Decision Making

Decision making plays an important role in all phases of management, viz., planning, organizing, directing, controlling, staffing, etc. Managers often find themselves facing alternative courses of action, out of which they are expected to choose or decide upon a single course of action. The decisions they make are influenced by various factors like past experience, the external environment, human relationships within the organization and the cognition levels of the decision makers themselves. These decisions made by the managers are expected to lead the organization towards the achievement of its objectives. The decision making process is a key determinant of the success of both the management and the organization.

The process of decision making helps an individual to narrow down the choices available to him in order to arrive at the most suitable option.

The decision making process, according to Herbert A. Simon, can be viewed as a process consisting of three phases. The three phases are:

• Intelligence activity – This phase of the decision making process examines conditions in the environment that necessitate the management to take a decision. This phase can also be considered as the identification phase, where a problem or opportunity facing the organization is recognized and a diagnosis is made. For example, the management faces a decision making situation