Decision making
Decision-making is the critical key to the survival of an organisation, more so in this present time where we see economic boundaries between countries crumble and businesses become more complex, global and knowledge-driven. Managers need to ensure that their organisations are continuously innovated and improved in order to achieve and maintain a sustainable competitive edge. In fact, Potter (1985) highlighted that it is this competitive ability which is considered to be at the core of the success or failure of a firm. Managers realise that if their organisations are to survive in this dynamic and uncertain environment, they have to make decisions concerning new business opportunities, products, customers, suppliers, markets and technical developments. This clearly indicates that the most important managerial attribute is the ability to make the right decision. The outcomes of the decisions will be used as the benchmark to evaluate whether managers are successful or not. Therefore, the question that arises is how managers make decisions and whether they are rational or irrational.Stoner and Freeman (1989, p.165) defined decision making as "a process of identifying and selecting a course of actio
(1985), Competitive advantage, New York, Free Press. The fact is, managers must solve problems and make decisions. Using emotion in decision making is quite often seen as irrational. Scientific management, also known as Taylorism after its pioneer, Frederick Taylor, involved the breaking down of jobs into a series of steps, which could be performed by a number of different operatives doing repetitive tasks. This is bias due to ease of recall. In actual fact most of the decision making is 'bounded' due to human limitations and failings. Collect and analyse data to confirm problem is real. RATIONAL MODELIt may be naturally assumed that most of the important corporate decisions are made rationally. At the end of the process, the manager will choose the alternative that is most likely to yield the optimal result. And on a personal note, the quality of his decisions determines his success in the organisation.
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