MANAGEMENT DECISION MAKING IN ORGANIZATION

The function of management in that of decision making on matter the angle it is viewed. i.e. the function of planning, organizing, directing, controlling all involves decision making at every level because manager are constantly evaluating, selecting during their cause of action. The following basic management principle provides the basic framework for decision making.

a. The principle of efficiency of planned approach.

The decision maker should employ the steps of the planned approach. The step of the planned approach which are in extension of scientific methods, creativity, intuition, judgment and experience on the part of the decision maker are as follows; observation, destination of the problem, development of alternative problem selecting optimum solution using experimentation, establishment of proper control and verification of optimum solution through implementation.

b. Principle of multiple hypothesis of reaching a final decision

A decision maker must consider multiple hypothesis of tentative solution to consider is less than optimum decision.

c. The principle of flexibility:

Each alternative solution must be tested for flexibility. The manager should make the decision flexible enough to meet anticipated and unanticipated change in environment factors. Implementing a decision that is too rigid can result in less than optimum performance.

EFFECT OF DECISION IN ORGANIZATION PERFORMANCE

Decision making is a critical part of good business. The question then is how is a good decision made? One part of the answer is good information and experience in interpreting information, consultation i.e. seeking the views and expertise of other people also helps. Constraints on decision- making

A. Internal constraints
These are constrains that come with the business itself,
i. Availability of finance: certain decision will be rejected because they cost too mush

ii. Existing business policy: it is not always practical to rewrite business policy to accommodate one decision

iii. People’s abilities and feeling: A decision cannot be taken if it assumes higher skills than employees actually have, or if the decision so unpopular no-one will work properly on it

B. External constrains
These come from the business environment outside the business.
i. National and EU legislation

ii. Competition behavior and their likely response to the decision your business make

iii. Lack of technology

iv. Economic climate

v. Quality of decision making