Q1. Explain Decision Making Process and various types of Decision with examples?

Q2. Take any International Country of your choice and list down their Social, Cultural,
Lifestyle, Business Etiquettes and Trade Practices in detail?

A1.

DECISION-MAKING PROCESS:

Decision-making process is a six step process. The stages can be summarized as: (1) identifying
and diagnosing the problem, (2) generating alternative solutions, (3) evaluating alternatives, (4)
choosing the best alternative, (5) implementing the decisions, and (6) evaluating the results.

Identifying and diagnosing the problem

The first stage of decision-making is identifying and diagnosing a problem or
opportunity. An opportunity is a special type of problem that required committing
resources in order to improve company performance. A problem occurs when
performance is below expected or desired levels of performance. Typical problems
include:

• A high level of employee turnover.

• A reduction in firm profits.
• Unacceptable levels of “shrinkage: in store (employee theft).
• Low quality finished goods.
• An increase in workplace injuries.
• The invention of a new technology that would increase the productivity of the
workforce.

Once a problem has been recognized, the decision maker begins to look for causes of the
problem. This requires gathering information, exploring possible causes, eliminating as
many causes as possible, then focusing on the most probable cause, for example, A
manager who observes a high level of employee turnover first gathers information to
diagnose the problem and then attempts to understand why the turnover is occurring.
Some positive causes of turnover are job dissatisfaction with unchallenging and
repetitive work, below market pay rates, job stress, opportunities for better jobs in the
labor market, and conflicts between work and family obligations. It is important to fully
diagnose the problem before attempting to solve it. If the real manager assumes that it
was caused by inadequate compensation and raised employee pay as a solution, the
manager may not have solved the problem.

Generating alternative solutions

The second step is to generate possible solutions to the problem based on the perceived
causes. Some problems can be solved using programmed solutions, when there are
ready-made answers. Novel situations require non-programmed decisions because there
are no policies or procedures available to provide direction.
In the case of non-programmed decision making, it is important to come up with creative
alternative solutions and to suspend judgment of their worth until all possible
alternatives have been developed. If solutions are evaluated too soon during the second
stage of decision making, creativity can be stifled, resulting in lower-quality solutions.
Many companies use groups to generate solutions for non-programmed decisions
because they provide a greater diversely of opinions and more innovative solutions than
do people working individually. Consequently, group decision-making is often used to
develop continuous improvements in customer services to generate novel solutions to
customer needs.

Evaluating Alternatives

The third stage required the decision maker to examine the alternative solutions using a
set of decision criteria. The decision criteria should be related to the performance goals
of the organization and its subunits and can include costs, profits, timeliness, whether the
decision will work, and fairness.
A practical way to apply decision criteria is to consider quality and acceptance. Decision
quality is based on such facts as costs, revenues, and product design specifications. For
example, a technical engineering problem can be solved by gathering data and using
mathematical techniques. Decision acceptance is based on people’s feelings. Decision
acceptance happens when people who are affected by a decision agree with what is to be
done.
Decision can be classified by how important quality and acceptance are to their
effectiveness. Some technical decisions require a high degree of quality but low
acceptance, since people may be indifferent to the outcome. Buying raw materials at the
best price is an example of a decision where quality is important but acceptance is not.
An expert buyer of raw materials can make this decision. Other decisions place a high
emphasis on acceptance, while quality is not important. High acceptance, low quality
decisions involve fairness issues, such as, who will work the overtime hours? Who gets
the office with the window? The important point in such decisions is not who gets to
work overtime, but how people feel about the outcome and if they are willing to accept
it.
The most difficult decisions require high quality and high acceptance. The decision to
close an automobile assembly plant and lay off employees is an example. Decision
quality requires a reduction of labor costs, but acceptance requires the support of the
labor unions so that it will not call a strike to protest layoff, resulting in even greater
losses to the firm. The decision maker must find ways to balance conflicting goals in this
type of problem.

