DECISION MAKING

TOPICS

Definition
. Decision making is the mental processes of
selecting a course of action from a set of
alternatives.
When trying to make a gooddecision, aperson
mustweight the positives and negatives of each
option, and consider all the alternatives.
Foreffectivedecision making, a person must
beabletoforecast the outcome of each option as
well, and based on all theseitems, determine
which option is the best for that particular
situation.

Process of decision making

Process

1. Defining and Analysing the real problem

The manager should first find out what is the real problem. The
problem may be due to bad relations between management
and employees, decrease in sales, increase in cost, etc. After
finding out the true problem manager must analyse it carefully.
He should find out the cause and effect of the problem.

2. Developing Alternative Solutions

After defining and analysing the real problem, the manager

should develop (make) alternative (different) solutions for
solving the problem. Only realistic solutions should be
considered. Group participation and computers should be used
for developing alternative solutions.

Process
3. Evaluating the Alternative Solutions

The manager should carefully evaluate the merits and

demerits of each alternative solution. He should compare the
cost of each solution. He should compare the risks involved. He
should also compare the feasibility of each solution. He should
find out which solution will be accepted by the employees.

4. Selecting the best Solution

After evaluating all the solutions, the manager should select

the best solution. He should select a solution which is less
costly and less risky. He should select a solution which is most
feasible and which is accepted by the employees. In short, the
manager should select a solution which has the most merits
and least demerits. The best solution is called the "Decision".

Process
5. Implementing the Decision

After making the decision, the manager should implement it. That is,
he should put the decision into action. He should communicate the
decision to the employees. He should persuade the employees to
accept the decision. This can be done by involving them in the
decision making process. Then the manager should provide the
employees with all the resources, which are required for implementing
the decision. He should also motivate them to implement the decision.

6. Follow Up

After implementing the decision, the manager must do follow up. That
is, he must get the feedback about the decision. He should find out
whether the decision was effective or not. This is done by comparing
the decision with the action, finding out the deviations (differences)
and taking essential steps to remove these deviations. So, follow-up is
just like the control function. It helps to improve the quality of future
decisions.

Process

conclusion
Its useful to review how successful
the decision has been, and the
effectiveness of the
decision making process. Monitor
these by asking:

Concepts of
decision making

Making High Quality Decisions

Three decision making cornerstones
Framing the Decision Clearly
Understanding decision context
Identifying outcome-based goals
Selecting the Right Stakeholders
Identifying and involving decision
stakeholders
Balancing multiple stakeholder nee

Concepts of decision making

Understanding Decision Types

Intuitive decision making
Data-driven decision making
Assessing Decision Making Patterns
Recognizing personal decision making patterns and
tendencies
Managing the Decision Process
Actions required to successfully manage decisions
Group Decision Making
Challenges with group decision making
Optimizing group decision making

Need for decision making

A few institutions have recognised the importance of teaching their
decision makers processes that equip them to make decisions in a
variety of circumstances. The military and the medical profession are
key examples of this. This is because those with responsibility in these
professions are dealing with life and death decisions often made under
highly stressful and emotionally charged situations. In these careers,
where people are held accountable for such weighty choices it is no
surprise that a lot of thinking has gone into good decision making.

Decision making is also becoming of increasing importance to those

not in traditional leadership roles. Organisations are becoming less
hierarchical in structure and in todays fluid and fast moving work
place the best employees are those who can take the initiative,
make and act upon good decisions. Systems such as the SWOT
analysis are very useful in helping to shape decisions but there are
few full decision making processes that are available to individuals
and organisations.Therefore everyone can benefit from
understanding more about the way we make decisions and from
learning simple decision making processes

Types of decision making

Group decision making

Group decision-making(also
known as collaborativedecisionmaking) is a situation faced when
individuals collectively make a choice
from the alternatives before them.
Thedecisionis then no longer
attributable to any single individual
who is a member of thegroup

Individual decision making

Individuals have a tendency to think
and question before performing.
An individual generally makes
prompt decisions.
Individuals do not escape
responsibilities
Individual decision making saves
time, money and energy as
individuals make prompt and logical
decisions generally.

Organizational decision making and levels

There are three types of decision

making :
.strategic decision making
.operational decision making
.tactical decision making

Decision making
Decisions are made at different levels in an organisation's hierarchy:
Strategic decisions are long-term in their impact. They affect and
shape the direction of the whole business. They are generally made
by senior managers. The managers of the bakery need to take a
strategic decision about whether to remain in the cafe business. Longterm forecasts of business turnover set against likely market
conditions will help to determine if it should close the cafe business.
Tactical decisions help to implement the strategy. They are usually
made by middle management. For the cafe, a tactical decision would
be whether to open earlier in the morning or on Saturday to attract
new customers. Managers would want research data on likely
customer numbers to help them decide if opening hours should be
extended .
Operational decisions relate to the day-to-day running of the business.
They are mainly routine and may be taken by middle or junior
managers. For example, a simple operational decision for the cafe
would be whether to order more coffee for next week. Stock and sales
data will show when it needs to order more supplie

Decision making with reference to authority

Decision Making Authorityis the

ability of participants and the team
as a whole to make
keydecisionsregarding the project
outcomes and to have
thosedecisionsrespected and
upheld by the agencies they
represent as well as otherdecision
makingpartner