Module 3: Planning

Lesson 6
Decision Making
Introduction:
In becoming an effective leader and manager, one particular important key skill in the workplace is decisionmaking. A good decision must always be created by the manager especially when dealing with uncertainty in the
environment of the organization, whether deciding in the hiring process, deciding on what objectives to prioritize or
even budgeting.

Objectives:
After this lesson, the students must be able to:
1. know the nature and types of decision-making;
2. formulate decision from several alternatives; and
3. evaluate the importance of making the right decisions in real life.

Subject Matter:
The Nature of Decision-Making
Every decision-making process creates an ultimate choice in an action or an opinion of choice. Thus,
decision-making is the intellectual processes of selecting the best option among several alternative scenarios or
choices. There are two types of decisions, the non-programmed and the programmed ones. The non-programmed
decision is a new and novel decision intended for a difficult, complex and infrequently occurring problem. The
programmed-decision is a decision that is solvable by using rules, policies or numerical computations for problems
that are repetitively happening. (Serrano, 2016)
Future is one of the concerns of decision. The conditions of certainty, conditions of risk and/or conditions
of uncertainty made it challenging when it comes to decision-making. Deciding under the conditions of certainty is
when managers have accurate and comprehensive information and identify precisely what the result of their decision
will be. Due to inadequate information, managers are usually faced with uncertainty. They can sometimes predict
the possible consequences of their decision but cannot warranty which specific outcome will really happen. On the
other hand, a risk is always associated with a decision when there is a possibility of an opposing outcome; or
perhaps the possibility of success is less than 100%, so losses may occur.
Because of the conflict that managers face, important decision is even more demanding. Conflict may be
defined as a differing pressure from diverse sources, happening on the level of psychological struggle or of clash
among individuals and/or groups. For example, during recruitment process, the human resource manager has to
choose from three promising job applicants only one, thus rejecting the other two. Only limited decisions are
deprived of conflict.
Importance of Decision-Making
Below are some importance of decision -making:
1. Execution of managerial function Decision is an essential element to perform any managerial function.
2. Dominance of decision making Decision-making is inescapable in a sense that decisions are prepared and
implemented in every managerial activity and in all functions of the organization. Decisions enable any kinds of
function to possible.

3. Appraisal of managerial performance Managerial performance can be assessed by decisions. It is assumed that
a manager is competent, talented and resourceful when most of his/her decisions are right. On the other hand, we
assume say that a manager is ineligible when the decision is erroneous.
4. Supportive in planning and policies No implementation of plans or policy would ever happen without decision
making.
5. Picking the top choices We consider decision-making as indispensable in every organization because there are a
lot of choices. Thus, the process of choosing the best option is decision-making.
6. Successful operation of business If the right and applicable decisions are prepared and implemented then the
organization is likely to sustain its presence in this competitive world of business.
7. Better utilization of resources Decision making also assists for realizing the objectives of the organization in
employing of accessible resources. These available resources include the 6Ms, which are Man, money, materials,
machines, methods, and markets.
8. Facing problems and challenges Resolving fresh problems and challenges is one role of decision making. In
getting to the bottom of problems, speedy and right decisions are beneficial.
9. Business Growth Successful operations of business, better utilization of resources and solving the problems and
challenges of the organization leads to quick business growth. On the other hand, losses and unhealthy industry can
be the result of wrong, slow or no decisions.
10. Attaining objectives
11. Escalates efficiency
12. Simplify Innovations
13. Motivates employees
The Decision-Making Process
Implementing decisions is managers role every time planning, organizing, staffing, leading and controlling his/her
team is concerned. The degree of success a manager has will be dependent on the effectiveness and quality of his/her
decisions. Below are the steps in the decision-making process.
1. Pinpoint the purpose of the decision The problem must be determined and must be explored thoroughly as to it
exact nature, the reason/s for solving it, the affected parties and the definite deadline for solving.
2. Information gathering much information is to be gathered by the decision maker as needed in relation to the
factors and stakeholders involved in the problem.
3. Principles for judging the option This is essential in building a clear standard benchmark for evaluating the
options, always considering the organizations goal and culture.
4. Brainstorm and analyze the different alternatives In generalizing, all ideas must be written beforehand. In
decision-making process, the roots of the problem and/or the priority of the causes is in utmost importance.
5. Evaluate the choices Every option has its positives and negatives that must be determined using ones own
judgement principles and standard benchmarks.
6. Pick the finest option
7. Implement the decision made
8. Assess the results The outcomes of the decision made must be evaluated. This is to control, monitor and correct
the decision made in accordance of the general objectives or vision.