Choosing the Best Alternative

The next stage of decision-making is the selection of the best alternative by either
optimizing or satisfying. Optimizing involves selecting the best alternative form among
multiple criteria. For example, assume the decision criteria used to select an individual to
fill a vacancy consists of technical job knowledge , previous work experience, and
leadership skills. Further, assume that it will take six months to be able to generate a
large enough applicant pool to be able to find the best person to fill the job. The
optimizing solution is available when the benefits of reaching the solution outweigh the
costs. However, most of the time, the costs of keeping a job vacant for six months to be
able to generate a large enough applicant pool to be able to find best person to fill the
job. The optimizing solution is available when the benefits of reaching the solution
outweigh the costs. However, most of the time, the costs of keeping a job vacant for six
months to find the optimizing solution are not worth the effort. Therefore, the optimizing
approach would not be applied. Also, many important decisions must be made under
conditions of risk, which constraints the ability of the decision maker to optimize.
Satisfying involves selecting the first alternative solution that meets a minimum
criterion. Decision maker’s satisfice when complete information is not available or
gathering it is too expensive. Satisficing means that decision maker has found an
acceptable, if not optimal solution. For example, when selecting a new employee to fill a
job vacancy, many organizations make a job offer to the first person who meets the basic
selection criteria, rather than engaging in an extensive search for the best possible
candidate, which takes more time and money.

Implementing the decision

Putting the alternative solution into practice and making sure it works is the next step of
decision-making. Implementation requires the decision maker to put the solution into
practice. Decision making without implementation is simply and intellectual exercise.

Implementation is a critical step because it requires the support and cooperation of

executives, managers, and employees who may have different interests and goals. For
example, a manager’s decision to hire a minority group employee to fill a job vacancy
under a corporate diversity plant may not be effectively implemented if other employees
resent and avoid working with the employee. An important aspect of managing and
implementing diversity is to train employees to value diversity so they are supportive of
the plan’s goals. The omission of training could lead to poor implementation.

Several factors help make implementation successful. They include:

• Providing resources, such as staff, budgets, and office space, which will be needed
for successful implementation.
• Exercising leadership to persuade others to move the implementation forward.
• Developing communication and information systems that enable management to
know if the decision alternative is meeting its planned objectives.
• Considering ways to recognize and reward individuals and teas that successfully put
the decision alternatives into practice.

Evaluating the Results

The final stage in the decision-making process is to evaluate the results. Decision makers
gather information and try to learn if the implemented decision achieved its goals. The
availability of accurate and timely information and feedback permits the decision maker
to make a through evaluation and to determine whether modifications are needed.

Decision makers need to establish reasonable goals and benchmarks to make sound
judgments about the effectiveness of the decision. It is also important to allow enough
time for a decision to take effect. And executive collecting productivity data on a new
manufacturing plant would be foolish to immediately judge its effectiveness without
giving plant management time to eliminate the production bottlenecks that are typical in
new manufacturing plants. It would be better to suspend judgment until plant personnel
learn the best ways to operate the equipment and develop routines to work well together.

To Sum Up: Steps in Decision-Making process

Step Detail Example

1. Recognizing and defining Some stimulus indicates
the situation that a decision must be
made. The stimulus may be
positive or negative.
2. Identifying alternatives Both obvious and creative
alternatives are desired, in
general, the more
significant the decision, the
more alternatives should be
generated.
3. Evaluating alternatives Each alternative is
evaluated to determine its
feasibility, its
satisfactoriness, and its
consequences.
4. Selecting the best Consider all situational
alternative factors, and choose the
alternative best fit the
manager’s situation.
5. Implementing the chosen The chosen alternative is
alternative implementation into the
organization system.
6. Follow-up and evaluation At some time in the future,
the manager should
ascertain the extent to
which the alternative
chosen in step 4 and
implemented in step 5 has
worked.
A plant manager sees that
employee turnover has
increased by 5 per cent.
The plant manager can
increase wages, increase
benefits, or change hiring
standards.
Increasing benefits may not
be feasible. Increasing
wages and changing hiring
standards may satisfy all
conditions.
Changing hiring standards
will take and extended
period of time to cut
turnover, so increase wages.
The plant manager may
need permission of
corporate headquarters. The
human resource
development establishing a
new wage structure.
The plant manager notes
that, six months later,
turnover has dropped its
previous level.
TYPES OF DECISIONS:-

