Decision Making

Decision Making 
Decision-making  can be regarded as an outcome of mental processes (cognitive process) leading to the selection of a course of action among several alternatives. Every decision making process a produces a final choice. The output can be an action or an opinion of choice.


Typical Phases of Decision making 
●Explorative  (Searching )
●Speculative  (Analysis )
● Evaluative (Weighing )
● Selective (Commitment)

Herbert Simon's phases of decision making -Intelligence, Design, Choice.


Importance of Decision  making 
Drucker -"Whatever a manager does he it through decision making ". Simon describes management as decision making. 

Decision making is fundamental to management.  It is the foremost function of a manager. In all the managerial activities, planning , Organizing, controling, leading a manager has to take decisions.  Decision making has become complex today as a result of increased complexity and growth of organizations. The most important quality of manager is his ability to take correct and effective decisions. Decision making is a pervasive activity of management with managers at all levels having to make decisions in due course of their activities. 



Types of Decisions 
●Active/Passive 
●Personal/Organizational 
● Programmed/Non-Programmed 
●Short Rang /Long rang 
●Individual /Group decisions 


Factors Influencing Decision making 
Risk Taking - Organizations generally try to avoid risks. Thus those decisions are preferred where risk is less .
Fear of Failure -Fear of failure can inhibit the decision making process. Worry about unknown results of a decision paralyse the decision making process. 
personal Biases -Decision making is influenced by habits, reflexes, prejudice, emotional and affinities.
●Experience-Experience is important to decision making because it is knowledge and more the experience better the decisions are. But should not be over relied on .
Intuition - This refers to the experience recorded in subconscious . Sometimes decisions based on Intuition can be effective but relying solely on it without logic and facts can be detrimental to the decision making process. 
Seeking advice-Seeking advice results in a better feedback and lower risks. Hence it results in taking better results. 


Decision Making Process 
1. Ascertain the need for decision - This phase is meant to determine that a problem exists i. e.  there is an unsatisfactory condition. It refers to the difference between what is and what it should be. 
2.Diagnosing and defining the problem - Problem must be properly defined to reach an effective and correct solution. Many bad decisions are made because the problem wasn't  properly defined in the first place.
Following questions must be answered in order to define a problem-
What is the problem? 
Which problem to solve? 
What is the real cause of problem?
3. Developing alternatives-Data and information on the problem are collected and alternatives are generated through group discussions , brainstorming and divergent thinking.
4. Evaluation of alternatives-Evaluation of alternatives is based on some criteria. Each factor in the criteria has to be assigned weights.  Desirable and undesirable aspects of the alternatives have to be considered.  Attempt is to limit the number of alternatives to the most feasible, effective and manageable number. 
5. Select the best alternative -The criteria used to select the best alternative : 
1. Risk -Weighing of risks against gains
2. Economy of effort/money/time 
3. Timing 
4.Limitation of Resources-Physical, financial and human resources 



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