Recognition Analyzing Evaluating Choosing Implementing

Generating
of the the the the best and Verifying
Alternatives
problems Problems Alternatives alternative the Decision
❖ The first step in the decision making process is recognizing the
problem

❖ What at times might appear to be the real problem might at best

be simply the symptoms of the problems.

❖ Nibbling at the fingers of the problem or treating only the

symptoms of the problem, working on the wrong problem are
wasteful efforts and are of premature decision making.

❖ Superficial disturbances can be misleading and fail to reveal

underlying difficulties. Management sees a clash of personalities
the real problem may will be poor organization structure.
❖ Management see a problem of manufacturing costs and start a
cost reduction drive, the real problem may well be poor
engineering design or poor sales planning.

❖ So apart from studying the symptoms, a manager may well try to

find out the limiting factors before defining the problem.

❖ The critical factor analysis helps in finding out the difference

between what is happening in a particular situation and what
should be happening.

❖ The critical factor determines the gap between the desired and
actual results.
❖ If a scooter is not operating because the spark plug needs
replacement, the spark plug is the strategic factor.

❖ After defining the problem, spark plug replacement, a new

situation will arise where the new limiting factor will be obtaining
the plug, or having money to buy the plug if it is available nearby
and so on.

❖ Proper emphasis on all relevant factors will greatly help in

defining the problem properly and it must be realized that
problem is half solved when it is properly defined.
❖ In this stage, the decision maker gathers facts and looks for
advice.

❖ He collects as many facts as he can and tries to separate facts

from beliefs, opinions and preconceived notions.

❖ Each items is carefully evaluated, it is relatively weighted, its

validity judged.

❖ Irrelevant data and trivia will be discarded.

❖ The whole exercise helps in ensuring adequate background

information and essential data relating to the problem defined.
❖ Earlier, of course, it is possible to gain complete knowledge
regarding the problem.

❖ Certain intangible factors always force the manager to base his

decisions on incomplete and coarse information.

❖ It is well worth remembering that ‘the best diagnostician is not

the man who can spot early, and correct right away his own
mistaken diagnosis’.

❖ Knowing the extent of gap which has forced him to guess will
help at least in crystallizing the problem correctly.
❖ Normally, a business problem can be solved in many ways. If
there is only one alternative, no decision is required. But in any
rational decision-making process, the manager should not jump
on to single proposal without considering all the alternatives.

❖ At this stage, the decision maker searches for existing

alternatives, modifies more reliable, easier to implement and
available. If these alternatives are found unsuitable, they can be
made useful by modification.

❖ Totally unique alternatives are costly and time consuming to

create and often difficult to implement operating within these
extremes (existing Vs. unique alternatives).
❖ A manager may involve others in this exercise in order to devise
possible courses of action.

❖ As pointed out by Koontz, the ability to develop alternatives is

often as important as making a right decision among alternatives.

❖ Ingenuity research and creative imagination are required to make

sure that the best alternatives are considered before a course of
action is selected.

❖ Sometimes taking no action would itself be sufficient. To take no

action is a decision fully as much as to take specific action.
❖ The search for alternatives calls for creative abilities on the part
of managers. It helps in focusing adequate attention before it is
finally resolved.

❖ Additionally, the availability of two or three good alternatives

enables managers to fully test the soundness of each and every
alternative before it is finally translated into practice.

❖ In the process of testing, if one decision were to fail, the next one
can be pressed into service without difficulty.
❖ The search for alternative is not an unending process. The entire
range of alternatives cannot be expressed in black and white,
there is a cutoff point. Once this point is reached, the decision
maker should weigh alternative solution against one another. The
problem effects of each alternative must be outlined.

❖ Unfortunately, the consequences are always not clear. To reduce

time and effort, the decision maker may well concentrate as
really important facts of these alternatives by applying the
‘critical factor analysis’. All pertinent facts must be collected.
❖ They must be classified and pros and cons must be considered
and the important facts must be distinguished from trivial facts.

❖ The basic purpose or evaluation should not be to find out one

magic solution.

❖ The attempt should be to limit the alternatives to a manageable

(two or three) and economically feasible number.

❖ Comparisons must be made on the basis of values, the desirable

and undesirable aspects in every alternative listed and the
conflicting values resolved in some satisfactory manner.

❖ This requires subjective judgement. Experience, sometimes, may

be the best teacher.
❖ In this phase, the decision maker evaluates each alternative by
judging it according to some criterion (profit, cost, product,
quality etc.).

❖ According to Druker, there are four criteria for picking the best
among the possible solutions.

