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In carrying out management functions, such as planning, organizing, motivating and controlling, a manager will be continually making decisions. Decision-making is a key management responsibility.

Some decisions are of the routine kind. They are decisions which are made fairly quickly and are based on judgement. Since a manager is experienced, he knows what to do in certain situations. He does not have to think too much before taking action. For example, a supervisor in a supermarket may decide, on the spot, to give a refund to a customer who has brought a product. The manager does not have to gather a great deal of additional information before making the decision.

Other decisions are often intuitive ones. They are not really rational. The manager may have a hunch or a gut feeling that a certain course of action is the right one. He will follow that hunch and act accordingly. Thus, when looking for an agent in an overseas market, a sales manager may have several companies to choose from. However, he may go for one organization simply because he feels it would be the most suitable agent. Such a decision is based on hunch, rather than rational thought.

Many decisions are more difficult to make since they involve problem-solving. Very often they are strategic decisions involving major courses of action which will affect the future direction of the enterprise. To make good decisions the manager should be able to select, rationally, a course of action. In practice, decisions are usually made in circumstances which are not ideal. They must be made quickly, with insufficient information. It is probably rare that a manager can make an entirely rational decision.

When a complex problem arises, like where to locate a factory or which new product to develop, the manager has to collect facts and weigh up courses of action. He must be systematic in dealing with the problem. A useful approach to this sort of decision -making is as follows: the process consists of four phases:

• defining the problem;
• analyzing and collecting information;
• working out options and
• deciding on the best solutions.

While sorting out a complex problem a manager must …

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 be effective and flexible

 use a systematic approach

 make a quick decision