decision making

Decision making

Definition

It is defined as selection based on some criteria of one behavior alternative from 2 or more possible alternatives.

Characteristics of decision making

Process of choosing a course of action from   among alternatives

It is a human process involving application of intellectual abilities.

It may be negative.

Means to an end

Significance of decision making

Decision making needed for all management functions.

Types of decisions

Programmed and Non-programmed

Major and Minor

Policy and Operating

Routine and Strategic

Organizational and Personal

Individual and Group

Departmental, interdepartmental and Enterprise

Simon’s Decision making process

Identifying the problem( Intelligence phase)

The decision-making process begins when a manager identifies the real problem.

A problem identified and defined is a problem half solved.

What is Symptom?

Symptom indicate that something is wrong with an organization, but they don't identify root causes. 

What is Diagnosis?

Diagnosis is the process of identifying a disease from its symptoms.

Here we identify the root cause or real problem from the symptoms.

TABLE 1

Symptoms and Their Real Causes

Symptoms	Underlying Problem
Low profits and/or declining sales	Poor market research
High costs	Poor design process; poorly trained employees
Low morale	Lack of communication between management and subordinates
High employee turnover	Rate of pay too low; job design not suitable
High rate of absenteeism	Employees believe that they are not valued

While  diagnosing the real problem the manager should consider causes and find out whether they are controllable or uncontrollable.

Analyzing the Problem: Design phase

After defining the problem, the next step in the decision-making process is to analyze the problem in depth. This is necessary to classify the problem in order to know

Who must take the decision and

Who must be informed about the decision taken,

What information is needed and

From  where the information is available.

Developing alternate solutions or courses of action - Design phase

Reason for Developing alternate solutions is to make the best decision.

Example : if the management wants to fill up vacancy , alternatives are

Promote from within

Recruit from outside

Appoint a relative of previous employee

Selecting the best solution- Choice Phase

Selection is based on parameters like experience, experimentation and detailed investigation.

Consider the merits and demerits of each alternative solution and costs involved in each.

Converting the decision in to effective action – Implementation phase

Implement the decision.

We need co operation of subordinates

They should be convinced that decision is correct.

Follow up the decision

A decision is said to be good if it also holds good in the same situation at another time and place.

Manager should introduce a system of follow up.

Effective decision

An effective decision is one which is action oriented,goal direct5ed and provides efficiency in implementation.

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