The Importance Of Effective Decision Making

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The Importance of Effective Decision-Making Inadequate information, data, and knowledge. For rational decision-making to be accurate, reliable, and complete, information about various aspects of the problem under investigation is necessary. Possible future trends can be estimated with the help of such information. This facilitates rational decision-making. However, adequate and reliable information may not be available at the time of decision-making. As a result, the decisions may become defective or irrational or may prove faulty in the course of time. This is how decisions become irrational. Leader’s choices and actions are the result of the leader’s experiences (Bennis & Goldsmith, 1997). Leadership in organizations is driven by uncertainty. How leaders make decisions based on that uncertainty determines the performance of an organization (Hatch, 1997). Decisions are made on the basis of information available about various environmental variables. However, the variables are many and complex in nature. They may be related to political, economic, social, or other unknown variables. It is not possible to study all such variables in depth because of inadequate information or data. This leads to inaccuracy in decision-making. Two variables that drive uncertainty are complexity and speed of change. Both contribute to the state of current and future business environments (Nonaka & Takeuchi, 1995). When practitioners apply academic decision-making theories and styles in
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