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Decision Making in Management

A unit in business management. Especially Human resource

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53 views5 pages

Decision Making in Management

A unit in business management. Especially Human resource

Uploaded by

Anthony
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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DECISION MAKING IN MANAGEMENT

Management decision making is choosing a course of action after


considering different options to accomplish an organization's goals.
Management involves problem-solving, budgeting, coaching, planning,
organizing, staffing, controlling.
Good decision-making can help managers show their employees that
they value their work and have their best interests in mind. When a
manager takes the time to evaluate, analyze and explain decisions, they
also display thoughtfulness and trustworthiness.
Management decision making is a critical part of the management planning
function. Understanding the unique nature of managerial decisions requires
understanding the types of decisions and the context for making those
decisions
CATEGORIES

Decision making can be defined as selecting between alternative courses


of action. Management decision making concerns the choices faced by
managers within their duties in the organization. Making decisions is an
important aspect of planning. Decision making can also be classified into
three categories based on the level at which they occur.

 Strategic Decisions - These decisions establish the strategies and


objectives of the organization. These types of decisions generally
occur at the highest levels of organizational management.
 Tactical Decisions - Tactical decisions concern the tactics used to
accomplish the organizational objectives. Tactical decisions are
primarily made by middle and front-line managers.
 Operational Decisions - Operational decisions concern the methods
for carrying out the organizations delivery of value to customers.
Operational decisions are primarily made by middle and front-line
managers.
OTHER CATEGORIES(Discuss )
The types of decision making in an organization are as follows:
 Programmed And Non-Programmed Decisions
 Operational and Strategic Decisions

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 Organizational and Personal Decisions
 Major and Minor Decisions
 Individual and Group Decisions
 Tactical and Operational Decisions

DECISION MAKING PROCESS


Step 1: Identify the decision You realize that you need to make a decision.
Try to clearly dene the nature of the decision you must make. This first step
is very important.
2: Gather relevant information Collect some pertinent information before
you make your decision: what information is needed, the best sources of
information, and how to get it. This step involves both internal and external
“work.” Some information is internal: you’ll seek it through a process of self-
assessment. Other information is external: you’ll nd it online, in books, from
other people, and from other sources.
Step 3: Identify the alternatives As you collect information, you will probably
identify several possible paths of action, or alternatives. You can also use
your imagination and additional information to construct new alternatives. In
this step, you will list all possible and desirable alternatives
Step 4: Weigh the evidence Draw on your information and emotions to
imagine what it would be like if you carried out each of the alternatives to
the end. Evaluate whether the need identied in Step 1 would be met or
resolved through the use of each alternative. As you go through this di-cult
internal process, you’ll begin to favor certain alternatives: those that seem
to have a higher potential for reaching your goal. Finally, place the
alternatives in a priority order, based upon your own value system.
Step 5: Choose among alternatives Once you have weighed all the
evidence, you are ready to select the alternative that seems to be the best
one for you. You may even choose a combination of alternatives. Your
choice in Step 5 may very likely be the same or similar to the alternative
you placed at the top of your list at the end of Step 4.
Step 6: Take action You’re now ready to take some positive action by
beginning to implement the alternative you chose in Step 5.

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Step 7: Review your decision & its consequences In this nal step, consider
the results of your decision and evaluate whether or not it has resolved the
need you identied in Step 1. If the decision has not met the identied need,
you may want to repeat certain steps of the process to make a new
decision. For example, you might want to gather more detailed or
somewhat dierent information or explore additional alternatives.
TECHNIQUES OF DECISION MAKING
1.Brainstorming : combines a relaxed, informal approach to problem
solving with lateral thinking. It encourages people to come up with thoughts
and ideas that can, at first, seem a bit crazy. Some of these ideas can be
crafted into original, creative solutions to a problem, while others can spark
even more ideas. This helps to get people unstuck by "jolting" them out of
their normal ways of thinking.

