Important elements in decision making
1) Established goals- a businessman has to first set goals. He has to think and established his objectives. Without goals the process of decision making cannot start.
2) Defining tasks- secondly, for achieving the goals certain tasks are necessary. So the second element in decision making is defining tasks. In other words it means what job is to be done.
3) Searching for alternatives- third element in decision-making in search for alternatives. One has to think and search for alternatives available to accomplish the defined task.
4) Developing plan- after alternatives have been searched, a businessman has to plan his action and judge which one of the alternatives would be the best.
5) Rational thinking and reasoning- decision –making involves deliberation i.e., thinking. This thinking should be based on reason.
6) Situation- a decision is always related to a situation. With the change in situation the decision is also changed.
7) Evaluation- in arriving at a decision evaluation of different alternative is also necessary.
Individual and group decisions
In small business it is the individual who takes decisions. These are called individual decisions. These decisions are based on the decision –making capability of the individual. Decisions taken by a group of people like board of directors are called group decisions. There, a number of people take part in taking a decision.
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