• Programmed and Non-programmed decisions

According to Herbert Simon, programmed decisions are concerned with relatively routine
and repetitive problems. Information on these problems is already available and can be
processed in a preplanned manner. Such decisions have short-term impact and are
relatively simple. They are, therefore made at lower levels of management. Decision
rules and procedures are established to save time and effort on such decisions, these
decisions require little thought and judgment. The decision-maker identifies the problem
and applied the predetermined solution. For example, if an employee is habitually a late
comer, he can easily be dealt with under the established procedure.

Non-programmed decisions deal with unique or unusual problems. Such novel or non-
repetitive problems cannot be tackled in a predetermined manner. There are no cut-and-
dried solutions or readymade answers for such problems. Therefore, high degree of
executive judgment and deliberation is required to solve them. Locations of plant,
takeover of a sick mill, opening of new branch, development of a new product are
examples of such decisions. These decisions are generally made by higher-level
managers.

Programmed and Non-programmed decisions

Programmed decisions Non-Programmed decisions

1. Deal with routine and repetitive
problems.
2. Highly certain conditions.
3. Solutions according to established
procedures and past experience.
4. Require little judgment and deliberation.
5. Usually made by lower level executives.
1. Unique and novel problems.
2. Highly Uncertain conditions.
3. Each situation is different and needs a
creative solution.
4. Involve much though and judgment.
5. Generally made at higher levels.

Proactive and Reactive Decisions

Managers tend to reach to changes in the business environment with either reactive or
proactive decisions. Proactive decisions are those made in anticipation of certain changes
in the external environment while, reactive decisions are those taken as a result of
changes happened in the environment. It may occur that a proactive decision was taken
for an imagined problem-this can result in a disastrous and unsuccessful decision,
similarly, if a reactive decision is taken late enough, it may result in the competitor
getting a stronger foothold in the market. Hence, the success of a proactive decision
requires accurate predictions of the future trends, while a successful reactive decision
requires very swift action in responses to the changes in the environment.
Basic and Routine Decisions

Routine decisions are of repetitive nature and they involve the application of familiar
principles to a situation. Basic decisions are those that require a good deal of deliberation,
new principles through conscious thought process.

Intuitive and Systematic Decisions

In systematic decisions a manger approached the problem to take a decision in a step by

step and analytical fashion. This type of decision involves disintegrating the problem into
smaller components and then addressing them logically step by step and in and integrated
manner. Managers taking the systematic decisions first make and action plan, then gather
information required to facilitate the decision making process. On the contrary, a
manager using the intuitive decision is more flexible and spontaneous and at times may
be creative. They deal with problems considering ‘hunches’ or ‘gut-feelings’ based on
experiences and spontaneous ideas. This approach may work best in situation of high
uncertainty, where facts available to take decisions are limited and insufficient.

Policy and Operative Decisions

Policy decisions are those that involve change in the procedure, planning and strategy of
the organization. Thus they affect the whole organization. They are normally taken by the
top management or the very senior executives of the organization, on the contrary
operating decisions are taken by the lower management in the process of executing policy
decisions. They are generally concerned with the routine type of work.
A2.

USA

Facts and Statistics

Location: North America, bordering both the North Atlantic Ocean and the North Pacific
Ocean, between Canada and Mexico
Capital: Washington, DC
Climate: mostly temperate, but tropical in Hawaii and Florida, arctic in Alaska, semiarid
in the great plains west of the Mississippi River, and arid in the Great Basin of the
southwest.
Population: 301,139,947 (July 2007 est.)
Ethnic Make-up: white 81.7%, black 12.9%, Asian 4.2%, Amerindian and Alaska native
1%, native Hawaiian and other Pacific islander 0.2% (2003 est.)
Religions: Protestant 52%, Roman Catholic 24%, Mormon 2%, Jewish 1%, Muslim 1%,
other 10%, none 10% (2002 est.)
Government: Constitution-based federal republic

Language in the USA

The United States does not have an official language, but English is spoken by about 82%
of the population as a native language. The variety of English spoken in the United States
is known as American English; together with Canadian English it makes up the group of
dialects known as North American English. Spanish is the second-most common
language in the country, spoken by almost 30 million people (or 12% of the population).

