Role of Decision Making in Business administration

By Juliet D'cruz


Decisions play a crucial role in determining managerial and organisational activities. It can be defined as an action plan that is developed purposely from a set of alternatives that will aid a company to reach its managerial goals and objectives. Decision-making is an indispensable component of every organization, and it sustains the overall performance and success of any endeavor. No organization can run smoothly and get work done efficiently without prioritizing the importance of making important decisions. 

They are made at every step and every level of the management to function seamlessly. Moreover, the decisions serve as a core functional value that an organization adopts and lives up to , ensuring optimum growth and drive in terms of the products and services they offer. 

Considering a career in business management and wondering if you should do a business administration diploma, then you are at the right place. Read on as we discuss the importance of decisions and its role in business management. 

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Decision making is the process of selecting a course of action from possible alternatives to reach a specific solution for a problem. It is therefore a consultative and collaborative affair that is performed by professionals for driving better results. Thus, it’s a dynamic activity and a continuous one, affecting every level of an organization. Decision-making also mandates that intellectual minds play a huge part in it, so that the decisions made are an amalgamation of scientific and solid knowledge based on experience, maturity, and skills. 

Decision-making can also be regarded as a system of checks and balances within an organization that allows it to grow both vertically and in a linear way. This means that decisions are made as they seek goals — business objectives, company vision, missions etc. to achieve such goals an organization faces myriad obstacles at administrative, marketing, and operational domains. All these areas are conjoined, and problems meted out through comprehensive decision making. No decision meets an end as it may give rise to newer problems. That’s why it is a continual process which is highly dynamic. 

Because of its significance, decision-making in a management setting cannot be undertaken by whims and need to follow certain steps, like:

  • Defining what the problem is
  • Gathering all data and information about the same
  • Weighing the options and choosing the best alternative
  • Plan and execute that option
  • Perform a follow-up action

Every decision-making process has an end goal or conclusion to reach — a choice to act upon something, or not act, how and why to take a course of action, recommendation as well as opinions that cater to the decision making. Sometimes it leads to redefining the issues faced by an organization. The three decision-making processes, are therefore, referred to as — problem seeking, solving, and avoiding.

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