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Significance of Decision-Making

No business can survive without effective decision-making. Decision-making is an essential part of every function of management. In the words of Peter F. Drucker, “Whatever a manager does, he does through decision-making.” Decision-making lies deeply embedded in the process of management. Decision-making spreads over all the managerial functions and covers all the areas of the enterprise. Management and decision-making are bound up and go side by side. Whether knowingly or unknowingly, every manager makes decisions constantly.

Hebert A. Simon described decision-making as synonymous with managing. Joseph A. Literer felt that decision-making is the core of managerial activity. Decision-making involves thinking and deciding before doing and so is inherent in every managerial function. Each manager has to take a number of decisions while performing his functions of planning, organizing, staffing, directing and controlling. This is why, decision-making is often called the essence of managing.

Decision-making and planning are deeply interlinked. The determination of objectives, policies, programmers, strategies, etc. involves decision-making. The managers also take decisions on the organizational design, staffing, directing and leading the employees in work situations and on regulating performance intone with pre-determined standards. In other words, all managerial functions are preceded by certain managerial decisions.

The most outstanding quality of a successful entrepreneur is his ability to make sound decisions. A manager has to make up his mind quickly on certain matters. It is not correct to say that he has to make spur of the moment decisions all the time. While taking many decisions, he gets enough time for careful fact finding, analysis of alternatives and choice of the best alternative. Decision-making is a human process. When a manager decides, he chooses a course which he thinks is the best.

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