental factors which are uncertain and dynamic, therefore such decision are taken at the higher level of management.
2. Tactical Decision: tactical decision relate to the implementation of strategic decisions, directed towards developing divisional plans, structuring workflows, establishing distribution channels, acquisition of resources such as men, materials
and money. These decisions are taken at the middle level of management.
3. Operational Decision: operational decisions relate to day-to-day operations of the enterprise having a short-term horizon and are always repeated. These decisions are based on facts regarding the events and do not require much of business judgments. Operational decisions are taken at lower level of management.
The business decision-making is sequential in nature. In business, the decisions are not isolated events. Each of them has a relation to some other decision or situation.
The decision may appear as a ‘snap’ decision but it is made only after long chain of developments and a series of related earlier decisions.