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CMA Foundation · Fundamentals of Business Economics and Management · Decision-making - Types and Process

Which statement best describes decision-making as a managerial function?

Decision-making means choosing one course of action from two or more alternatives to achieve a specific objective. It is a selection process, not implementation, recording or motivation. Without alternatives there is no real choice, so the existence of options is the essential feature of a decision.

  1. AChoosing one course of action from two or more available alternatives to achieve an objectiveCorrect
  2. BCarrying out a plan that has already been chosen by top management
  3. CRecording past transactions of the business in the books of account
  4. DMotivating employees through financial incentives only

Explanation

Decision-making is the process of selecting the best course of action from available alternatives to reach a goal. Implementation of a plan, bookkeeping and motivation are different activities. A decision requires at least two alternatives, otherwise there is no choice.

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