A manager is faced constantly with choices in which a good decision will advance the fortunes of the enterprise and a bad decision will not. The manager who understands the nature and principles of decision making will cope with this problem more effectively than the manager who does not.
If there is one universal mark of an effective manager, it is decision-making. All matters relating to planning, organizing, staffing, directing and controlling are settled through decisions made by managers. Decisions are required both to solve problems as well as to take advantage of opportunities.
Management is essentially a decision-making process. Decision making permeates through all managerial functions and all areas of business. In every function of management, choice has to be made among alternative courses of action. In fact, "whatever a manager does he does it through making decisions.
It is through his decisions that a manager gives direction to the behavior of his subordinates. Consciously or unconsciously, every executive has to take several decisions everyday irrespective of the nature of job and the level of authority.
According to D.J. Clough, management is the art and science of decision making. Simon considers decision making as synonymous to management. One may differ with these views. But decision making is the means for carrying out managerial tasks and responsibilities.
Managers are chiefly concerned with making decisions that will influence the actions of others. A manager is by profession a decision-maker. The drive and tempo of an organisation are determined largely by the timeliness and correctness of managerial decisions.
The hall mark of some of the outstanding managers has been their ability to take decisions under difficult conditions. The raison deter of a business executive is to make and execute decisions.
Thus, decision making is the heart of management Planning. It is the vehicle for carrying out managerial workload and discharging managerial responsibilities.
However, every type of manager does not take policy decisions. As a figure-head, a manager performs certain activities in which very little decision making is involved.
For instance, a project officer prepares a report and decision making responsibility lies with someone else. Similarly, a staff manager acts in an advisory capacity wherein decision making is not the primary task.