Decision and its types, Improving Planning

Meaning of Decision

Making decisions involves deciding which options among alternatives are preferable. The core of management lies there. Every management decides to carry out the given tasks and accomplish the intended organizational goals. Additionally, it is the plan of action. It involves identifying issues, coming up with potential solutions, weighing those solutions' potential effects, and selecting the best one. It is created either to solve issues or to accomplish organizational objectives. Making decisions requires consideration and consideration before acting, as it is a managerial function. While carrying out their duties of planning, organizing, staffing, leading, and controlling, managers must make a lot of decisions.

Many situations and issues could arise when making decisions in the organization's many functional areas. The best method should be used to address those issues. As a result, a manager actively participates in setting goals, creating plans, and taking appropriate action. It involves both the process of reasoning and the process of resolving issues with an organization by selecting a particular course of action.

According to George R. Terry-“Decision making is the selection based on some criteria from two or more possible alternatives”.

According to Webster’s Dictionary-“Decision making is the act of determining in one’s mind upon an opinion or course of action”.

According to Koontz and Weihrich-“Decision making is defined as the selection of course of action from among alternatives”.

According to Ricky W. Griffin-“Decision making is the act of choosing one alternative from among a set of alternatives”.

According to Joseph L. Massie-“A decision is a course of action consciously chosen from relevant alternatives for the purpose of achieving desired goals”.

Type’s of Decision

• Programed Decision
  • Programmed decisions are ones that have a repeating pattern. Lower or first line management typically makes programmed decisions. Managers can handle problems quickly and without much research since they have already encountered them. By looking at previous decisions, they can address current issues. In such a choice, types and sources are expressly identified. It is built on a framework made up of policies, laws, and other guidelines. Decisions made by programs are made in a context that is much more controlled.
• Non- Programmed Decision
  • A non-programmed decision is one that is not repeating. Such a choice is made as a result of ambiguous or unstructured issues. The highest level of management in an organization typically accepts it. It is sometimes referred to as the original or imaginative choice. These choices are made in an unpredictable environment. Peter Drucker asserts that non-programmed decisions are truly management in nature and are strategic in nature.

Routine and Basic Decision

• Routine Decision
  • The term "tactical decision" also applies to routine decisions. These decisions have to do with the daily operations of the corporate organization. Following established norms, plans, procedures, and policies on a regular basis is a routine choice. They don't need or demand the gathering of fresh data or intensive analysis and review. There are numerous recurring issues, and these issues block effective performance. Such issues must be resolved by management promptly. A lower echelons of management make these judgments. It will just take a little amount of thought and commitment to make such a decision.
• Basic Decision
  • It is often referred to as a strategic choice. They concern policy issues and necessitate the gathering of data through fact-finding and alternative analysis. Such a choice is taken to ensure the company organization's long-term viability and growth. These types of decision are taken by the top level of management. therefore they are responsible for taking such decision. They are long-term in nature rather than repeating. The replacement of equipment and machinery, the investment of more funds, the expansion of a business, etc. are examples of such decisions.

Organization and Personal Decision

• Organization Decision
  • It is sometimes referred to as an official or formal decision. Before making any decisions, this decision-maker must take into account his official power. A person making this decision should follow all official systems, procedures, and formalities in order to make the right choice. The decision-maker establishes the authority for such decisions and implements them for the benefit of the organization.
• Personal Decision
  • Individual or informal decisions are other names for personal decisions. Personal decisions are made based on the information, training, and abilities of the individual. These choices are based on individual interests and preferences, hence they have little bearing on the organization's regular operations.

Individual and Group Decision

• Individual Decision
  • ​​​​​​​During the decision-making process, one individual is required. Such decision can be both for routine or non-routine problems. It is appropriate for small businesses and those where an autocratic management style predominates. The decision-maker must apply personal judgment, knowledge, skills, and other resources. The organization's owner or manager has the exclusive power to make such a choice.
• Group Decision
  • ​​​​​​​Group decisions are made in settings where there will be a group present, such as a board of directors, an expert committee, a task force, a team, partners, etc. Large organizations like joint stock companies, cooperative organizations, partner firms, etc. are where these decisions are made. Such a group requires more time to decide, but the decision will be simple to carry out. According to the subject, those choices are original and imaginative. These choices are comparable to the non-programmed choice.

Policy and Operational Decision

• Policy Decision
  • The creation of the organization's fundamental plans and policies is addressed by policy decision. These choices are really important. They have an impact on the entire company. These decisions are made at the highest levels of the company and affect how the business performs over the long run. The impact on future performance should be taken into account when making top-level decisions.
• Operational Decision
  • Lower levels of management make operational decisions in order to translate policy decisions into actions. They are worried about how the organization is run on a daily basis. They are therefore of a transient nature. Operational choices are made in relation to organizational internal challenges like inventory levels, production plans, sales and distribution schedules, etc.

Improving Planning

These methods can be used to get around planning difficulties

• Setting Clear Goals
  • Plans are created in order to obtain or attain the organizational goals. To achieve specified goals, effective planning is necessary. Objectives ought to make sense or be logical. Goals should be setup initially and then departmental and unit goals should be compatible with the overall goals.
• Develop Realistic Plans
  • ​​​​​​​Depending on the management region, management may develop plans at a different time. Consistency in planning is necessary for effective planned implementation. The plans will become higher quality than they were previously.
• Proper Understanding
  • ​​​​​​​The personnel need to comprehend every plan of the company. Each person should comprehend their work in order to complete it correctly. There will be little purpose for these ideas if they are not adequately carried out. Therefore, a good plan is the one which is fully understood by people who are involved in the implementation of plans.
• Management Information System
  • All pertinent statistics and figures ought to be available to management. These kinds of information will enable them to appropriately formulate their plans. Before making plans, managers need to have access to data and facts.
• Economical
  • Planning needs to be practical and cost-effective. As a result, the planner does a cost-benefit analysis. It is crucial for setting specific, quantifiable objectives, getting a comprehensive understanding of the various potential courses of action, and creating derivatives strategies.
• Comprehensive
  • ​​​​​​​Planning should consider each and every element of the business structure. These must to be comprehensive and capable of effectively achieving the goals of the company. Multiple components of the plans must therefore fit together on it.
• Planning Must Start at the Top
  • It serves as the foundation of an organization. Without it, the organization would be unable to function and accomplish its objectives. So, it needs to be decided at the very top of the organization. While all exports are present at the top level, they nonetheless plan carefully and pay close attention.
• Flexibility
  • Due to the fact that the environment might vary in modern business and affect the ability to obtain an effective outcome, there must be some flexibility built into business plans. As such, there should always be room to add or substitute key elements as needed.
• Dynamic Manager
  • The planning organization should be dynamic in character. He or she ought to believe that preparations are being made for the future course of action. They are accountable for both the organization's successful and unsuccessful performance.
• Careful Premising
  • The planning environment should be thoughtfully set up. Ideas are what support the creation of plans. Planning is done with the premise of the future. The presumptions relate to future events that are expected to occur. Making plans for future events always includes making assumptions.

Reference

Poudyal, Dr.Santosh Raj. Principles of management. Bhotahity,Kathmandu: Asmita Book publishers & Distributors(P)Ltd, 2011.