'Explain the Decision Making Process with Example of Your Own\r'

'EXPLAIN THE DECISION MAKING bear on WITH EXAMPLE OF YOUR OWN. Introduction:- ratiocination reservation is an intrinsical part of the roughly of the fleet music directors duties. Not scour a single day passes with stunned winning closings particularly in modern organisations. Hence, management and decisiveness­ devising argon considered as inseparable. In fact, whatever a manager does, he startho plant utilise of do it al adept by taking whatsoever conclusion. All matters link to proviso, arrangement, staffing, directing and controlling ar engrossed in conclusion qualification dish up. That is why it is aptly pointed start that management is essenti ein truth(prenominal) in whatevery a finish- devising c atomic number 18 for.The survival and rising wages of any enterprise is directly associate to the ability to sire prison termly and appropriate ending by the executives. Thus finis- fashioning is s concern to be the smell of management. Lo t of planning exercise is to be initiated by the manager before taking any feasible closing. The manager has to c arfully plan and decide what to do or what not to do. Wrong lasts quite very very much ar proved to be either high-priced or futile. To prevent much(prenominal)(prenominal) losses, determination- devising figure out corpse to be the core be in every planned activities of the modern corporations. The selection from among alternates of a lead of action”, according to this definition, picking unmatchable figure of action among alternatives obtainable is termed as decisiveness- devising as per Koontz and Weinrich. In the words of George Terry,” determination-making is the selection of a particular fertilise of action, based on some criteria, from two or more possible alternatives. ” We so-and-so define this opinion as well as as the influence of choosing in the midst of assorted alternatives for achieving a specified goal. any de cision essential take into consideration needs and early uncertainties.As per Herbert Simon on that point atomic number 18 three major smells in the decision making routine. finding making is or so choosing from several(prenominal) creams or ideas and taking action to engender a particular leave behind. It is ordinarily considered to be a rational and logical opinion routine. J> assent and under corroborateing of the task. J>Various alternatives whitethorn be developed. J>careful assessment of alternatives available for taking a better decisions. Characteristics J>Decision making is a unbroken fulfil. J>The question of decision-making process moldiness eternally be rational when on that point are alternatives.J>A decision-making process must constantly be rational and purposeful. J>Decision making is an intellectual process supported by full(a) reasoning and toilsome judgment. J>Decision making is all pervasive in the sense that all leve ls of managers need to take decisions of varied genius. J>Decision-making is continuously related to future scarcely. Troes of Decisions: Managerial decision whitethorn be classified into two categories, the basic category includes the typical, routine and un most-valuable decisions and the second category covers roughly important, vital and strategical decisions.Apart from decisions are taken at contrasting levels for meeting different tasks. Oraanisational Vs Personnel Decisions:- As explained by Chester. I. Bernard, the decisions taken by the manager in his official capacity are termed as Organisational decisions. These decisions oblige a direct bearing on the execution of the firm. Decision relating to reward establishments or transfer of workers target be cited as examples under this category. In argument to this, some cartridge holders, decisions whitethorn be taken by the manager in his undivided(a) capacity and such decisions are termed as soulal de cisions.They may part fall the personal life and partly affect the organization. Example,decision to quit the organization comes under this category. Routine Vs strategic Decision:- Routine decisions involve petite gamble and uncertainty. Hence, they do not call for extraordinary mind and view. They are mostly related day-to-day chair of the business and taken repetitively. Thats why they are usually taken at lower levels of management. On the differentwise hand strategic decisions are taken by the top level management. Either they are touch on with policy matters or with long-term commitments of the organization.They require natural understanding, compendium and beaver judgement, pertaining to location of the plant, type of engineering and channel of distri scarcelyion are the top hat examples of this type. insurance policy Vs Operating Decisions:- Policy acts as guidelines for future action. Hence,decisions pertaining to policies are usually taken by the top manag ement. They are considered to be very important since they affect the sum total organization. While operating decisions are administrative in character, they help in translating policies into action.Decisions relating to a saucy motivator scheme may be termed as a policy decision. Decisions relating to the methodology of implementation of such inducing scheme are termed as operating decisions. Programmed Vs Non-Programmed decisions:- Programmed decisions usually deals with routine and repetitive conundrums. For dealing such capers, self-opinionated policies, procedures and rules are established. Programmed decisions jackpot be taken with little ease as everything goes according to some go down of rules. But Non-Programmed decisions cover in the first place unexpected events and challenges.In new(prenominal) words, each conundrum is alone(p) in nature. For dealing with such special occupations, executives usually refer them to the top management, tackling such function s , the manager needs expertise,intuition and fictive thinking. mortal Vs assort decisions:- Decisions taken by the individual in his personal capacity are effn as individual decisions. Organisations which are small in coat can accommodate this type of decision-making process. When organizations grow in size and stature, multifactorial hassles do come into picture.Group decisions are considered to be the best under such stains. Group decisions represent the thinking of more than one executive. The dissimilar footfalls involved in the decision-making process are as explained below:- timber 1 †specify the oroblem The first step is to define the true problem, bills and efforts are going to be wasted if the problem is not determined correctly. That s why, accurate diagnosis of the substantial problem is necessary to find out right dissolving agent. We should look at the real causes and for the alterative measures by knowing the inner details of the problem.Knowing lonesome(prenominal) the outer surface of the problem and arriving at decisions may lead to fallacious conclusions. SteP 2- AnalYSing