Concept, Nature, Importance, and Process. Types of decisions. Problems in decision making.

Decision making
Koontz & Weihrich define decision making as

selection of a course of action from among alternatives, it is the core of planning.

It consists of1. Identify the purpose or goal 2. Analyze the set of circumstances/conditions 3. Develop alternative solutions 4. Evaluate them and choose the best 5. Implement the selected solution

Nature of Decision-making
It is a selection process best alternative

It is an end process which is preceded by discussion &

selection It is the application of intellectual abilities to a great extent It is a dynamic process It is situational It is taken to achieve objectives of an organization A decision may be both positive & negative It involves critical evaluation of alternatives

Importance of Decision-making
Formulation & Implementation of strategies Initiation & completion of all management activities Better Utilization of Resources Tackling Problems and Challenges Achieving Objectives Increase Efficiency Facilitate Innovation Motivate Employees Business Growth

Approaches in Decision Making

The Intuitive Emotional Approach- decisions based on intuition The Rational Model Approach- decision based on weighing alternatives & consequences A Satisficing Approach- choosing the first alternative that meets the decision-makers minimum standard of satisfaction Political-Behavioural Approach- meeting the demands of all the stakeholders

Decision-Making Process
Identify the problem

Define specific objectives

Generate alternatives

Evaluate each alternative

Select the best alternative Implement the choice Follow up

Types of Decisions
Programmed Departmental decision

decisions Non-programmed Major Minor Operative Organizational Individual decision Group decision

Crisis decision
Research decision Problem decision Opportunity decision Certainty decision

Uncertainty decision
Non-economic

decision

Problems in Decision-making

First Impressions Status Quo Protecting Past costs Tunnel Vision- Seeing what one wants to see Implicit Favorites Over confidence Lack of Creativity Focusing on dramatic events Neglecting relevant information Seeing patterns where none exist Groupthink