What is Decision Theory Approach?
The Decision Theory Approach is the approach which helps the manager to take the effective decision in order to grow his business. Decision theory approach uses logical concepts to take the decision. When managers will calculate risks and uncertainties, that time he can take the positive decision that will affect his business.
The managers should take the decision on the basis of facts as well as on the pros and cons. Because the facts help the managers to understand the risks level, if the risks level is high then the manager will not take that decision, if the risks level is low then the manager can take the decision.
Importance of Decision Making in Management
- Decision-making is the best selective process, it gives the best possible alternative.
- Decision-making calculates risk and analysis the all possible alternatives.
- Decision-making is a continuous process which runs until the organizations run.
- Decision-making is a mental process it involves deep thinking.
- Decision-making’s main aim to achieve organizational goals.
- Decision-making also involves a certain commitment.
- Decision -making improves the efficiency of the manager.
Types of Decision Making in Management
Programmed and Non-Programmed Decisions
Programmed decisions are those made with some habit, rule or procedure. Non-programmed decisions are those that deal with unusual or exceptional problems.
Organizational and Personal Decisions
Organizational decisions are the decision that can be take in an offical capacity that would be delegated to others. Personal decisions are the decision that one can take it on his individual capacity, it would not be delegated to others.
Major and Minor Decisions
The major decision means that effects the overall business. i.e Buying a new manufacturing unit. The major decision takes by the top executives of the organization. The minor decisions mean that does not affect the overall activity of the business. i.e buying office superintendent.