Joana Marie H.

Usop
ABM8
Assignment Nos. 14
Decision Making and Uncertainty

What do you think about the significance of decision-making for economists/managers inside
the organization? Discuss the practical application of decision-making inside the company.

In reality, economics is vitally important subject because it is the study of making choices.
More specifically, it is the study and practice of making choices in a world of limited resources.
The most important job of a business manager is to make decisions and its main goal is to help
people make better decisions. Making a decision can be defined as the process of choosing the best
course of action from a variety of options.
A manager's decision-making is linked to his or her planning, organizing, directing, and
regulating functions. Making decisions is critical for achieving organizational goals/objectives
within the time and budget constraints. Managerial decision-making is a widespread function
aimed at accomplishing organizational objectives.
Not only to the economist but also it can apply in every individual, People make choices because
they cannot have everything they want. All choices require giving up something. Economic
decision-making requires comparing both the opportunity cost and the monetary cost
of choices with benefits.
Quite often, the decision making process is fairly specific to the decision being made. Some
choices are simple and seem straight forward, while others are complex and require a multi-step
approach to making the decisions.

Is decision making is the same as problem solving. Explain.

Both decision making and problem solving use information to inform a certain action, but
that’s where the similarities end. Problem solving is a method while decision making is a process.
Problem solving, as the name implies, is solving a problem. Meaning, it is a method wherein a
group or an individual makes something positive out of a problem. Problem solving is an analytical
process used to identify the possible solutions to the situation at hand. Making decisions is a part
of problem solving.
Decision making, as opposed to problem solving, involves the process of choosing from
among several alternatives to move the company up and forward, to change what you’ve been
doing to support a strategy that promises innovation and growth. Managers fill their days with
problem solving, but successful executives know they have to do more. Many people use the
terms problem solving and decision making interchangeably, but they are not the same.