DECISION MAKING IN MANAGEMENT

DECISION MAKING IN MANAGEMENT

  16:35    Rahul R

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A Decision is a  choice from available alternatives

Characteristics of Decision making

n  Goal Oriented

n  Alternatives

n  Analytical-intellectual

n  Dynamic process

n  Pervasive function

n  Continuous activity

n  Commitment of time, effort and money

n  Human and social process

n  Integral part of planning

Goal Oriented

n  Decisions are usually made to achieve some purpose or goal

n  The intention is to move ‘toward some desired state of affairs’

Alternatives

n  A decision should be viewed as ‘a point reached in a stream of action’

n  It is characterized by two activities – search and choice

n  The manager searches for opportunities to arrive at decisions and for alternative solutions

n  Choice leads to decision

Analytical-Intellectual

n  Decision making has both intuitive and deductive logic

n  It contains both conscious and unconscious aspects

n  Decision-making cannot be completely quantified

n  Many decisions are based on emotions or instincts

n  Decision is uniquely human and is the product of deliberation, evaluation and thought

Dynamic process

n  It is a process of using inputs effectively in the solution of selected problems and the creation of outputs that have utility

               It is a process of identifying worthwhile things to do in a dynamic setting

Pervasive Function

n  Decision-making covers every part of an enterprise

n  Decision making is the essence of a manager’s role

Continuous Activity

n  The manager decides things on a continual and regular basis

n  It is not a one shot deal

Commitment of time, effort and money

n  The commitment may be for short-term or long-term depending upon the type of decision

n  Once a decision is made the org moves in a specific direction, in order to achieve the goals

Human and social process

n  Involves intellectual abilities, intuition and judgment

Integral part of planning

n  Decision making is the core of planning

n  Both aim at achieving goals

n  Both are situational in nature

n  Both involves choice among alternatives

n  Both are based on forecasts and assumptions about future risk and uncertainty