What are Organizational and Personal Decisions?
An organizational decision is when a manager makes any decision on behalf of the organization. Whereas, a personal decision is when a manager takes one that does not affect the company’s performance.
Let’s discuss individually, the organizational and personal decisions:
What is Organizational Decision?
An organizational decision can be defined as a decision that a manager makes in his official capacity considering the organization’s goals and objectives.
In such decisions, managers have to consider their official authority before coming to any final choice.
The organizational decision is also called a formal or official decision. In such decisions, managers make choices for the prosperity of the company.
They have to fulfill all the official procedures, systems, and formalities while making any choices.
Such decisions are delegative. The manager or decision maker defines line authority for such decisions and is implemented directly for organizational betterment.
And, when required they can be easily delegated to subordinate officials.
Some examples of organizational decisions include.
- Making new incentive plans.
- Job design.
- Transferring of employees.
- Decisions related to the promotion.
- Appointment of new staff.
- Allocation of resources, etc.
What is a Personal Decision?
Against organizational decisions, managers also make decisions in their capacity that have no impact on the regular performance of the organization is known as a personal decision.
The personal decision is informal. The decision-maker uses his skills, knowledge, and capacity to make decisions that are based on his interests, desires, and needs.
Such personal decisions can not be delegated to others. Managers themselves are responsible for the outcomes of such choices whether the outcome will be bad or good.
Such decisions only affect the decision maker’s personal life, not the organization’s life.
Examples of the personal decision include,
- Voluntary retirement from the service.
- Rejection of promotion.
- Refusing bonuses.
- Refusing offers to go abroad for higher education, etc.
Difference Between Organizational and Personal Decisions
Organizational decisions are formal or official decisions whereas personal decisions are informal or unofficial decisions.
The difference between organizational and personal decisions can be pointed out through the following bases.
Definition
Organizational decision refers to a decision that is taken within an official capacity and is implemented for organizational betterment. Organizational decisions have a direct impact on the performance of the organization.
Personal decision refers to a decision that is taken within the organization but with his/her i.e. decision maker’s capacity that does not affect the company’s regular activities.
Nature
The organizational decision is formal whereas the personal one is informal.
Impact
Organizational decisions directly affect the performance of the organization. When such decisions are right and implemented effectively the desired goals can be effectively achieved and vice versa.
Personal decisions do not affect the performance of the organization. Managers or employees might make several personal decisions during their working tenure but such choices do not impact the organization’s regular work.
Related: Individual and Group Decision
Delegation
The organizational decision can easily be delegated to other employees or officials according to time, situation, and necessity. This ensures continuity in the implementation of such decisions.
Personal decisions can not be delegated to others. The implementation of such a decision can also only be done by the decision maker.
Accountability
In organizational decisions, managers are accountable to the organization for these decisions.
They must justify their choices and actions to senior management, stakeholders, or the board of directors, as these decisions affect the company’s overall performance.
In personal decisions, the decision-maker is accountable only to themselves. The outcomes, whether positive or negative, impact only their personal life, not the organization’s operations.
Related: Types of Decision Making
Scope of Influence
In organizational decisions, these decisions have a broader impact, influencing the organization’s structure, operations, policies, or strategies. They can affect multiple departments, employees, or even the organization’s stakeholders.
In personal decisions, these decisions have a limited influence, primarily affecting the individual and, in rare cases, their immediate environment or close peers.
Resources Involved
Organizational decisions typically involve the utilization of organizational resources like funds, personnel, or technology. For example, decisions regarding project funding or resource allocation require company assets.
Personal Decisions do not utilize organizational resources. Instead, they rely on the individual’s personal resources, such as time, effort, or finances, as these decisions pertain only to personal matters.
Read More: Planning Methods with Examples
Similarities Between Personal and Organizational Decisions
Although there is a great difference between them, we can also point out some similarities between personal and organizational decisions based on the types of decisions they are.
Involvement of Decision-Making Process
Both types of decisions require identifying problems or objectives, analyzing alternatives, and selecting the most suitable course of action.
Whether it is personal or organizational, the decision-making process involves logical steps to ensure effectiveness.
Impact of Decision Maker’s Judgment
The effectiveness of both decisions depends on the decision-maker’s skills, judgment, and knowledge.
Poor decision-making can lead to undesirable outcomes in both contexts, while sound decisions ensure positive results.
Goal-Oriented
Both decisions are aimed at achieving a specific goal.
Organizational decisions focus on achieving company objectives, while personal decisions aim to fulfill individual desires or needs.
Consequences of Implementation
In both cases, the results of the decisions depend on their implementation. A well-thought-out plan or choice can fail without proper execution, whether in an organizational or personal context.
Read Next: Steps in Making Decision
Sajan Kushmi is a content writer with more than 4 years of experience. He holds BIM Degree. He write on the topics related to Management, Marketing, and Entrepreneurship.