A Critical Evaluation of the Impact of Decision Making on Organizational Performance (Case Study of Choice Farm Ltd.)

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study        

Every day, people make decisions in their homes, schools, political and governmental organizations, business boardrooms, and executive offices. Leaders and managers at the top of the organizational structure make choices, particularly strategic decisions (Hickson et al., 1986). Decision-making, by definition, is the process through which managers identify and seek to resolve organizational challenges (Bartol and Martin, 1994). According to Harris (2009), decision making is identifying and competently picking from a variety of possibilities based on personal preferences. It encompasses a wide range of processes that serve as bridges between thinking and action, as well as behaviors themselves (Talley, 2011).

Notably, decision-making is a critical organizational activity that affects individuals, groups, and organizations at all levels. In the organizational structure, it is frequently linked to problem-solving and group procedures. The importance of decision-making in today’s organizations has become even more important as technology has advanced and our capacity to engage in more efficient operations has increased. Members of an organization are frequently tasked with making quick judgments without the information or skills necessary to do so. However, in whatever type of organization, decision-making is one of the most crucial roles of managers in attaining high performance (Nooraie, 2012).

Organizational performance is one of the most significant issues in management study, as well as the most important criterion in evaluating organizations, their activities, and their environments, as evidenced by its widespread use. Profitability has long been used as a yardstick for evaluating an organization’s performance. No one wanted their business operations to be recorded as losses during the accounting period. As a result, managers in companies were encouraged to create a profit throughout company operations and at the conclusion of their accounting period. Managers must make strategic decisions in order to map their organization’s route to attaining its objectives as dictated by the board of directors and senior management behind those profits. Managers required data to make informed business decisions. Despite the fact that managers received a lot of knowledge before making judgments, they might not make the best strategic decisions for their companies.

1.2 Statement of the Problem

It is a key managerial activity in all sorts of businesses, large and small, commercial and non-profit, private and public to make strategic decision on how to advance the growth of their company (Elbanna and Child, 2007). When properly executed, strategic decisions provide a chance to reposition and realign an organization to better “fit” its environment (Harrison, 1996). As a result, successful strategic decision making allows an organization to maintain a competitive position, align internal operations with the external environment, and survive threats and challenges, whereas a single, poorly made strategic decision can lead to an organization’s demise and result in corporate embarrassment, large economic losses for stakeholders, or even bankruptcy, due to their magnitude (Mueller et al., 2007). As a result, a strategic decision process must be characterized by novelty, complexity, and open-endedness, as the organization typically begins with little understanding of the decision situation it faces or the path to its solution, as well as only a hazy idea of what that solution might be and how it will be evaluated once it is developed. As a result, Noah (2008) underlined that managers’ engagement in strategic decision-making fosters a sense of belonging among employees as well as a pleasant working environment in which both management and employees willingly contribute to improving the organization’s success. It is upon this premise that this study seeks to examine a critical evaluation of   the impact of decision making on organizational performance.

1.3 Objectives of the study

The broad objective of this study is to examine the impact of decision making on organizational performance. Specifically, the study seeks:

  1. To ascertain the strategies or process through which managers arrive at decision making.
  2. To examine the factors that determines decision-making in organizations?
  3. To investigate if there is any correlation between decision making and organizational performance

1.4 Research Questions

  1. What are the processes  through which managers arrive at decision making in organization?
  2. What are the factors that determines managerial decision-making in organizations?
  3. Is there is any correlation between decision making and organizational performance?
  4. What are the  impact of decision making on organizational performance?

1.5 Significance of the Study

Findings from the study will be relevant to managers of organization as it  reveals  different managerial functions on appropriate strategic decision-making, which contributes to keep the survival of organization in the market and competitive position in the market. Also the cooperation in managerial functions, contributes to raise the level of performance within the organization.Empirically, the study will contribute to the general body of knowledge and serve as a reference material to both scholars and student who wishes to conduct further studies in related field.

1.6 Scope of the Study

The scope of this study borders on  the impact of decision making on organizational performance. It will ascertain the strategies or process through which managers arrive at decision making. It will examine the factors that determines decision-making in organizations and investigate if there is any correlation between decision making and organizational performance. The study is however delimited to DATAPLUS INTERACTIIVE LTD, ABUJA.

1.7 Limitation of the study

Like in every human endeavour, the researchers encountered slight constraints while carrying out the study. The significant constraint was the scanty literature on the subject owing to the nature of the discourse thus the researcher incurred more financial expenses and much time was required in sourcing for the relevant materials, literature, or information and in the process of data collection, which is why the researcher resorted to a limited choice of sample size. Additionally, the researcher will simultaneously engage in this study with other academic work. More so, the choice of the sample size was limited  as few respondent were selected to answer the research instrument hence cannot be generalize to other corporate organizations. However, despite the constraint  encountered during the  research, all factors were downplayed in other to give the best and make the research successful.

1.8 Definition of Operational terms

Decision Making Process: Decision making is the process of making choices by identifying a decision, gathering information, and assessing alternative resolutions.

Managerial function: At the most fundamental level, management is a discipline that consists of a set of five general functions: planning, organizing, staffing, leading and controlling.

Organizational performance: Organizational performance comprises the actual output or results of an organization as measured against its intended outputs.

 

REFERENCE

Bartol, K.M., Martin, D.C. (1994), Management. 2nd ed. New York:McGraw Hill,Inc.

Hickson, D.J., Butler, R.J., Cray, D., Mallory, G.R., Wilson, D.C. (1986), Top Decisions: Strategic Decision-making in Organizations. San Francisco: Jossey-Bass Publishers

Litherland, N. (2013), Available from: http://www.ehow.com/ howdoes_5280248_decisionmaking-process-managers.html. [Lastaccessed on 2013 Feb 02].

Noah, Y. (2008), A study of worker participation in management decisionmaking within selected establishments in Lagos, Nigeria. Journal ofSocial Science, 17(1), 31-39.

Nooraie, M. (2012), Factors influencing strategic decision making processes. International Journal of Academic Research in Business and Social Sciences, 2(7), 405-429.

Tatum, B.C., Eberlin, R., Kotttraba, C., Bradberry, T. (2003), Leadership,decision making, and organizational justice. Management Decision,41(10), 1006-1016.

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