DECISION MAKING PROCESS

DECISION

“A choice from two or more alternatives”

DECISION MAKING

Decision-making is a key element of management because managers continually face decision in

• Planning
• Organizing
• Leading
• Controlling that effect the organization and its performance

ACCORDING OT BOVEE:-

“The process of reorganization problem generating and weighing alternative coming to a decision, Taking action and assessing the result

S.P ROBBINS:-

“The set of eight steps at includes identifying a problem, selecting an alternative and evaluating the decision’s effectiveness”

EXPLANATION

To solve a problem, or any thing keeping in view best interest of organization. In short decision making solve more problems of organization and also help in creation best decision

DECISION MAKING PROCESS

Problem

“A discrepancy between an existing and a desired state of affair “

CRITERIA

“Criteria that define what’s relevant in a decision”

IDENTIFYING THE PROBLEM

The first step is determining the problem. Problem means a discrepancy between present and proposed state of affair/. The manager who is the head of the department has to make the decision. First of all he must determine and identifying the desire roots of problem that problem could be solved toughly.

Furthermore, problem identification is not simple or in signification. Before something can be characterized as problem, manager have to be aware of the problem be under pressure to take action and have resources needed to take action.

IDENTIFICATION OF DECISION MAKING CRETIRA

In decision criteria, managers have to define what is relevant to the problem in decision such as

• Price
• Reliability
• Product
• Product model
• Guarantee & Warranty
• After sale service
• Useful life

Modern technological changes and where manager do not identify a particular criteria, is treated as irrelevant

ALLOCATION WEIGHTS TO CRITERIA

The factors of a criterion are not of equal importance. Therefore, we have to give them weights keeping in view their importance.

While purchasing computer we allocate weight to previous decision criteria.

CRITERIA WEIGHTS

Reliability 10

Screen size 8

Warranty 5

Weight 5

Price 4

Screen type 3

We allocate any other number for weights but according to their importance in decision making. In this the highest weight is 10 point.

DEVELOPING ALTERNATIVES

In this step we develop a list of all alternatives that can solve our problem. In this step evaluation of alternatives is not made.

For example, the problem is we have to purchase perfume soap then various alternative soap like Lux, Breeze, and Palmolive. These are the list of just various alternatives.

ANALAYSIS OF ALTERNATIVES

After identification of alternatives there should be analysis. While in analysis we kept in mind all weakness and strengths of the alternatives.

Analysis is done against the decision criteria so that decision could be in the best interest of organization.

SELECTING AN ALTERNATIVE

During analysis we analyzed the alternatives against their respective weights. After this step we will be in a better position to identify and select the most appropriate alternative, which gas high scores and also more important and relevant according to the needs of the organization.

IMPLEMENTATION OF ALTERNATIVE

Decision may fail if the implementation of the alternative is not properly done. Because it is the time of putting the choice into action.

The selected alternative is implemented into action and effective planning, organizing, leading and controlling influence decisions.

EVALUATION OF DECISION EFFECTIVENESS

The best step in the decision making process is to check the results of decision which is made. To check whether, the decision is solved according to standard.

Where decision is not fulfill the requirements of problem, the again decision making process started and carry on until satisfied.

TYPES OF DECISION MAKING

Following are the main two types of decision-making

1. Programmed decision
2. Non-programmed decision

PROGRAMMED DECISION

S.P ROBBINS: “A repetitive decision that can be handed by routine approach”

BOVEE:

“A decision made when the situation occurs frequently enough, or is sufficiently well structure to be resolved by applying predetermined decision rules”

Programmed decision-making is relatively simple because, be mostly depend upon the past solution. Manager do what they have done in past in the same situation.

For example, if a server in a restaurant spills drink in the coat of a customer does not require that manager goes through all the decision-making steps.

There will be some standards to handle routine or daily activities such as:

• Its reserve fault
• Damaged is significant
• Customer has asked for remedy
• After the entire manager has to retain the customer whether

They have to bear something or not

NON-PROGRAMMED DECISION

S.P ROBBINS:

“Unique decision that require customer made solution”

Bovee:

“ A decision made in situation where predetermined decision rules can not be applied, because the situation is less structured, occurs rarely, or is unique”

These are less clear-cut than programmed decision and are not made regularly. Therefore, manager cannot develop guidelines for handling similar decision in the future.

Following are the example of non-programmed decision.

• Whether to merger with another organization or not
• How to re-engineer to improve process
• What type of marketing strategy is needed for a new product?