DECISION MAKING

Chapter 5

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5.

DECESION MAKING
(i) (ii) (iii) Define Decision Making ? Define Decision Making is the Primary task of the Manager ? Discuss the Steps involved in the Decision Making Process

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Define Decision Making ?

Definition of Decision Making
According to the Oxford Advanced Learners Dictionary the term decision making means - the process of deciding about something important, especially in a group of people or in an organization. Trewatha & Newport defines decision making process as follows:, Decision-making involves the selection of a course of action from among two or more possible alternatives in order to arrive at a solution for a given problem. As evidenced by the foregone definitions, decision making process is a consultative affair done by a comity of professionals to drive better functioning of any organization. Thereby, it is a continuous and dynamic activity that pervades all other activities pertaining to the organization. Since it is an ongoing activity, decision making process plays vital importance in the functioning of an organization. Since intellectual minds are involved in the process of decision making, it requires solid scientific knowledge coupled with skills and experience in addition to mental maturity. Further, decision making process can be regarded as check and balance system that keeps the organisation growing both in vertical and linear directions. It means that decision making process seeks a goal. The goals are pre-set business objectives, company missions and its vision. To achieve these goals, company may face lot of obstacles in administrative, operational, marketing wings and operational domains. Such problems are sorted out through comprehensive decision making process. No decision comes as end in itself, since in may evolve new problems to solve. When one problem is solved another arises and so on, such that decision making process, as said earlier, is a continuous and dynamic. A lot of time is consumed while decisions are taken. In a management setting, decision cannot be taken abruptly. It should follow the steps such as 1. 2. 3. 4. 5. 6. Defining the problem Gathering information and collecting data Developing and weighing the options Choosing best possible option Plan and execute Take follow up action

Decision-Making Stages Developed by B. Aubrey Fisher, there are four stages that should be involved in all group decision making. These stages, or sometimes called phases, are important for the decision-making process to begin Orientation stage- This phase is where members meet for the first time and start to get to know each other. Conflict stage- Once group members become familiar with each other, disputes, little fights and arguments occur. Group members eventually work it out. Emergence stage- The group begins to clear up vague in opinions is talked about. Reinforcement stage- Members finally make a decision, while justifying themselves that it was the right decision

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Define Decision Making is the Primary Task of the Manager ?

Decision making is part of life in everybody's day to day life. For managers, decision making is one of the primary tasks. Management comprises of the following tasks : POSDCORB - Planning, Organizing, Staffing, Directing, Co-ordinating, Reporting and Budgeting. Management is a dynamic process. In very process, the decision of a manager has the impact on the result. Managemnet is a social organ, the decision by the manager affects the society as a whole. A manager needs to take decision on so many circumstances like under certainity and uncertainity. Every decision he makes has the consequences on the development of the company.

Decision making is part of life in everybody's day to day life. For managers, decision making is one of the primary tasks.

Management comprises of the following tasks :

POSDCORB - Planning, Organizing, Staffing, Directing, Co-ordinating, Reporting and Budgeting.

Management is a dynamic process. In very process, the decision of a manager has the impact on the result.

Managemnet is a social organ, the decision by the manager affects the society as
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whole.

A manager needs to take decision on so many circumstances like under certainity and uncertainity. Every decision he makes has the consequences on the development of the company.

Any organization, whether new or old, whether small or big need to run smoothly and achieve the goals and objectives which it has set forth. For this they had developed and implemented their own management concepts. There are basically four management concepts that allow any organization to handle the tactical, planned and set decisions. The four basic functions of the management are just to have a controlled plan over the preventive measure.

The four functions of management are:

The

base

function

is

to:

Plan

It is the foundation area of management. It is the base upon which the all the areas of management should be built. Planning requires administration to assess; where the company is presently set, and where it would be in the upcoming. From there an appropriate course of action is determined and implemented to attain the companys goals and objectives Planning is unending course of action. There may be sudden strategies where companies have to face. Sometimes they are uncontrollable. You can say that they are external factors that constantly affect a company both optimistically and pessimistically. Depending on the conditions, a company may have to alter its course of action in accomplishing certain goals. This kind of preparation, arrangement is known as strategic planning. In strategic planning, management analyzes inside and outside factors that may affect the company and so objectives and goals. Here they should have a study of strengths and weaknesses, opportunities and threats. For management to do this efficiently, it has to be very practical The subsequent and function is to: ample. Organize
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The second function of the management is getting prepared, getting organized. Management must organize all its resources well before in hand to put into practice the course of action to decide that has been planned in the base function. Through this process, management will now determine the inside directorial configuration; establish and maintain relationships, and also assign required resources. While determining the inside directorial configuration, management ought to look at the different divisions or departments. They also see to the harmonization of staff, and try to find out the best way to handle the important tasks and expenditure of information within the company. Management determines the division of work according to its need. It also has to decide for suitable departments The to third hand over function authority is and to: responsibilities. Direct

Directing is the third function of the management. Working under this function helps the management to control and supervise the actions of the staff. This helps them to assist the staff in achieving the companys goals and also accomplishing their personal or career goals which can be powered by motivation, communication, department dynamics, and department leadership. Employees those which are highly provoked generally surpass in their job performance and also play important role in achieving the companys goal. And here lies the reason why managers focus on motivating their employees. They come about with prize and incentive programs based on job performance and geared in the direction of the employees requirements. It is very important to maintain a productive working environment, building positive interpersonal relationships, and problem solving. And this can be done only with Effective communication. Understanding the communication process and working on area that need improvement, help managers to become more effective communicators. The finest technique of finding the areas that requires improvement is to ask themselves and others at regular intervals, how well they are doing. This leads to better relationship and helps the managers for better directing plans.

