Primary navigation:

QFINANCE Quick Links
QFINANCE Topics
QFINANCE Reference
Add the QFINANCE search widget to your website

Home > QFINANCE Dictionary > Definition of decision making

Definition of

decision making

General Management

process of determining what to do the process of choosing between alternate courses of action. Decision making may take place at an individual or organizational level. The process may involve establishing objectives, gathering relevant information, identifying alternatives, setting criteria for the decision, and selecting the best option. The nature of the decision-making process within an organization is influenced by its culture and structure, and a number of theoretical models have been developed. Decision theory can be used to assist in the process of decision making. Specific techniques used in decision making include heuristics and decision trees. Computer systems designed to assist managerial decision making are known as decision support systems.

Recommended Further Reading (Term count)
  • Quantifying Corporate Financial Risk
    by David Shimko
    Consider the case of a company that has experienced six months of cash flows this year and wants to forecast the next six months. The usual way to do this is to predict a cash flow growth rate—expected, high, and low—and to base the analysis on these choices. A sample cash flow projection might be illustrated graphically in Figure 1.Figure 1. Deterministic cash flow forecast for last six months In reality, of course, several different cash flow...
  • Foundations of Multinational Financial Management
    Alan C. Shapiro and Atulya Sarin (6th ed 2008, originally 1991)
    A focused and practically oriented textbook that examines real-life financial management decision-making in an international context. Provide a clear strategy for understanding the impact of financial management processes on business operations. Demystifies and simplifies the subject in a clear conceptual framework that helps learning.
  • Everything You Need to Know About Benchmarking
    by Robin Mann
    Organizations are constantly looking for new ways and methodologies to improve their performance and gain a competitive advantage. As they seek improvements to their own business processes, many organizations recognize the importance of learning from best practices that have been achieved by other organizations. By removing the need to reinvent the wheel and providing the potential to adopt proven practices, benchmarking has become an important...
  • Human Risk: How Effective Strategic Risk Management Can Identify Rogues
    by Thomas McKaig
    Best practices in strategic risk management are intended to prevent weaknesses within corporations causing damage or even pulling down the firm. However, effective strategic risk management tools and techniques became harder to implement as business operations grow, become more complex, and operate in multiple locations. The controls that might have once been deemed acceptable in keeping employees within corporations on the same page begin to be...

Definitions of ’decision making’ and meaning of ’decision making’ are from the book publication, QFINANCE – The Ultimate Resource, © 2009 Bloomsbury Information Ltd. Find definitions for ’decision making’ and other financial terms with our online QFINANCE Financial Dictionary.

Back to top