Agriculture Reference
In-Depth Information
Decision-making
An overview
Decision-making
is the process of choosing between different alternatives for the purpose
of achieving desired goals. In the following sections, we will look more closely at this
defi nition.
Process
The fi rst important idea here is the recognition that decision-making involves some type of
process. The word
process
implies activity, or doing something. It is important to recognize
that good decision-making is an active process in which the manager is aggressively and
personally involved. Of course, decisions can be made by default; that is, one can do nothing
for so long that there is no longer a decision to be made. Putting off decisions until it is too
late is a problem most people know something about. But effective decision-making includes
an active participant whose actions are timely.
It is important to note that deciding to do nothing is
not
always a default decision.
Deciding to “wait and see” may be a logical and correct choice. A default decision represents
a failure to decide. The end result may be quite acceptable, but any positive result of a
default decision is purely accidental. Any success is in spite of management, not because
of it; therefore, most professional managers do not make default decisions.
Choosing
The second key idea in the defi nition of decision-making is
choosing
. Choosing implies
there are alternatives from which one must select. When one has no alternatives, then there
is no decision to make. The alternatives must also be feasible. They must be realistic and
reachable. For example, quitting or exiting is always an alternative, but it is seldom a realis-
tic one. Choosing also involves selection—picking from among the available options. Such
selection, picking the “right” alternative, is at the heart of decision-making.
Goals
Finally, decision-making is purposeful. Effective decision-making requires that a clear goal
be fi rmly in mind. If management refuses to set clear-cut
goals
at the beginning of the year,
it is impossible to evaluate performance at the end of the year. Firm performance should be
evaluated as one would evaluate employees of the fi rm. Goals or anticipated results should
be clearly outlined as quantitatively as possible to allow assessment of performance at year's
end. Likewise, effective choice requires that some criteria, such as goals, be used to guide
the selection process.
Goals, like alternatives, must be feasible and specifi c. To say “My goal is to make as
much profi t as possible” is not much help in operating a large California vegetable grower-
shipper operation. This is far too general a goal to be of much use. But a specifi c goal, such
as “To generate a 15 percent after-tax return on investment, maintain an annual growth rate
of 5 percent, and provide an opportunity for meaningful employment for family members,”
will be exceedingly helpful in guiding and evaluating day-to-day decisions.
The decision-making process
The decision-making process is simply a logical procedure for identifying a problem, ana-
lyzing it, and arriving at a solution. This can be carried out in a formal manner, where many
