Approaches to Decision-Making

Decisions can be taken in different ways. Four main approaches to decision-making are discussed below:

1.    Centralized and Decentralized  Approach :

In centralized approach to decision-making. Maximum decision is taken by top-level managers though some responsibility is delegated to middle- level managers. In the decentralized approach, decision-making authority is delegated to lower- level managers. In programmed decisions, decentralized approach is followed. Centralized approach is used for making non-programmed decisions.

2. Group and Individual Approach:

Managers take decisions with their employees/ subordinated in the group approach to decision-making. In the individual approach, decisions are taken by the manager alone. It is the one manager decision-making approach. The individual approach is appropriate when (1) there is emergency for taking decisions,i.e. decision-maker  has limited time to take a decision, and (2) resources  are limited. Cost of individual decision-making is less than group decision-making.

3.    Participatory and Non-participatory Approach :

In the participatory approach, decisions are made by seeking opinion of those who are affected by ht decision; there is no formal gathering of superiors and subordinates, as in group decision-making; the decision-maker only seeks information and suggestions from employees in achieving the decision objectives.

In the non-participatory approach, managers do not seek information from employees as the decisions do not directly affect them. They collect information themselves, make decisions and communicate them to the organizational members.

4.    Democratic and Consensus Approach:

In the democratic approach, decisions are based on voting by majority. In the consensus approach, participants discuss the issue and arrive are a general consensus. It is similar to group decision-making where many people are involved in the decision-making process. However, in group decision-making some people agree to others’ opinion because of social or pathological pressures but in consensus decision-making, all the members agree to the decision. Group decision-making reflects the opinion of a few and consensus decision-making reflects the opinion of all the group members.

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