An effective decision is one which action oriented, goal-directed and provides efficiency in implementation. These three aspects of effective decision are explained below:
i. Action orientation
Decisions are action-oriented and are directed towards relevant and controllable aspects of the environment. Decisions are totally pragmatic in nature and their value is dependent on the success of the actions that follow. Decisions may be treated as an intervening variable which may ultimately lead to the end-result variables. From this point of view, decisions should ultimately find their utility in implementation. Therefore, the decisions to be effective must specify the various actions which ae to be taken to achieve the objective necessitating decision making.
ii. Goal Direction
Organizations are goa-directed units, and therefore, any organizational process, including decision making, should be goal-directed to enable the organization to meet its objectives. Naturally, the value of a decision and the associated action is related to the dispatch with which the goal is achieved. While the value of a decision is dependent on the attainment of a given goal or set of goals, such attainment is a function of both the accuracy of the decision and its implementation. In evaluating a decision, then a distinction should be made between the effects of goal attainment brought about by the better decisions and those attainments arising out of execution.
iii. Efficiency in Implementation
An effective decision should provide the way in which it can be implemented. Therefore, decision making should take into account all the possible factors not only in terms of external context but also in internal context so that a decision can be implemented properly. Often, the results are obtained by proper implementation of proper decision. Therefore, a brilliant decision may fail if it is not suitable for implementation by the organisation. From the point of view, three characteristics of an effective decision have been identified:
(a) The viability of the decision
(b) The degree of congruency between prediction and the reality or viability of the solution as it occurs.
(c) The enthusiasm and skill with which the proposal is pursued-the attractiveness of the venture.