Ankit Sehgal

Decision

is a choice between two or more alternatives. Decision Making is the selection of a course of action among the alternatives. Making decisions is central to management functions. Decision making involves some degree of uncertainty and risk due to reasons such as unclear information, conflict of views etc. Decisions vary in complexity , urgency and in other ways.

Defining the problem

Identify alternatives Evaluating alternatives

Applying criteria
Selecting alternative and implementation Monitoring and revising

 Problem

is a discrepancy in the existing and the desired state. One of the most difficult steps in the process, often attention is given to symptom rather than source of problem. Requires a great deal of skill and insight to find the actual problem.

 Involves

defining the possible alternatives that could resolve the problem. Best alternative is identified for evaluation and selected for action. If good alternatives are missed, decision is poor. An alternative could be a completely new approach. New and innovative ideas are preferred.

 Advantages

and disadvantages of each alternative are identified. Basis of criteria for evaluating alternatives could be economical, practical ,time consuming etc. Weak alternatives are eliminated. Mathematical techniques that could be used to assess the alternatives are Game theory, linear programming and risk analysis etc. Problem needs to precisely defined for using the above techniques.

Prioritizing With multiple criteria ,selection of an alternative becomes difficult. Assign weights to each criteria. Variables that are generally balanced are time, cost, risk, quality and adequacy of performance. Satisficing: Searching for and choosing an acceptable, or satisfactory response to problems and opportunities, rather than trying to make the best decision. Benefits of satisficing is saves time and money and risk is best solution is not known.

 Choosing

the best alternative. Putting the decision into action.

 Monitoring

the outcome as desired. In case of deviation review the steps to trace the root cause. Reference guidelines can be used at each step.

Decision making is a human endeavor. Requires support and cooperation of others. Person making the decisions should have strong diagnostic skills and good business judgement ,has the ability to understand the problem. Two important qualities a decision maker should have: Ability, Willingness Ability: Skills and knowledge. If managers lack in experience best ideas could not be brought forth and vital information is lost. Willingness: Motives of the persons involved, personal motives distort the findings and affect the analysis.

 People

have different styles of thinking which might be incompatible with each other and makes it difficult to come to a consensus while working as a team to resolve a problem.

 Who

all should be involved and at what point of time while making the decision. People who have knowledge and skills to solve the problem should be included. Experienced people should be brought in. Depending on the circumstances decision maker should include the key people who would help in implementing the course of action chosen.

 Classes
1. 2.

of Decisions Rule based: That follow a certain set of guidelines to arrive at the decision. Analytical based: Base decision on objective, rational data ,use the information gathered to arrive at the decision. Analytical decision can be classified as Repetitive and Distinctive.

 Decision

making is like a black box. Decision making paradigms could be based on rational, organizational process or political elements. All the paradigms operate in parallel. Each paradigm require different analytical emphasis.