There are many conversations (or is it chats now?) going on in the business world today.
- My request for paid leave has been approved. I will be off for two weeks next month ♡
- The Thanksgiving Day project that I spent two months preparing has been approved by the division manager. Now all we need is the president’s decision!
- I will ask the board of directors today to decide a capital investment of 100 million yen in the production line at the factory
The words „approval“ and „decision“ in these conversations may or may not seem to mean the same thing. The truth is that they clearly have different meanings, but how are they different?
Decisions Are Made by the Organization.
How are „decision“ and „approval“ explained in the dictionary?
１ To acknowledge that something is justified or true.
２ 2 To accept as good and allow. To receive the approval of the governor.
３ to recognize the status of a state, government, belligerent, etc. under international law. A country recognized by the United Nations.
In the business world, it is likely to be used in the sense of 1 or 2.
In approving a contract, the legal department head may approve it from a legal perspective (meaning 1), or the sales department head may approve a discount at their discretion (meaning 2).
To decide whether or not to accept a proposal submitted by a subordinate by a superior with authority. In this case, it means that the subordinate’s proposal is not accepted.
This explanation is exactly what it means to decide. （I can feel it in the atmosphere of the characters.)
In a very crude way, the act of approval is to say „You should do that!“ However, approval means that the decision to execute or not to execute is made as the will of the organization.
Approval does not mean that the decision has been made by the organization though, but that the decision of the organization is made when it is decided.
No, I’m making a decision by approval
But I think there are some organizations where the word „decision“ is not used. For example;
- My request for paid leave has been approved. I will take two weeks off next month.
In this example, the decision is made at the time of approval. In this case the word „approval“ is used, but if the supervisor, who has the authority to make the decision, approves the request then the decision has been made.
It seems to me that relatively minor matters such as paid leave, overtime, and estimates are often decided by the word „approval“.
Doesn’t approval mean anything to you?
Approval can be important when the person who has the authority makes the decision.
People in decision-making positions make many decisions every day. Do they really have the time to fully understand the content of all the drafts, or have the knowledge and experience to judge the merits of each draft? It is not always possible.
In this case you can rely on the approvals that were given before the draft reached you.
In order to make decisions quickly and accurately it can be effective to ask;
- Who approved it?
- What kind of comments are written in the approval?
Whether the act of approval is meaningful or not may depend on how much the approver is trusted by the decision maker and whether he or she can write an advisory comment upon approval.
In an organization, rules such as the Rules for Approval and the Rules for Division of Duties specify who has the authority to draft, approve and make decisions on each matter to be considered. The rules defined in this way are called decision rules.
Decision rules: authorities for drafting, approving, and decision making are defined for each item under consideration.
For example, Kyoto University’s „Regulations on Accounting Duties and Authorities“ defines the decision-making rules in the list of duties and authorities. The following chart is a part of it.
For example, if we look at the „Budget Matters“ section, in the item „Important matters concerning budget requests or applications“, you can see the following:
- Drafter: Department head
- Approvers: Assistant section chiefs, section chiefs, department heads, director in charge of finance
- Decision maker: President
In addition, for „Minor matters related to budget requests or applications“ the following can be seen:
- Drafter: department head
- Approver: Assistant section chief, section chief
- Decision maker: General Manager
You can see that the decision-making rule is that the President makes decisions on important matters and the General Manager makes decisions on minor matters.
Decision Rules and Workflow Systems
As you can see from the list of duties and authorities in the „Accounting Duties and Authorities Regulations“ of Kyoto University, the rules set forth in the regulations are very complicated. It takes a great deal of effort to apply these rules appropriately to each item under consideration and to ensure that approval decisions are made.
This is where a workflow system comes in. By using a workflow system you can set up the decision-making rules and automatically request approval or a decision from the appropriate authority.
With Questetra BPM Suite, a cloud-based Workflow provided by Questetra, you can automatically make a request for approval or a decision to an authorized person by drawing decision rules on a Workflow diagram.
In the figure above, we have drawn a workflow diagram of the decision rules for budget requests and applications in the list of duties and authorities on the left.
The list on the left shows that there are different decision makers for important and minor matters. The president is the decision maker for important matters, and the general manager is the decision maker for minor matters. One of the advantages of a workflow diagram is that it can absorb such differences and represent them in a single diagram.
This Workflow Diagram was drawn using Questetra BPM Suite, a Cloud-based Workflow. If you would like to try drawing this kind of Workflow Diagram please apply for a free trial.
A Workflow Diagram drawn in Questetra BPM Suite is more than just a diagram. With a little configuration you can create a drafting screen, an approval screen, and if you make a draft on that screen it will be approved or approval will be requested from the authorized person according to the flow drawn in the Workflow Diagram.
In addition, when important decisions are made a record of the approvals and decisions made according to the list of duties and authorities is required. Since such records are automatically saved, the time and effort required to respond to business audits is greatly reduced.
We have explained the difference between approval and decision. Approval can be an important factor for an authorized person to make a decision.
In addition, decision rules are often organized in a table, but it is easier to understand them if they are realized in a workflow diagram.
Why don’t you draw a workflow diagram for your business as well?
That’s all for today. Thanks for reading!