For an organization to have effective project management, the appropriate decision should be vital towards achieving its objective. Glimcher & Fehr (2013) suggest that one has to ask the question, i s decision making essential in an organization and why? These are some of the questions that the leadership of organizations tend to ask and the answer is yes. The answers are addressed through its advantages.
Advantages
Decision making helps in the selection of the best alternative in an organization by evaluating the different pros and cons of each alternative. Decision making also facilitates the implementation of managerial function such as staffing and control in the organization. It also assists in the evaluation of managerial performance where the outcome of the decisions shows the quality of leadership whether efficient or inefficient. Right decisions also help in the successful operation of business towards raising its profits.
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Risks
Experts in decision making are also human and may be biased in making decisions leading to an undesirable outcome. Risks in decision making include time wastage in the organization in trying to implement a poor decision. The organization also risks the cost involved in decision making, and lastly, the organization may risk losing its reputation to its customers and investors primarily when a wrong decision occurs.
Decision-Making Tools for Leaders
Decision Matrix
A decision matrix is a tool that involves the leader evaluating all the available options in decision making. The leader, in this case, creates a table and notes down all the available options into the first column ( Hazır, 2015 ). The options in the first column are followed by the factors that affect the decision placed in the first row. The different options are then weighed against their factors to determine the most critical options. After the weigh the best strategy and decision for the organization is selected depending on the final tally.
SWOT Analysis
A SWOT analysis is merely a decision tool where the leader gets to evaluate on the strengths of the decision to be made, its weaknesses, the opportunities that arise from it and lastly the threats that arise from taking the decision.
Cost-Benefit Analysis
In the cost-benefit analysis, the leader weighs on the financial ramifications of the possible decisions. The leader then makes the final decision by selecting the alternative which makes much sense depending on the economic perspective of the organization ( Govindan, Rajendran, Sarkis & Murugesan, 2015 ). Especially the decisions directed towards making profits.
References
Glimcher, P. W., & Fehr, E. (Eds.). (2013). Neuroeconomics: Decision making and the brain . Academic Press.
Govindan, K., Rajendran, S., Sarkis, J., & Murugesan, P. (2015). Multi criteria decision making approaches for green supplier evaluation and selection: a literature review. Journal of Cleaner Production , 98 , 66-83.
Hazır, Ö. (2015). A review of analytical models, approaches and decision support tools in project monitoring and control. International Journal of Project Management , 33 (4), 808-815.
