Scribd
Upload
1 views

Module 1Decision making

Uploaded by

shruti
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
1 views

Module 1Decision making

Uploaded by

shruti
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 6

DECISION-MAKING

• Decision-making is an essential part of • The decision-making has the following


modern management. Whatever a factors.
manager does he does by making • (1) Decision-making implies that there are
decisions. A manager makes hundreds of various alternatives and the most
decisions consciously or subconsciously desirable alternative is chosen to solve
every day. Decisions are made by the the problem.
managers and actions are taken by • (2) Existence of alternatives suggests that
others. Major decisions are taken the decision-maker has freedom to
carefully and consciously by the choose an alternative of his liking.
application of human judgment and
experience where as minor decisions are • (3) Decision-making like any other
made almost subconsciously using rules. managerial process is goal oriented. It
Decision-making permeates through all implies that the decision maker attempts
managerial functions namely planning, to achieve some results through decision
organizing, staffing, directing and control. making.
• Types of Decisions
• Programmed and non-programmed decisions: Programmed decisions are
those that are made in accordance to policy, procedure and rules. These
decisions are routine and repetitive and programmed decision are
relatively easy to make. For example determining salary payment decisions.
In case of non-programmed decision there are no clear cut rules for
handling the problem, each manager may bring his own personal
beliefs, attitudes and judgments to bear on the decision, it is possible
for two managers to arrive at distinctly different solutions to the same
problem.
• Major and minor decisions: The decisions which have their impact for
long-period or which have impact on other departments are known as
major decision. On the other hand decisions which does not have long
term effect or affecting one department are known as minor decisions,
diversification of existing product lines, adopting new technology are the
major decisions.
• Simple and complex decisions: If very few variables are to be
considered for solving a problem the decision is sample. If the
variables are many, then it is a complex decision.
• Strategic and tactical or operational decisions: Strategic decision is a
major choice of actions concerning allocation of resources and
contribution to the achievement of organizational objectives.
Strategic decisions are major and non-programmed decisions having
long term impact.
• Individual and group decisions: Decision may be taken either by an
individual or group.
Decision Making Process: Steps in Rational
Decision Making
• (1) Recognizing the problem.
• (2) Deciding priorities among the problems.
• (3) Diagnosing the problem.
• (4) Developing alternative solutions or courses of activities.
• (5) Evaluating alternatives.
• (6) Converting the decision into effective action and follow up of
action.
• A problem is said to exist;
• (a) When there is deviation from past experience. For example the present
year’s sales are lower than previous year, the expenses are more than
previous years etc.,
• (b) When there is deviation from plan. For example sales are lower than
anticipated, expenses are more than expected etc.,
• (c) When competitors outperform. For example other companies
manufacture the goods of same quality at lower costs.
• (d) When people bring problems to the manager, For example workers may
complain about poor ventilation.
• (2) Deciding priorities among problems: A manager might have identified
a number of problems. All these problems vary in their importance. He
may find that some of the problems are such that they can be solved by
their subordinates because they are closest to them. All such problems
should be passed on to them. Some problems may need information
available only at higher level or affecting other departments. Such
problems are referred to higher level managers.
• (3) Diagnosing the problems: Symptoms of the problem that are
observed by the manager may some times mislead him.
• (4) Developing alternative solutions or courses of action: decision
maker must identify various alternatives available in order to get most
satisfactory result of a decision.
• (5) Measuring and comparing consequences of the alternative
solution: Once various alternatives are developed, the next step is to
measure and compare their consequences of alternatives using
quality and acceptability.
• (6) Converting the decision into effective action and follow up of
action: This step involves communication of decisions to the
employees. Decision must be communicated in clear and
unambiguous terms.

You might also like