Decision-making is a complex administrative process. It serves the purpose of fulfilling organisational objectives. The decisions affect and are affected by socio-economic, political and cultural factors prevailing in this environment.
Therefore, the organisation formally arranges the decisional environment of the individual decision-maker, in this context, the rules and procedures are standardised to help in decision-making.
The process of decision-making is set in advance for the guidance of administrators. The decisional scope is sought to be defined by division of labour and limiting the span of control. Work sub-division specifies the tasks at each level. A limited span of control has the effect of delimiting the task space of a supervisor in an organisation. The authority system creates a mechanism for structuring the different levels of decision-making.
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“The broad and important policy decisions are taken at the top of the hierarchy. Then they are transmitted to the lower echelons and become the guiding criteria for the junior decision-maker who will take decisions of a more detailed and procedural character.
In this context, the organisations can be viewed as a means- end chain, on each level of which the supervisor’s decisions constitute the major value premises in the decisional environment the authority system in an organisation also acts as a quality control device. When decisions taken at lower levels are submitted to the higher authorities for their approval, the content is subjected to a process of scrutiny.
An organisational communication system provides a formal framework of information flow in aid of decision-making. Thus, socio-economic and political data constitute the raw material for a decision, which is provided by the structured communication system.
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The organisations have methods of ‘socialising’ the participants in the decision-making process through management techniques. Training and study for officers on probation is quite common in most large scale organisations. The executive must learn management techniques so that the decisions made by him her are sound and effective.
Organisational values and the formal rules and regulations are sought to be injected into the minds of new entrants. Interpersonal relations have a strong impact on the decision-making process.
Conflict situations between individuals in the organisation are likely to lead to blockage in communication and imperfect flow of data and information. Thus, organisational hierarchy, from this point of view, may in certain situations be an impediment to rational decision-making in an organisation.
To make a wise decision, an executive must engage in distinct steps as mentioned by Herbert Simon:
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i. Identify the problem;
ii. Analyse the problem;
ii. Determine possible and available alternatives;
iv. Evaluate the impact of alternatives; and
v. Select the best alternative.
The ultimate purpose of decision-making in any organisation is to ensure rational, feasible, acceptable and practical decisions. The next important process of administration is communication, which is an integral part of every function.