Decision making is the ability to analyze the available options and select the best action plan to complete the given task. It is an integral part of human life in both the personal and professional world and requires making a choice that will result in defining the outcome or the result because of that decision. This is not an inherent but an acquired skill that is in high demand in the professional world because it enhances your leadership qualities and makes you eligible for such a role. It is a trait that employers find appealing because it is considered the hallmark of a good leader.
The decision-making skills include involvement in a thought-process where an individual has to weigh the right and wrong and the pros and cons of options and think about the outcome of that alternative. The skill encourages prompt action in any given situation so that the resulting chaos avoids on time.
It is a fact that the best decision-makers are those individuals who can integrate intuition and logic to come up with a solution that proves a godsend. They have an open mindset, are realistic and good listeners, know their priorities and can be flexible as per the demand of the situation.
Strategic decisions have to be made for the well-being of a task or project, and it is at such times you need someone to step in and make a big decision that will increase the overall efficiency and productivity of an organization as well as the employees. Decision making is a process where relevant information is taken into account and deliberated for probable outcomes, and then an informed decision is made after a measured approach.
The key is to leave out your emotions and integrate different perspectives logically and thoughtfully so that you can look at the problem from several angles. Remember the sign of a good decision-maker is that he will always be calm in the midst of a storm and never let circumstances and situations overwhelm him into making rash decisions.
1. Importance of decision making in achieving objectives
Making the right decisions and choosing the best possible path is an important skill to have in your corner as the need for individuals with such qualities is on the rise. The value for the right decision-makers has increased, and every organization is looking to hire them for topmost positions in their firm. It is not a job for faint-hearted nor does making decisions depend upon educational background instead it is general knowledge, common sense, a strong dose of reality and an ingrained value system that has been known to produce the best decision-makers in the world.
An organization has a set of values, mission, goals, and objectives and it needs people at the top positions who can help the company to achieve them with minimum fuss and within the given time frame and budget.
The importance of decision-making skills in a business is that it assists in achieving organizational objectives by utilizing company resources, looking at best alternatives and keeping the workforce under him satisfied. Remember establishing objectives and determining future activities to reach the objectives is the primary function of a decision-maker and he creates and implements his action plan accordingly.
2. Importance of decision making in the utilization of resources
An organization has numerous resources at its disposal so that it can take care of its goals and objectives and reach maximum output in the given time. These include human resources or manpower, equipment and machinery, materials, monetary funds, operational methods, market reach and of course, data and information. A company can prosper when it utilizes its resources without wastage and leakage.
The importance of decision making at the right time is that the firm can continue with its operations at minimum cost. When there is a lack of clarity, the outcome is bound to disappoint you. Using the right resource at the right time is an important criterion of the decision-making process.
The decision-maker needs to learn about the task, analyze and consider his options and tackles the problems in a manner he thinks is best for the firm. It is the effectiveness of the decision-making process that can optimize the use of both physical and human resources at increased productivity.
3. Importance of decision making in motivating employees
Human resources is one of the main components of an organization that helps it to achieve its business goals. Satisfied and happy employees are an asset that gives credence to the workflow and boosts the levels of productivity. The importance of decision making in an organization is that when you have a strong leader at the helm, the employees tend to follow him and this makes it easier to guide and implement the overall framework of operations.
It inspires confidence in the workforce, and they strive hard to achieve company goals. In crises, the right choices by the decision-maker have far-reaching effects on the employee’s mindset, and it boosts their belief in their management.
Rational decisions along with benefits and facilities are offered in a timely manner, and this is the reason why the employees are motivated to give their best.
4. Importance of decision making in growth and diversification
The importance of the decision-making process is very impactful during the growth and diversification process of an organization. A business environment is unpredictable where you do not know what will happen next, and the people at managerial levels have to take hard decisions from time to time.
These are not choices that everyone can make and this is why in such instances, the organization looks for managerial positions to make tough choices if the business environment calls for it. The decision-maker must have enough experience to handle critical issues because it is his in-depth knowledge and intuition that is going to save the day.
During critical situations, mergers, and acquisitions, the company brings forth its top decision-makers to consider the propositions and handle most of the issues. Any change will have both a direct and indirect impact on an organization and change the tone and structure of the business. Hence it is important that the company along with top decision-makers can consider all its viable options.
5. Importance of decision making in dealing with problems
A person entrusted with making decisions has to be strong to make, implement and go through his decision even if people are against it and hate him for doing so. It is important to have the necessary confidence and belief and make sure to follow the orders as per his directive without worrying about the backlash for his decision.
Issues, problems, and mishaps are part of an organizational structure, and it is impossible to avoid them. What a company can do is place a person with strong individuality at the helm so that tough decisions can be made in the interest of the firm.
It is in adverse conditions that the decision-making skills of a person come in handy so that his hard choices and tough calls without delay can help the business to survive the crises and follow a path of growth and development irrespective of any issues and problems.
6. Importance of decision making in the execution of managerial functions
The managerial functions include making decisions on the course of their work and ascertaining that these are carried out under the defined organizational goals. The decision-making ability has a direct impact on all the managerial functions, for instance, organizing, planning, controlling and directing. Timely decisions tend to save the day and result in the overall success of an organization.
It is important that the person with decision-making powers stands firm in adverse conditions and does not second guess himself at the drop of a hat as this action will make him lose the respect of his team and ruin possible outcomes. The importance of placing a decision-maker at an important position is that he will save ample time by making fast and educated decisions.
When a person is comfortable with his powers, he fosters respect amongst the employees because they can trust him with good decisions that will steer the company in the right direction. It prevents conflict in the workplace and increases efficiency and productivity that are necessary for organizational development.
7. Importance of decision making in increasing efficiency
One of the most in-demand skills in an organization is the ability to make good decisions especially when things are going downhill or look shaky. Taking some decisions is easy and looks like a piece of cake whereas some prove very difficult. Any wrong move can result in severe mishap and long-lasting repercussions.
Some people have the habit of delaying their decisions, but they fail to realize the importance of choosing at the right time. It will have a direct impact on the efficiency of the company. Set a time-frame and stick with it in almost every situation. Do not procrastinate, because considering once is good but deliberately repeating it until you are bogged down by its weight is harmful to yourself as well as the organization’s efficiency and productivity.
It is imperative to seek optimal efficiency if you want to achieve company goals and take the entity to greater heights. The importance of the decision-making process is that it helps in increasing efficiency. It is the rational decisions that boost the effectiveness of an organization.
If the returns you are deriving during your business are high and the costs are comparatively lower, it is known as efficiency. Remember it is the rational decisions you make that increase the effectiveness of a firm.
8. Importance of decision making in selecting the best alternative
Decision making is one of the most important functions of an organization, as several tasks are directly dependent on it. Almost all the managers are involved in this process so that quick decisions can be made on time and the business activities can continue at its desired pace. Several issues crop up, and the managers have to tackle them and find a solution from several options by understanding why one alternative is better than the other.
There is no doubt there are several solutions for each problem; the difficulty lies in finding the one that will prove fruitful for your company. The importance of the decision-making process is that it helps an individual to select the best possible alternative amongst the multiple choices.
It depends upon the decision-maker to analyze all the options using numerous accounting and financial techniques and tools so that he can make the best decision for his company.