Management Notes

Reference Notes for Management

Decisions taken by an entrepreneur on behalf of his enterprise are known as ______________.

Decisions taken by an entrepreneur on behalf of his enterprise are known as ______________.


A. Organizational decisions.
B. Personal decisions.
C. Routine decisions.
D. Strategic decisions

The Correct Answer Is:

  • A. Organizational decisions.

Decisions taken by an entrepreneur on behalf of their enterprise are known as organizational decisions. These decisions encompass a wide range of choices and strategies that shape the direction and functioning of the business. Let’s delve into why the correct answer is organizational decisions and explain why the other options are not correct.

Why the Correct Answer is Organizational Decisions (Option A):

1. Definition of Organizational Decisions:

Organizational decisions are choices made by an entrepreneur or a management team to guide and manage the operations of a business. These decisions are fundamental to the structure, objectives, and overall success of the enterprise.

2. Entrepreneurial Responsibility:

Entrepreneurs are responsible for making key decisions that impact the organization they have founded or are leading. These decisions include matters related to the business’s mission, vision, goals, resource allocation, and operational strategies.

3. Strategic Importance:

Organizational decisions are often strategic in nature. Entrepreneurs must decide on the organization’s core values, the business model, market positioning, and other critical aspects that shape the company’s competitive advantage and market relevance.

4. Impact on the Enterprise:

Organizational decisions have a profound and lasting impact on the entire organization. They define the company’s culture, its approach to innovation, its response to market changes, and its overall performance. These decisions are, therefore, central to the enterprise’s success.

Now, let’s explain why the other options are not correct one by one:

Option B: Personal Decisions

Entrepreneurs do make personal decisions, but these are separate from the decisions made on behalf of the enterprise. Personal decisions relate to an individual’s life choices, such as their daily routines, lifestyle, and personal goals.

They are not synonymous with the business decisions an entrepreneur makes for their company. Distinguishing between personal and organizational decisions is crucial for maintaining a clear boundary between an individual’s personal life and their role as a business leader.

Option C: Routine Decisions

Routine decisions typically refer to day-to-day operational choices that are necessary for the smooth functioning of a business. These may include decisions related to inventory management, staffing, or daily processes.

While entrepreneurs are involved in making routine decisions, these are just a subset of the broader spectrum of decisions that shape the organization. The term “routine decisions” doesn’t adequately capture the strategic, long-term, and transformative choices that entrepreneurs often need to make to ensure the growth and success of their enterprise.

Option D: Strategic Decisions

While it is true that entrepreneurs make strategic decisions, this option doesn’t encompass the full scope of decisions made on behalf of the enterprise. Strategic decisions are a subset of organizational decisions. Organizational decisions encompass a wider range of choices, including strategic ones, but also extend to operational, financial, and structural decisions.

Entrepreneurs need to consider not only their company’s long-term strategies but also its day-to-day management, organizational structure, and overall objectives.

In summary, the correct answer is “organizational decisions” (Option A) because this term best encapsulates the comprehensive set of choices made by entrepreneurs to steer and manage their businesses. These decisions encompass everything from the company’s mission and values to its strategic goals and day-to-day operations.

While personal, routine, and strategic decisions all play a role in an entrepreneur’s life, they are distinct from the decisions made for the benefit of the organization. Understanding this distinction is crucial for effective entrepreneurship and business management.

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