Therefore, during brainstorming sessions, people should avoid criticizing or


rewarding ideas. You're trying to open up possibilities and break down
incorrect assumptions about the problem's limits. Judgment and analysis at
this stage stunts idea generation and limit creativity.

Evaluate ideas at the end of the session – this is the time to explore
solutions further, using conventional approaches.

2. Nominal (meaning in name only) group technique (NGT) is a structured


variation of a small-group discussion to reach consensus. NGT
gathers information by asking individuals to respond to questions posed by
a moderator, and then asking participants to prioritize the ideas or
suggestions of all group members.

3. The Delphi method: is a forecasting process framework based on the


results of multiple rounds of questionnaires sent to a panel of experts.
After each round of questionnaires, the experts are presented with an
aggregated summary of the last round, allowing each expert to adjust their
answers according to the group response. This process combines the
benefits of expert analysis with elements of the wisdom of crowds.

 The Delphi method is a process used to arrive at a group opinion or


decision by surveying a panel of experts.

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 Experts respond to several rounds of questionnaires, and the
responses are aggregated and shared with the group after each
round.
 The experts can adjust their answers each round, based on how they
interpret the “group response” provided to them.
 The ultimate result is meant to be a true consensus of what the
group thinks.
4. Linear programming (LP), also called linear optimization, is a method
to achieve the best outcome (such as maximum profit or lowest cost) in
a mathematical model whose requirements are represented by linear
relationships. Linear programming is a special case of mathematical
programming (also known as mathematical optimization…Linear
programming can be applied to various fields of study. It is widely used in
mathematics and, to a lesser extent, in business, economics, and some
engineering problems. Industries that use linear programming models
include transportation, energy, telecommunications, and manufacturing. It
has proven useful in modeling diverse types of problems
in planning, routing, scheduling, assignment, and design.

5. Cost-benefit analysis is a way to compare the costs and benefits of


an intervention, where both are expressed in monetary units. idea
icon. Both CBA and cost-effectiveness analysis (CEA) include health
outcomes.

 6Game theory is a theoretical framework for conceiving social


situations among competing players. In some respects, game theory
is the science of strategy, or at least the optimal decision-making of
independent and competing actors in a strategic setting. The
intention of game theory is to produce optimal decision-making of
independent and competing actors in a strategic setting.
 Using game theory, real-world scenarios for such situations as
pricing competition and product releases (and many more) can be
laid out and their outcomes predicted.

7. A decision tree is a flowchart-like structure in which each internal


node represents a "test" on an attribute (e.g. whether a coin flip comes
up heads or tails), each branch represents the outcome of the test, and
each leaf node represents a class label (decision taken after computing
all attributes). A decision tree is a very specific type of probability tree
that enables you to make a decision about some kind of process.
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For example, you might want to choose between manufacturing item A
or item B, or investing in choice 1, choice 2, or choice 3.

8.Voting is a method for a group, such as a meeting or an electorate, in


order to make a collective decision or express an opinion usually
following discussions, debates or election
campaigns. Democracies elect holders of high office by voting.
Residents of a place represented by an elected official are called
"constituents", and those constituents who cast a ballot for their chosen
candidate are called "voters". There are different systems for collecting
votes, but while many of the systems used in decision-making can also
be used as electoral systems, any which cater for proportional
representation can only be used in elections

DECISION THEORY

decision theory, in statistics, a set of quantitative methods for


reaching optimal decisions. A solvable decision problem must be
capable of being tightly formulated in terms of initial conditions and
choices or courses of action, with their consequences. Decision theory is
concerned with the reasoning underlying an agent's choices, whether
this is a mundane choice between taking the bus or getting a taxi, or a
more far-reaching choice about whether to pursue a demanding political
career

The first formal decision theory was developed by Blaise Pascal in


correspondence with Pierre Fermat about “the problem of the points,”
the problem of how to divide up the stakes of players involved in a game
if the game ends prematurely(1654).

Theories of DECISION MAKING

These theories are the rational model, the administrative model and
the political model of decision making.(Discuss with examples).

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