American Society and Culture

Diversity

America is ultimately a nation of immigrants and as a result is a cultural mish-mash in

every sense of the word. Not only is the country populated by people from foreign
countries but all Americans in one way or another trace their ancestry back to another
culture, whether Irish, German, Italian or Scottish. Looking around any major city one
will notice the ‘melting-pot’ that it is.

Informal and Friendly

Most people who come to the United States may already know a few things about the
people through TV. Although this is of course a skewed reality some of the stereotypes
are true, especially American friendliness and informality. People tend to not wait to be
introduced, will begin to speak with strangers as they stand in a queue, sit next to each
other at an event, etc. Visitors can often be surprised when people are so informal to the
point of being very direct or even rude.
Time is Money

The country that coined the phrase obviously lives the phrase. In America, time is a very
important commodity. People 'save' time and 'spend' time as if it were money in the bank.
Americans ascribe personality characteristics and values based on how people use time.
For example, people who are on-time are considered to be good people, reliable people
who others can count on.

The Family

The family unit is generally considered the nuclear family, and is typically small (with
exceptions among certain ethnic groups). Extended family relatives live in their own
homes, often at great distances from their children.

Individualism is prized, and this is reflected in the family unit. People are proud of their
individual accomplishments, initiative and success, and may, or may not, share those
sources of pride with their elders.

Meeting and Greeting

• Greetings are casual.

• A handshake, a smile, and a 'hello' are all that is needed.
• Smile!
• Use first names, and be sure to introduce everyone to each other.

Gift Giving Etiquette

• In general, Americans give gifts for birthdays, anniversaries and major holidays,
such as Christmas.
• A gift can be as simple as a card and personal note to something more elaborate
for a person with whom you are close.
• Gift giving is not an elaborate event, except at Christmas.
• When invited to someone's home for dinner, it is polite to bring a small box of
good chocolates, a bottle of wine, a potted plant or flowers for the hostess.
• Gifts are normally opened when received.

Dining Etiquette

• Americans socialize in their homes and ‘backyards’, in restaurants and in other

public places.
• It's not at all unusual for social events to be as casual as a backyard barbecue or a
picnic in the park.
• Arrive on time if invited for dinner; no more than 10 minutes later than invited to
a small gathering. If it is a large party, it is acceptable to arrive up to 30 minutes
later than invited.
• Table manners are more relaxed in the U.S. than in many other countries.
 • The fork is held in the right hand and is used for eating. The fork is held tines
down. The knife is used to cut or spread something. To use the knife, the fork is
switched to the left hand. To continue eating, the fork is switched back to the right
hand.
• If you have not finished eating, cross your knife and fork on your plate with the
fork over the knife. Indicate you have finished eating by laying your knife and
fork parallel across the right side of your plate.
• If you are more comfortable eating in the Continental manner, go ahead. It will
not offend anyone.
• Feel free to refuse specific foods or drinks without offering an explanation.
• Many foods are eaten by hand.
• Food is often served family-style, which means that it is in large serving dishes
and passed around the table for everyone to serve themselves.
• Do not begin eating until the hostess starts or says to begin.
• Remain standing until invited to sit down.
• Do not rest your elbows on the table.
• Put your napkin in your lap as soon as you sit down.
• Leave a small amount of food on your plate when you have finished eating.

