Effective decision making
Definition and concept
Organisations are constantly making decisions at every level. Decision making
ranges from strategic decisions through to managerial decisions and routine
operational decisions. Decision making in business is about selecting choices or
compromises in order to meet business objectives.
However, decision making is not just about selecting the right choices or
compromises. ‘Unless a decision has ‘degenerated into work’, it is not a decision.
It is at best a good intention’ [Drucker, 1967].
Effective decision making is defined here as the process through which
alternatives are selected and then managed through implementation to achieve
business objectives.
‘Effective decisions result from a systematic process, with clearly defined
elements, that is handled in a distinct sequence of steps’ [Drucker, 1967].
Management accountants have key roles to play throughout the effective
decision making process.