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The

final

function

is

to:

Control

Control, the last of four functions of management, includes establishing performance standards which are of course based on the companys objectives. It also involves evaluating and reporting of actual job performance. When these points are studied by the management then it is necessary to compare both the things. This study on comparision of both decides further corrective and preventive actions. In an effort of solving performance problems, management should higher standards. They should straightforwardly speak to the employee or department having problem. On the contrary, if there are inadequate resources or disallow other external factors standards from being attained, management had to lower their standards as per requirement. The controlling processes as in comparison with other three, is unending process or say continuous process. With this management can make out any probable problems. It helps them in taking necessary preventive measures against the consequences. Management can also recognize any further developing problems that need corrective actions. Effective and efficient management leads to success, the success where it attains the objectives and goals of the organizations. Of course for achieving the ultimate goal and aim management need to work creatively in problem solving in all the four functions. Management not only has to see the needs of accomplishing the goals but also has to look in to the process that their way is feasible for the company.
Decision making is a primary task of a manager - comment The managers duty is to communicate the overall vision of the organizationand make sure the right people are in place to get it done, the job of the manager is to make sure it gets done; Decision making is a very small component of getting things done, so decision making is not a primary task. [2]R Explanation The word manager means, "One who handles, controls, or directs". During the course of work problems arise. Many of these problems are easily handled byindividual team members. But when they cant solve them the manager must be able to step in and solve the problem.Sometimes there are multiple solutions. A good manager possesses an analytical mind capable of troubleshooting a situation and coming up with the bestsolution available. If that manager is creative they will be able to develop more solutions than those obviously apparent. This does not discount the ability to foresee potential problems and head them off. Sometimes there are NO good solutions. A good manager confidently does whats necessary to keep his team a float. They make difficult decisions that they may not like but will ultimately be for the best.

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Discuss the Stpes involved in the Decision Making Process ?

How to Make a Decision in Six Steps Defining the Problem: The first step towards a decision making process is to define the problem. Obviously, there would be no need to make a decision without having a problem. So, the first thing one has to do is to state the underlying problem that has to be solved. You also have to clearly state the outcome or goal that you desire after you have made the decision. This is a good way to start, because stating your goals would help you in clarifying your thoughts. Develop Alternatives: The situation of making a decision arises because there are many alternatives available for it. Hence, the next step after defining the main problem would be to state out the alternatives available for that particular situation. Here, you do not have to restrict yourself to think about the very obvious options; rather you can use your creative skills and come out with alternatives that may look a little irrelevant. This is important because sometimes solutions can come out from these out-of-the-box ideas. You would also have to do adequate research to come up with the necessary facts that would aid in solving the problem. Evaluate the Alternatives: This can be said to be the one of the most important stages of the decision making process. This is the stage where you have to analyze each alternative you have come up with. You have to find out the advantages and disadvantages of each option. This can be done as per the research you have done on that particular alternative. At this stage, you can also filter out the options that you think are impossible or do not serve your purpose. Rating each option with a numerical digit would also help in the filtration process. Make the Decision: This is the stage where the hard work you have put in analyzing would lead to. The evaluation process would help you in looking at the available options clearly and you have to pick which you think is the most applicable. You can also club some of the alternatives to come out with a better solution instead of just picking out any one of them. Implement the Solution: The next obvious step after choosing an option would be implementing the solution. Just making the decision would not give the result one wants. Rather, you have to carry out on the decision you have made. This is a very crucial step because all the people involved in the implementation of a solution should know about the implications of making the decision. This is very essential for the decision to give successful results.
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Monitor your Solution: Just making the decision and implementing it is not the end of the decision making process, it is very important to monitor your decision regularly. At this stage, you have to keep a close eye on the progress of the solution taken and also whether it= has led to the results you expected.

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Types of Business Decisions 1. Programmed Decisions These are standard decisions which always follow the same routine. As such, they can be written down into a series of fixed steps which anyone can follow. They could even be written as computer program 2. Non-Programmed Decisions. These are non-standard and non-routine. Each decision is not quite the same as any previous decision. 3. Strategic Decisions. These affect the long-term direction of the business eg whether to take over Company A or Company B 4. Tactical Decisions. These are medium-term decisions about how to implement strategy eg what kind of marketing to have, or how many extra staff to recruit 5. Operational Decisions. These are short-term decisions (also called administrative decisions) about how to implement the tactics e.g. which firm to use to make deliveries.

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