The Importance Of Decision Making In Business

Decision making is essential when being involved with a job or company/business. As an employee or employer, there are going to be times where you are faced with having to make a decision. To make these decisions, you would have to use problem solving skills and techniques in order to help you understand the situation you are facing. Ultimately, decisions can either make or break a business. Depending on the situation, company leaders have to respond based on the culture of the company and the severity of the outcome. Decision making plays a role in positive and negative organizational behavior in a variety of ways, including size, training, employees, and conflict. Decisions can adversely affect a company both internally and externally,

Their decisions are based on the amount of knowledge that they have about a long-term outcome (Decision Making 1). Once they understand what the problem is and the consequences of it,then they would take action in a timely fashion to subdue the problem. Implementing this process allows for effective and good decisions to be made, which would ultimately aid in the company’s success. A key difference, however, between large companies and small companies is who is involved in the actual decision making process. Larger companies involve more people, such as the Corporate Executive Officer, Chief Financial Officer, and a variety of other corporate managers (Decision Making 1). This is because the company has a lot of people who are invested in it, therefore enabling them to solve problems in an efficient and smart manner. On the other hand, smaller companies tend to have less people involved in the decision making process, such as just the CEO and top manager. They do this because they lack the resources necessary to make a quick decision as opposed to those who have the ability to use a number of individuals with different inputs (Decision Making 1). With these resources, how would companies be able to train their managers concerning short term and long term

They train managers based on scenarios that could happen and how to analyze the situation and rationally act upon it. Many companies implement the Rational Model, a four step model that describes how a manager should go about the decision making process (Kinicki & Fugate, 252-253). The first stage is to identify the problem or opportunity. Here, managers would be trained to address the problem or opportunity at hand. In doing so, it enables the manager to have a starting point and act upon it. Next, the manager is trained to generate solutions, whether they are obvious or creative. Managers tend to struggle in this stage because they feel pressured to make quick decisions rather than constructive decisions and looking at all the possible solutions that there could be. To fix this problem, trainers suggest managers to spend more time considering the possibilities that are present rather than simply diving into the first solution that they think of (Kinicki & Fugate, 253). Such rash decisions could either pose a risk for the company or make it more prosperous. After looking at all possible solutions, managers are then trained to evaluate their options based on internal factors, such as ethics. They have to keep in mind the resources that they have as well as whether or not the decision would be effective and good for the company. Lastly, managers would