Types of Decision-Making Styles in Management

Typically, different styles are being use by leaders when constructing important and vital management
decisions. Some factors that may influence the decision-making styles were: the availability of information and
alternatives, the significance of the issue at hand, the experience and skill set of the staff and the amount of risk that
the organization can tolerate. Thus, decision-making style is a leaders usual manner of handling social states of
affairs. On the other hand, embracing a single style for every decision is not always the right thing to do. An
effective manager can change styles depending on the difficulties of the scenario.
1. Decisive (one alternative, few information) Action, speed, efficiency and consistency is valued in this type of
decision making.
2. Flexible (many alternatives, few information) -emphasize adaptability but centers on speed is the nature of this
style of decision-making. They gather sufficient data enough to pick a decision which in any case can be rapidly
altered if necessary.
3. Hierarchic (one alternative, more information) The aim of this style is ultimate and stable decision. The process
is to gather a great deal of information and then make an analysis.
4. Integrative (many alternatives, more information) this type of decision makers collect great loads of data and
then come up with various ways of action. Alteration of the decision created may also occur in the future if
necessary.
Common Decision Barriers
Decision making is the most crucial job of a manager. The more high-stake decision, the more likelihood of failure.
Below are the most common barriers to avoid in decision-making:
1. Anchoring It is putting disproportionate weight to the first information received.
2. Status Quo it is keeping the things the same without any action.
3. Confirming evidence it is asking a valued co-worker to dispute against ones perspective, if new information at
hand still certifies the current viewpoint.
4. Illusion of control It is the false belief of people that they can manipulate events even if they have no power to
direct what will happen in the future.
5. Framing effects it is when managers are quick to phrase or present a problem as being comparable to problems
they have resolved before which results to loss of interest in exploring new courses of action.
6. Discount the future It is putting more weight on short-term costs and benefits compared to those of long-term.
7. Time pressures this is when the creation of business decisions takes too long which makes it irrelevant and
disastrous.
8. Social realities this is making decisions out of social interactions, bargaining and politicking to be agreeable to
conflicting parties.
Group Decision Making
Group decision making is a kind of participatory process in which several individuals collectively
examine problems or situations, think and assess options of actions, and choose from among the options a solution
or solutions. (Serrano 2016)
Advantages
1. Bigger and better source of information.

Disadvantages
1. A group member governs

2. More viewpoints and methods of solving problems

3. Scholarly motivation and creativity in crafting
solutions to problems.
4. Participants know the pros and cons of both chosen
and rejected alternatives.
5. Lead to higher degree of commitment to the decision
ensuring well implementation of it.

2. the result is more likely to be satisficing not

optimizing.
3. the decision is a groupthink in order to avoid
disagreement.
Groupthink This is a phenomenon in group decision
-making when members attempt for compromise to
shun from breaking up the positive team spirit.
4. Emergence of goal displacement instead of
discovering the best possible solution to the problem
Goal displacement This is a condition of the
surfacing of new but less important goal losing sight of
the original goal due to the attempt of winning a heated
disagreement via rational persuasion.

Below are different methods or procedure that can be used by groups:

1. Brainstorming this engages group members to orally suggest ideas or alternative course of action. When all of
the ideas have been taken, the group will then start the process of assessing the usefulness of the different
suggestions obtained.
2. Dialetical inquiry It center on making certain complete reflection of alternatives. The group is divided into
contrasting sides, which argues the advantages and disadvantages of anticipated solutions or decisions.
3. Nominal Group Technique - It is a structured decision making process in which group members are obligated to
create an all-inclusive list of their ideas or proposed options in a paper.
4. Delphi Technique the group decision-making process that can be used by decision-making groups when the
individual members are in different geographical locations. In the Delphi technique, each group member is requested
to autonomously supply ideas, input, and/or alternative solutions to the decision problem in consecutive stages.
(Serrano, 2016)

Bibliography
Angelita ong Camilar-Serrano, D. (2016). Principles of Organization and
Management. Manila: Unlimited Books Library Services & Publishing Inc.