Decision making in case of companies is perhaps the most difficult task because if anything bad happens due to that decision than whole blame of failure falls on the person who has taken the decision and that is the reason why companies give decision making power to selected individuals only who have expertise in their area. Decision making in simple words refers to selecting one alternative out of several alternatives, in order to have a clear understanding about decision-making process one should look at various features of decision making –
Decision Making Features
Numerous Alternatives
The first and foremost feature of decision making is that there be should be more than one alternative because if there is only one alternative than there is no need to take any decision as one has to select that alternative due to lack of choices. Hence for example if you want to go from one place to another and that place has only road connectivity than there is no scope of taking any decision as one has to travel by road, however if there is rail transport and air transport apart from road transport than one has to take decision whether to travel by road, air or by train as there are alternatives available.
Evaluation of Each Alternative
Another feature is that one should do a thorough evaluation of each alternative and then select the best possible alternative because if the alternative is pre-decided than it cannot be called decision making. Hence for example, if an individual has a mindset of going by air from one place to another than evaluating rail and road transport makes no sense as the individual has already made up his or her mind of going by air from one place to another and alternatives are of no use to that individual.
Subjective
Decision making is a subjective process because decisions are made by individuals and since each individual thinks differently his or her evaluation of alternative as well as the selection of alternative will be different. Hence for example, if the company has to select 1 project from five available projects and you ask 5 different people in the company to select 1 project out of 5 projects than chances of all 5 persons selecting the same project is next to nil as subjective nature of human beings come into play while making decisions.
Irreversible
Decisions once taken are generally irreversible in nature because once the company has acted upon the decision and if it turns out to be a failure than the company cannot reverse the decision as the company has spent a substantial amount of money and time in the implementation of the decision. In simple words just like one cannot reverse the bullet once an individual has pulled the trigger of the gun in the same way decisions once taken cannot be reversed.
Far-Reaching Consequences
The effect of decisions does not disappear overnight rather decision once taken has far-reaching consequences and any bad decision can haunt the company for years. Hence company should be careful in taking as well as implementing the decision as bad decision once implemented will result in a loss not only for the current year but will also affect the profitability of company for many years to come.
As one can see from the above characteristics of decision making that making a decision is not a simple task and that is the reason why major decisions in case of companies are taken by top management as one bad decision can prove to be very costly for the company and in some cases can lead to total collapse of the company.