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Decision-making has been a critical component of management since Fayol identified the major functions of management in the early 1900s. Nearly a century later, decision-making continues to be an integral part of the success (or failure) of managers. The nature of the choices and the way decisions are being made, however, has undergone some significant changes.
Decision-making is crucial at all organizational levels. While the type of decisions to be made may vary with the position occupied within the organization, the basic principles remain the same. Top managers generally make more strategic decisions (with longer time horizons) and middle managers tend to make more tactical and operational decisions (with shorter time horizons).
Decision-making is the choice that is made among different courses of action. Part of the decision-making process for the manager is to also decide who should make the decision and how it should be made.
Programmed And Non-programmed Decisions
There are two major categories of decisions. Both are made by the hundreds each day by everyone. Some are not even thought about.
Programmed decisions are those that are routine in nature. These are the decisions that are not always thought about. There are generally "canned" responses to these situations that are used. Since the problem was encountered before, a decision was made. When the problem recurs, the same decision is made -- without really even thinking about it.
Non-programmed decisions are those that are new. They are unique and have not been encountered before. These unique problems need new solutions. Creative problem solving,;is required more with non-programmed decisions to arrive at these new solutions.
The Rational Decision-Making Model
The rational decision-making model is perhaps the most common framework used for making decisions. While it is appropriate for some decisions, it is not appropriate for every decision.
The first step in rational decision-making is to identify very clearly what the problem is. Too often the problem is misdiagnosed. The decision-making that follows will then be faulty if the wrong problem is identified. Problems today must be framed in a new perspective. Framing problems in terms of what is already known can predispose the decision-maker to "old" solutions.
The biggest issue is identifying symptoms as problems (instead of root causes). When the issue is emotional...