❖ The risk:

❖ Economy of effort:

❖ Timings:

❖ Limitation of the Resources

The risk:
The manager has to weigh the risk of each course of action against
the expected gains. He must decide as to how much risk he can take
and find out the alternative that satisfies with this view point.

Economy of effort:

The alternative that will give the greatest output for the least input
in terms of material and human resources is obviously the best one
to be selected.
3. Timing:

If the situation has great urgency; the best alternative is one that
warns the organization about impending dangers. On the other
hand, if inconsistent effort is needed, a slow start that gathers
momentum may be preferable.

4. Limitation of Resource:

Physical, financial, and human resources impose a limitation on the

choice of selection of these, the most important resources whose
limitations have to be considered are the human beings who will
implement the decision. Their vision, skill, understanding and
competence, often determine how effectively the organizational
efforts are carried out.
❖ The final decision is a product of deliberation, evaluation and
thought. In some decisions, the manager’s reputation is at stake,
and he may risk antagonism, and misunderstanding.

❖ Normally to avoid such unpleasant situations, managers rely on

past experience. Routine problems are disposed off on the basis
of experience and unique problems like launching a new product
are solved through a process of experimentation.

❖ However, the time and expense involved in the process of

experimentation make it a prohibitive practice. In case of
important decisions, managers rely on the technique of research
and analysis.
The problem and its relationship with different variables are
expressed in mathematical terms and put to further analysis and
examination with the help of computer and data processing
machines, a conceptual frame-work is outlined for the problem
under Consideration.
❖ Decision implementation is as important as decision formulation.

❖ A manager’s decision is always a decision concerning what other

people should do.

❖ So to avoid problems in implementation, he must communicate

the decision, that is, he must indicate as to what change in
behaviour is expected, what action is expected, and so on.

❖ In addition, effective implementation depends on how people

react to it.

❖ Gaining acceptance requires participation by operating people.

The most appropriate stage for their involvement is that developing
alternative solutions to the problem. At that point, they can
contribute their ideas and suggestions.

❖ Decision implementation thus includes:

❖ Observing the decision as it becomes operative

❖ Modifying it when necessary

❖ Coaching the people who implement it and perfecting it

once it is in action.
The process of decision verifying is very important in the sense that
it helps in highlighting the deviations and assists in taking
rectification actions in time.
Narrow down your options

Determine how important a decision is and how much time it

deserves

Be as informed as possible

Avoid making decisions based on emotions

Consider the pros and cons

Narrow down your options

❖ The fewer options you have available to you, the less

overwhelmed you will feel when making a choice.

❖ For example, choosing between two different ideas to

implement is much easier than trying to choose between
10.

❖ When possible, eliminate unrealistic or impractical options

so that you only have to select from those with the most
potential.
Determine how important a decision is and how much time it
deserves

❖ Before you exert too much time on any one decision, rate
each decision on its importance and choose exactly how
much time you will spend on it.

❖ For example, decisions that hold little importance, such as

the brand of ink you should order for your office printers,
should not take up a full day of your time.

❖ However, more important decisions should receive ample

time.
Determine how important a decision is and how much time it
deserves

Choosing how much time you give each decision before you
begin the decision-making process can help ensure you spend
your time wisely and give priority to the decisions that really
matter.
Be as informed as possible

❖ The more research you do and information you have, the

better able you are to be able to make an informed
decision.

❖ Know what factors are involved in the decision and any

other information you need to feel comfortable and
knowledgeable when choosing.

❖ For example, if you are trying to decide between hiring one

of two employees, take the time to learn all you can about
each.
Be as informed as possible

❖ How much experience do they have?

❖ Where did they go to school and what was their major?

❖ What have their references said about their work?

You could also consider asking them to give you a sample of

their work so that you can compare the samples to each other
for a further understanding of their potential.
Avoid making decisions based on emotions

❖ Making decisions based on your emotions can lead to

impulsiveness and poor choices.

❖ If you are emotionally attached to an issue or decision that

must be made, refrain from making it until you can be
objective about the matter at hand.

❖ Look at the facts surrounding the decision rather than how

you feel about it and don’t be afraid to ask for additional
time (if possible) to ensure you are as clear-headed as
possible.
Consider the pros and cons

❖ Understanding both the benefits and the costs that can

arise from a decision can help you feel more secure and
prepared when you make one.

❖ Every decision has at least one pro and one con.

❖ For example, if you are trying to decide whether to

implement daily catered lunches for your office, a con
would likely be the cost of these lunches, while a pro would
be that it could boost company morale and employee
appreciation.
Ser Question Marks
1 Make 10 questions of your choice from Lesson 1 to 05
4.
2 Answer any five of them in short 05
Note: Don’t discuss with each other. Similarity may reduce your
score

Time : 30 Mins

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