DECISION

MAKING
Decision Making is a mindful human
process involving both individual and
social phenomenon based upon accurate
and value premises which concludes with
a choice of one behavioral activity from
among one or more alternatives with the
intention of moving toward some desired
state of affairs.
 TYPES OF DECISIONS


•Programmed Decisions: routine and

repetitive and are made within the
framework of organizational
policies.


•Non-Programmed Decisions:
various alternatives cannot be
decided in advance.
DECISION MAKING PROCESS:


 SPECIFIC OBJECTIVES
 IDENTIFICATION OF PROBLEMS
 SEARCH FOR ALTERNATIVES
 EVALUATION OF ALTERNATIVES
 CHOICE OF ALTERNATIVES
 ACTION
 RESULTS
DECISION MAKING PROCESS:


 SPECIFIC OBJECTIVES: Need for decision making

arises in order to achieve certain specific
objectives.
 IDENTIFICATION OF PROBLEMS:
 Diagnosis
 Analysis
 SEARCH FOR ALTERNATIVES:
 EVALUATION OF ALTERNATIVES:
 CHOICE OF ALTERNATIVES:
 Experience
 Experimentation
 Research and Analysis
 ACTION: Once the alternative is selected, it is
put into action.
 RESULTS: When the decision is put into action, it
brings certain results.
EFFECTIVE DECISION:


 Action Oriented:
 Decision toe be effective must specify
the various actions which are to be
taken to achieve, the objective
necessitating decision making.
 Goal Direction:
 Any organization process, including
decision making, should be goal-
directed to enable the organization to
meet its objectives.
 Efficiency in Implementation:
 An effective decision should provide the
way in which it can be implemented.
  INDIVIDUAL VS GROUP DECISION MAKING

Nature of Problem:
 If the policy guidelines regarding decision for

the problem at hand are provided,

individual decision making will result in
greater creativity, where the problem
requires expertise, group decision making is
suitable.
Time Availability:

 Group decision making is a time consuming

process.
Quality of Decision:

 Higher quality decisions.

Climate of Decision making:

 Supportive climate – group decision making

 Competitive climate – individual decision
 

TECHNIQUES FOR IMPROVING GROUP



DECISION MAKING
 BRAIN STORMING
 NOMINAL GROUP TECHNIQUE
 DELPHI TECHNIQUE
 CONSENSUS MAPPING

 Advantages and Disadvantages in DM
Positive Aspects of

Negative Aspects of


DM DM
 Pooling of Knowledge and Time-consuming and
Information Costly
 Satisfaction and Commitment Individual Domination
 Personnel Development Problem of Responsibility
 More Risk Taking Group Think
 Pooling of Knowledge and Information:
Since many individuals involved in group
decision making, more data and
information can be generated.

 Satisfaction and Commitment: Individual
satisfaction and commitment in group
decision-making are often better.

 Personnel Development: Group decision
making is a source of development of
individuals in the organization.

 More Risk Taking: Risk taking to be higher
in group decision making.
 Rationality in Decily Making:
 A decision may be called objectively rational if in
fact it is the correct behavior for maximizing
given values in a given situation.
 It is subjectively rational if it maximizes
attainment relative to the actual knowledge of
the subject.
 It is consciously rational to the degree that the
adjustment of means to ends is a conscious
process.
 It is deliberately rational to the degree that the
adjustment of means to ends has been
deliberately brought about by the individual or
organization.
 A decision is organizationally rational if it is
oriented to the organization’s goals;
 It is personally rational if it is oriented to the
  Limits on Rationality
 Decision Making Mechanism:
 Programmed – Fulfilled in practice
 Non-Programmed – Partially
ignored
 Human Factors in Decision Making: Personal
factors affect Decision Making
 Choice of an alternative according to personal
preference.
 Interpretation is personalized.
 Personal Value System
 Perception
 Political and Power Behavior (Judgment,
Bargaining, Analysis)
 Time Constraints


 Creativity and Decision Making

 Creative Thinking is the process of bringing a
problem before one’s mind clearly by
imaging, visualizing, guesswork, study, and
then originating an idea, concept,
realization, or picture along new or original
lines. It involves study and suggestion
rather than action.
 Stages in Creativity Process
§ Saturation: Thorough familiarity of
problem itself, its history, its
importance to other parts of
business.
§ Preparation: Decision Maker tries to
collect information relating to the
problem.
§ Incubation: During the process of
incubation, the mind will work
subconsciously to create certain
new ideas.
§ Illumination: flash of insight or a
sudden spontaneous solution.