What is Management Decision Making and its Types?

Decision-making is an important concern for the management of the concerned company. It provides an overall management decision-making process that strengthens the performance and growth of the organization. Read on to learn more about it!

Though a manager has to perform a lot of duties, tasks, and actions, taking decisions is one of the main responsibilities of a manager. Decision-making is the primary skill and main characteristic of every managerial role. Proper decisions play an important role in any business's success and growth. Accurate and timely decisions are the reason behind the smooth functioning of the business and satisfaction among employees as well as higher authorities. Proper decisions pay the path to high success rates, rapid growth, and well-structured business expansion.

Management Decision Making

decision making in management is not a big thing. In simple words, a manager has to take accurate and precise decisions in order to solve various internal and external problems related to the business and operations. Apart from solving problems, management takes decisions in the expansion and diversification of a business. Management decision-making also ensures the making and designing of proper blueprints for business growth and expansion. Management decision-making is the fundamental and most important process behind companies' policies, rules, and work structure. The management decision-making process is huge, and its complexity depends upon the objective behind the decision.

Management Decision-Making Process

The management decision-making process is quite complex but straightforward. It involves multiple steps, and every step has to be followed carefully. Design-making and leadership skills are required to follow the decision-making process. A person has to be very smart, experienced, and professional to be a part of the decision-making process. Let's see the process.

Create Objectives

Every organization or business has some objectives like profits, revenue, diversification, and brand image. Whether you talk about a multinational organization or a small local organization, every business is running on some objectives. So firstly, you have to create or establish objectives.

Decision Identification

Once you establish objectives, you will find some problems, and as everyone knows, decision-making is a type of solution. So, the next step is to identify and define the problem and then look for the solutions (decision-making). Now, if the decision is required, go for the next steps.

Work on data and information

One problem is identified work on data and information. The more data and information you have, the more appropriate decisions you will take. Information and data allow you to take decisions easily and, most importantly, fastly.

It’s time for alternatives

Now you have information and data; you will see a lot of solutions. So this is one of the most important steps in the decision-making process. You have to look for multiple alternatives and select the most appropriate ones.


This is also very important because you are at the final stages of the decision-making process. As you have chosen multiple alternatives to evaluate each of them extensively. Measure and evaluate every part and action of the alternatives. Consider measuring the benefits and consequences of each course of action and thoroughly research every alternative and its process.

Select The Alternative

Select the most appropriate and accurate alternative based on your evaluation and research. Here you can choose one or more than one alternatives based on the requirement and complexity of the problem. This step is quite tricky as here, you have to select the best from the best, which will directly impact the company's growth and success.


When you have chosen the suitable alternative, it's time to implement that solution; implementation must be well structured so that the results will be fruitful. Also, make sure to implement your decision in multiple steps ensuring effectiveness and efficiency.


Once you are done with the implementation, take review the complete decision-making process, especially the implementation part. If you find any mistakes or improvements, go for that; otherwise, the decision-making process is completed.

Types of Decision-Making in Management

As mentioned, every managerial role requires decision-making, and as every department has different needs and objectives, decision-making types may vary. Design-making types also depend upon the level of management. The higher the level of management more complex the decision-making process will be. Here are different types of decision-making in management.

  • Individual and Group decision making

  • Personal and Organizational decision making

  • Policy and Operating decision making

  • Routine and Basic decision making

  • Programmed and Non-Programmed decision making

  • Planned and Unplanned decision making

  • Tactical and Strategic decision making

  • Organizational, Departmental, and Interdepartmental decision making

Techniques Used in Decision Making

Management is considered a science as well as an art. So, it works on a lot of principles, theories, and techniques. decision making is an integral and important part of management, so it is also based on some techniques. Though there are many techniques and a manager can make his own technique, some of them are popular, effective, accurate, and, most importantly, verified. Here are some most important and common decision-making techniques.

  • SWOT Diagram − The process of strengths, weaknesses, opportunities, and threats, popularly known as the SWOT analysis diagram plays a crucial role in making the management decision-making process easy. It covers the most important aspects of the organization.

  • Marginal Analysis − The point of marginal analysis shows the organization its profitability and performance growth. It makes the decision-making process thorough and helps stabilize the important decisions the organization is yet to take.

  • Pareto Analysis − This is one of the formal techniques of the management decision-making process. It helps analyze the possible courses of action that are yet to be developed for competition in the organization.

  • Decision Matrix − As there are many managerial activities that take place in an organization, the decision matrix helps segregate the important aspects of the organization based on the performance evaluation of the company.


A managerial role or management can't be imagined without decision-making as it is the fundamental characteristic. decision making in management is directly connected with every employee of the organization despite their position and department. It decides the future of the organization and helps it survive in difficult situations. It also plays an important role in developing the company's goodwill and brand image, ultimately increasing the valuation and market of the company. All you can say is decision-making is the lifeline of any management.