Decision making

1. DECISION MAKING
Submitted by :-
HARMAN &
KHUSHBOO
GULATI

2. What is Decision Making?
• Decision-making is a process of selection from a set of
alternative courses of action,which is thought to fulfill
the objectives of the decision problem more
satisfactorily than others.
OR
• Decision making can be regarded as the cognitive
process resulting in the selection of a course of action
among several alternatives. Every decision making
process produces a final choice.

3. Importance of Decision
Making
• Better utilisation of resources
• Business growth
• Achieving objectives
• Increases efficiency
• Facilitates innovation
• Motivates employees
• Solving problems in management
• Teamwork

4. Types of Decision Making
• PROGRAMMED DECISIONS :
A programmed decision is one that is fairly structured
or recurs with some frequency.
• NON-PROGRAMMED DECISIONS :
Non-programmed decisions are relatively unstructured
and may occurs much less often. They are made in
response to situations that are unique, are poorly
defined and largely unstructured.

5. Decision Making Styles
• Directive – Use minimal information and consider
few alternatives.
• Analytic – Make careful decisions in unique
situations.
• Conceptual – Maintain a broad outlook and
consider many alternatives in making long term
decisions.
• Behavioral – Avoid conflicts situations by working
well with others and being receptive to suggestions.

6. Conditions that affect the
possibility of Decision failure
• CERTAINITY
• all the information the decision maker needs is fully available
• RISK
● decision has clear-cut goals
● good information is available
● future outcomes associated with each alternative are subject to chance
• UNCERTAINITY
● managers know which goals they wish to achieve
● information about alternatives and future events is incomplete
● managers may have to come up with creative approaches to alternatives
• AMBIGUITY
● by far the most difficult decision situation
● goals to be achieved or the problem to be solved is unclear
● alternatives are difficult to define
● information about outcomes is unavailable

7. Organizational
Problem
Low Possibility of Failure High
Certainty Risk Uncertainty Ambiguity
Programmed
Decisions
Nonprogrammed
Decisions
Problem
Solution

8. Three Models of Decision Making
 Classical Model
 Administrative Model
 Political Model

9. 9
Characteristics of Classical, Political, and
Administrative Decision Making Models
Classical Model Administrative Model Political Model
Clear-cut problem and goals Vague problem and goals Pluralistic; conflicting goals
Condition of certainty Condition of uncertainty Condition of uncertainty/ambiguity
Full information about Limited information about Inconsistent viewpoints; ambiguous
alternatives and their outcomes Alternatives and their outcomes information
Rational choice by individual Satisfying choice for resolving Bargaining and discussion among
for maximizing outcomes problem using intuition coalition members

10. Decision Making Steps
Recognize need for
a decision
Frame the problem
Generate & assess alternatives
Choose among alternatives
Implement chosen
alternative
Learn from feedback

11. Decision Making Steps
1. Recognize need for a decision: Managers must
first realize that a decision must be made.
• Sparked by an event such as environment changes.
2. Generate alternatives: managers must develop
feasible alternative courses of action.
• If good alternatives are missed, the resulting decision is
poor.
• It is hard to develop creative alternatives, so managers
need to look for new ideas.
3. Evaluate alternatives: what are the advantages
and disadvantages of each alternative?
• Managers should specify criteria, then evaluate.

12. Decision Making Steps
4. Choose among alternatives: managers rank
alternatives and decide.
• When ranking, all information needs to be considered.
5. Implement choose alternative: managers
must now carry out the alternative.
• Often a decision is made and not implemented.
6. Learn from feedback: managers should
consider what went right and wrong with the
decision and learn for the future.
• Without feedback, managers never learn from
experience and make the same mistake over.

13. Problems in Decision Making
• Accuracy
• Participative Decision-making
• Timely Decision
• Communication of Decision
• Environment for Decision
• Implementation

14. Thank
You