Business Dress

• What is considered appropriate business attire varies by geographic region, day of

the week and industry.
• In general, people in the East dress more formally, while people in the West are
known for being a bit more casual.
• Executives usually dress formally regardless of which part of the country they are
in.
• Casual Friday is common in many companies. High technology companies often
wear casual clothes every day.
• For an initial meeting, dressing conservatively is always in good taste. Women
can wear business suits, dresses or pantsuits. Men should wear a business suit
unless you know the firm to be quite casual.

Greetings

• The hand shake is the common greeting.

• Handshakes are firm, brief and confident.
• Maintain eye contact during the greeting.
• In most situations, you can begin calling people by their first names.
• Most people will insist that you call them by their nickname, if they have one.
• In formal circumstances, you may want to use titles and surnames as a courtesy
until you are invited to move to a first name basis, which will happen quickly.
• Business cards are exchanged without formal ritual.
• It is quite common for the recipient to put your card in their wallet, which may
then go in the back pocket of their trousers. This is not an insult.
Communication Styles

Americans are direct. They value logic and linear thinking and expect people to speak
clearly and in a straightforward manner. To them if you don’t “tell it how it is” you
simply waste time, and time is money. If you are from a culture that is more subtle in
communication style, try not to be insulted by the directness. Try to get to your point
more quickly and don’t be afraid to be more direct and honest than you are used to.
Americans will use the telephone to conduct business that would require a face-to-face
meeting in most other countries. They do not insist upon seeing or getting to know the
people with whom they do business.

Business Meetings

Arrive on time for meetings since time and punctuality are so important to Americans. In
the Northeast and Midwest, people are extremely punctual and view it as a sign of
disrespect for someone to be late for a meeting or appointment. In the Southern and
Western states, people may be a little more relaxed, but to be safe, always arrive on time,
although you may have to wait a little before your meeting begins.

Meetings may appear relaxed, but they are taken quite seriously. If there is an agenda, it
will be followed. At the conclusion of the meeting, there will be a summary of what was
decided, a list of who will implement which facets and a list of the next steps to be taken
and by whom. If you make a presentation, it should be direct and to the point. Visual aids
should further enhance your case. Use statistics to back up your claims, since Americans
are impressed by hard data and evidence.

With the emphasis on controlling time, business is conducted rapidly. Expect very little
small talk before getting down to business. It is common to attempt to reach an oral
agreement at the first meeting. The emphasis is on getting a contract signed rather than
building a relationship. The relationship may develop once the first contract has been
signed.

Trade Practice in USA

The United States believes in a system of open trade subject to the rule of law. Since World War
II, American presidents have argued that engagement in world trade offers American producers
access to large foreign markets and gives American consumers a wider choice of products to buy.
More recently, America's leaders have noted that competition from foreign producers also helps
keep prices down for numerous goods, thereby reducing pressures from inflation.

Americans contend that free trade benefits other nations as well. Economists have long argued
that trade allows nations to concentrate on producing the goods and services they can make most
efficiently -- thereby increasing the overall productive capacity of the entire community of
nations. What's more, Americans are convinced that trade promotes economic growth, social
stability, and democracy in individual countries and that it advances world prosperity, the rule of
law, and peace in international relations.
An open trading system requires that countries allow fair and nondiscriminatory access to each
other's markets. To that end, the United States is willing to grant countries favorable access to its
markets if they reciprocate by reducing their own trade barriers, either as part of multilateral or
bilateral agreements. While efforts to liberalize trade traditionally focused on reducing tariffs and
certain non tariff barriers to trade, in recent years they have come to include other matters as well.
Americans argue, for instance, that every nation's trade laws and practices should be transparent
-- that is, everybody should know the rules and have an equal chance to compete. The United
States and members of the Organization for Economic Cooperation and Development (OECD)
took a step toward greater transparency in the 1990s by agreeing to outlaw the practice of bribing
foreign government officials to gain a trade advantage.

The United States also frequently urges foreign countries to deregulate their industries and to take
steps to ensure that remaining regulations are transparent, do not discriminate against foreign
companies, and are consistent with international practices. American interest in deregulation
arises in part out of concern that some countries may use regulation as an indirect tool to keep
exports from entering their markets.