Decision Making
Definition ↓
- The process of examining your possibilities options, comparing them and choosing a course of action.
- A decision is a choice made between two or more available alternatives. Decision making is the process
of choosing the best alternative for reaching objectives. (Samuel C. Certo)
- Decision making can be defined as a process of choosing between alternatives to achieve a goal. It is
the process by which an individual chooses one alternative from several to achieve a desired objective.
(Manmohan Prasad)
Factors of making effective decisions
- Perception
- Priority
- Acceptability
- Risk
- Resources
- Goals
- Values
- Demands
- Style
- Judgement
Six C's of Decision Making
- Construct a clear picture of precisely what must be decided.
- Compile a list of requirements that must be met.
- Collect information on alternatives that meet the requirements.
- Compare alternatives that meet the requirements.
- Consider the "what might go wrong" factor with each alternative.
- Commit to a decision and follow through with it.
Types of Decisions
Basic Decision or Strategic Decisions
- All basic decision is strategic decisions involving large range commitments and large
investments.
- Slight or small mistakes in these decisions would seriously injure the entire organizations.
Administrative Decisions
- Herbert Simon has classified all decisions in two classes.
- Programmed decisions
- It involves organizations which an develop specific process for handling these decision.
- E.g. standing operating procedures and policies.
- Non-programmed decisions
- They relate to general probleem solving process.
- They involve judgement, intuition and creativity.
Organisational or Personal Decisions
- Organisational decisions reflect company policy. They can be delegated of transferred to others.
- While personal decisions refer to those made by a manager as an individual and these can't be
delegated.
Policy of Decisions
- Policy decisions are taken by the top management.
- Example - the declaration of bonus in a company is a policy matter which is to be decided by the
top management, while calculation and distribution of bonus is an operating decision which is
taken as the lower levels.
Individual & Group Decisions
- The decisions taken by the individual in the organization is known as individual decisions.
- Group decisions refer it the decisions which are taken by a group of organizational member
(board directors, commiter of experts)
Routine Decisions
- The type of decisions made when problems are relatively well defined and common & when
established rules, policies and procedures can be used to solve them.
Adaptive decisions
- The type of decisions made when problems and alternative solutions are somewhat unusual and only
partially understood.
Characteristics of Decision Making process
- From various courses of action, it is process of choosing a particular course of action.
- It is a human process which involves the application intellectual abilities.
- It is a rational process which is proceeded by deliberation and reasoning. It may also be called as
end process.
- It is always related to situation in which a manager may take one decision in a particular set of
circumstances and another in a different set of cicumstances.
- This involves certain specific purpose in which these may just be decisions not to decide.
Pases of decision making
- Intelligent activity
- Design activity
- Choice activity
Principles of decisions making
- Principles of autonomy
- Principle of beneficence
- Principle of paternalism
- Principle of utility
- Principle of justice
Techniques or basis of decision making
- Intuition - decision making by intuition is characterized by inner feeling of the person. He takes a
decision as per the dictates of his conscious.
- FACTS - It is considered to be the best basis of decisions making. Such decisions will be sound and
proper.
- Experience - Past experience of a person
becomes a good basis for taking decisions. When a similar situation arises the manager can rely on
his past decisions and takes similar decisions.
- Operations research - It helps managers by providing scientific basis for solving organized problems
involving interaction of components of the organization.
- Values - Being confused and unclear about one‘s values may affect decision- making ability.
Overcoming a lack of self- awareness through values clarification decreases confusion.
- Individual Preference - Overcoming this area of vulnerability, involves self- awareness, honesty and
risk taking.
Decision making models
- Normative model
- Descriptive model of decision making
- Decision tree model
- Strategic model
- Nursing process model
- Intuitive decision making model
- Ecological model
- Moral model
- Ethical decision making
- Problem solving model
Problem solving model
- Here three things get together
- Decision making - it is purposeful and goal directed effort using a systematic process to choose
among options. The hallmark of decision making is the identification and selection of options.
- Problem solving - problem solving is focused on trying to solve an immediate problem
- Creativity - It is essential for generation of options or solutions. Creative individuals are
able to conceptualize new and innovated approaches to a problem by being more flexible and
independent in their thinking.