Decision making

DECISION MAKING

By Isha Aggarwal

Prof. Jairaj Kochavara 2

What is decision??

A conscious choice among alternatives followed by action to implement the choice

Decision without action is meaningless


Decision Making

Decision making involves –

Complex mix of knowledge

Experience

Creative thinking

Risk taking


Decision Making

Knowledge

Emotion

Reason

Individual factors

Imagination

Uncertainty

Risk

Group factors

Decision making variables


Types of Managerial Decisions

Programmed DecisionsNonprogrammed Decisions Response to repetitive and routine problems, which is handled by a standard procedure that has been developed by management.

Policies are laid down to handle such situations

“Policy” are the guidelines for managerial action that must be adhered to at all times.

A decision for novel and unstructured problems or for complex or extremely important problems; deserves special attention of top management

No preexisting structure or decision-making procedure in place


Decision making process

Clarify the problem or opportunity

Develop alternative courses of

action

Evaluate alternatives and select a

course of action

Implement the selected alternative course of

action

Monitor consequences

of action

Feedback


Implement the Selected Alternative Course of Action

Six steps of effective delegation

Clearly define the task

Provide guidelines to begin or follow

Delegate authority to accomplish the task

Monitor the tasks, but don’t hover

Provide feedback along the way

Reward and recognize efforts as well as results


Influences on Individual Decision Makers

The Importance of the Decision

Time Pressures

The Manager’s Values

The Manager’s Propensity for Risk


Group Decision Making

In Organizations, a great deal of decision making is achieved through – Committes, Teams, Task forces, Other kinds of groups Virtual teams or Employees linked electronically who may or may not have met in person

10Prof. Jairaj Kochavara

Techniques for Stimulating Creativity

Brain storming

The Delphi Technique

The Nominal Group Technique

Three techniques for stimulating creativity are:



Brain storming A technique for stimulating creativity by using a

rigorous set of rules that promote the generation of ideas while avoiding the inhibitions that many people feel in group settings.

The basic rules are : No idea is too ridiculous Each idea presented belongs to the group No idea can be criticized

Widely used in advertising



The Delphi Technique A technique for stimulating creativity that

involves –

soliciting and comparing anonymous judgments

on the topic of interest through a set of sequential

questionnaires that are interspersed with summarized information and feedback of opinions from earlier

responses.



A technique for generating ideas that involves the anonymous contribution of ideas in a group setting.

A group of seven to ten individuals sit around a table but do not speak to one another.

Each person writes ideas on a pad of paper followed by a structured sharing of ideas.

Each person presents one idea. Recorder writes ideas on a flip chart in full view of entire

group. The output of this phase is a list of ideas Next phase is structured discussion of each idea. The next stage involves independent voting of ideas in

which each participant, in private, selects priorities by ranking or voting.

The group decision is the mathematically pooled outcome of the individual votes.

The Nominal Group Technique


Information Technology and Decision making

Information technology represents

the hardware, software,

telecommunications, database

management, and other

technologies used to store data and

make them available in the form of

information for organizational

decision making.

TimeTimelinessCurrency

FrequencyTime Period

Content Accuracy Relevance

Completeness Conciseness

ScopePerformance

Form ClarityDetailOrder

PresentationMedia

Characteristics of High-Quality Information


Tools for warehousing and retrieving information

Data warehousingThe storage of pieces of knowledge, often in the form of stories, for easy access for those who have future need of it

Data MiningThe use of software to search through the warehouse of stored information for relevant bits.

Data MartA subset of a data warehouse that is easier for people to search for the data and information they need.

Search enginesInternet services that locate information on the World Wide Web using key words or phrases

Software agentsSoftware tools that will perform services for an individual on the World Wide Web


Attributes of Useful Information

Attribute Description

Accessible Information can be obtained easily and quickly.

Timely Information is available when needed.

Relevant Managers need the information to make a particular decision.

Accurate Information is error free.

Verifiable Information is confirmed

Complete All details needed are available

Clear Information is stated in such a way that no facts are misunderstood.
