Decision Making
- 1. DECISION MAKING
- 2. Introduction • It is a process by which individuals select a course of action among several alternatives to produce a desired result.
- 3. Types of Decision Making • Basic Decisions: They are unique, one time decisions demanding large investments. • Routine Decisions: They are repetitive in nature and are generally concerned with short term commitments.
- 4. Contd.. • Personal Decisions: Decisions to watch television, to study, etc.. Such decisions are taken by managers in their individual capacity. • Organizational Decisions: These decisions are made by managers in their official or formal capacity.
- 5. Contd.. • Programmed Decisions: routine, almost automatic process. • Managers have made decision many times before. • There are rules or guidelines to follow. • Example: Deciding to reorder office supplies. • Non-programmed Decisions: unusual situations that have not been often addressed. • No rules to follow since the decision is new. • These decisions are made based on information, and a manger’s intuition, and judgment. • Example: Should the firm invest in a new technology?
- 6. Effective Decision • Characteristics: 1. Goal Oriented 2. Alternatives 3. Dynamic Process 4. Continuous Activity 5. Social Process
- 7. 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.
- 8. Contd.. • 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.