All business is driven by decisions. Some decisions are strategic and far-reaching, attending to both the immediate issues as well as the long term; these decisions set the course of the organisation for the foreseeable future. Other decisions are operational – they’re about implementing and developing strategy. Then you have monthly and weekly decisions that set the course for the immediate future. And finally, you have daily decisions, which set the course for the day and sort out the problems that arise on, well, a daily basis. Thus decision making is a series and pattern of activities, and a process based on the best possible information available at the time.
Decision making also takes place proactively (the organisation and the people in charge try to impose their way of doing things on their environment and the market) as well as responsively (the organisation responds to what’s going on in the outside world). And decision making happens in response to crises and emergencies.
In practice, a business has to be able to make effective decisions that cover every eventuality. You can’t simply impose yourself on your environment and markets all the time, no matter how powerful or expert you may be. In uncertain markets and trading conditions, the more flexible, dynamic and responsive you can be, the better. And every business needs crisis management systems because they all face crises from time to time. (The goal, of course, is to organise yourself so that crises happen rarely and due to totally unforeseen circumstances, not circumstances that are under your control.)
In a perfect business world, all decisions would be made on the basis of a full assurance of success. Products and services would sell in the volumes necessary, and returns would be assured. Staff would work in harmony with each other. Companies and organisations would make predictable responses to the actions and initiatives of competitors. Figures would support everything that was proposed, and everyone would settle down to a mutually assured prosperity.
This ‘perfect world’ is quite clearly a fantasy. And yet people – even top managers – seek it. They fall back on the mantra ‘The figures speak for themselves’, trying to convince themselves that a perfect world can, indeed, be attained. But the thing is, figures never speak for themselves. Figures are just symbols on a page. It’s how you use figures, and why, that matters.
In practice, business decisions are rather different. Of course, decisions are made in the best interests of the immediate and long-term viability of the business.
Top management is responsible for making strategic and operational decisions on the part of the organisation and its stakeholders. So, people in top management or senior positions within the organisation need to know how the organisation works and where their help is needed most. When it comes to making decisions on behalf of the organisation, top management needs to be clear on stakeholder pressures and managerial pressures in order to make the best possible decisions.