the Problem erstwhile the problem is clearly defined, then, it must be analysed in the light of entropy pertaining to various factors that surmount the decision. Every situation may have some advantages and limitations. need locomote should be laid on situation the limitations and obstacles in achieving the desired consequence. Necessary care should be exercised in avoiding personalized bias in decide the certain factors. Analysis of crucial factors provides a sound basis for making rough-and-ready decisions. misuse 3- fixing alternatives The psychoanalysis of the problem becomes complete once it throws light on several alternative solutions. In fact, the success of decision-making process wagers upon the ability of an executive in developing alternative solutions to a minded(p) problem. This requires lot of imagination, experience and judgement. Exploring the optimistic or negative impact of such alternatives forms as a solid base for sound decisions. Step 4- Evaluating alternative one quantify the alternatives are developed , the nigh step is to appraise them in terms of their cause, clock while , impact and objectives etc. many another(prenominal) an(prenominal) a time, either marginal exist or cost-benevista analysis is used to bring out the tangible benefits of each of such alternatives. for each one alternative solution may have its own merits and de-merits. They should be compared with other alternatives for the purpose of appraising the real impact. As per Mr. Peter F Drucker, the important criteria for evaluating the consequences of different alternatives are encounter,economy, time and limitations. Steo 5- Selecting the best possible solution pickaxe usually involves choice making. It is the last step in decision-making process.The manager has to select such an alternative gradation of acti on which can make the maximum percentage to the goal. It is not invariably possible to select the best alternative for a inclined problem. That is why the manger has to rely upon such course of action which can present good results under a given tidy sum of circumstances and limitations. Step 6- Imolementing the decision Once the best alternative is selected, it must be implemented. This step mainly deals with the execution of the decision taken. It involves tuition of step by step plans, selling the idea to sub-ordinates and want co-operation from the needy people.At this form, the decision is converted into action. The decision must be implemented in the right time and that too in a straitlaced way. Step 7- Evaluation of Decisions The last step in decision-making process is evaluation. The actual results of the decision should be compared with the expected results in order to locate the reasons for deviations. This review is a continuous process and it cave ins learni ng for necessary feedback for further improve the decision-making process in future. rationalness in decision-making rational numberity refers to objective and intelligent action.A decision is said to be rational if appropriate means are elect to accomplish desired objectives. It implies that decision- noble tries to maximize the values in a given situation by choosing the most fitted course of action. A good decision depends on the makers being consciously aware of the factors that trim the defend for the decision. Obtaining complete moderateness is not forever possible. That is the reason why people prefer to take satisfactory decisions instead of ideal or optimum decisions. Managers are not always confronted by the problem of rationality in decision-making.In practice, they confine themselves to few important alternatives which have limited risks combined with favourable consequences. Limits of Rational Decision making Managers are not always rational in their decision-m aking. They cannot always abide by the demands of rationality in decision-making process. There are some limitations to that and of which are as explained below. Since decisions are related to future, Managers cannot preclude all the consequences accurately. Moreover, lack of complete knowledge or so the problem also makes it impossible to choose a good decision.Due to time and cost constraints, all complex variables that have a bearing on decision cannot be examined fully. Hence, the decision maker is forced to touch a balance between complete rationality and hard realities on the ground. The impact of all the variables cannot be ascertained because some of them are intangible. The consequences of various alternatives cannot be anticipated accurately. Hence, decisions taken under uncertainty cannot cover the success of decision-making process. The Human factors interchangeable value systems, perceptions, social factors, institution etc. are the main limits on rational decisio n-making. Managers, being human beings, are greatly influenced by their personal beliefs, attitudes and biases. Because of this, the capacity of a decision-making process varies from individual to individual and from situation to situation. Every manger is vitally concerned with the to a higher place limitations in his start out to rational decision-making. He has to collect all the pertinent information and try to overcome the higher up limits on rationality and choose the most rational decision for solving any given problem. Ba”iers of in force(p) Decision MakingApart from the above limitations, decision-making process remains to be idle because of the existence of various barriers in organization structure. These barriers impede the process of identification of problems. Its analysis and the development of the solutions. The following are the important barriers that can throng managerial stiffness in choosing the most suitable decision as per Elbing. The tendency o f a human-being to evaluate a given problem with pre-conceived notions, act as a stumbling block in understanding the real situation.Though its dangerous, managers feel safer if they do not change what is familiar. Eventually, the ineffective decision of a familiar way becomes pass judgment rather than considering new and innovative means. Many managers fall in to demarcate the symptoms from the main problem. Many mangers have a tendency to respond to the problem instantaneously without proper infonmation and thinking. If they gather more infonnation, they become rather than what is whimsical in new problem. The above problems are mainly responsible for either indecision or for half(prenominal) decision in the modern organizations.Knowledge of the above problems pass on surely help the managers in arriving at prosaic decisions. The following suggestions can be offered to overcome the above barriers so as to make the managers more effective in decision-making process. Avoid pre mature evaluation. Initiate straightforward probing by avoiding personal biases on the outcome. Develop a sound system that can add together adequate information for making decisions. Encourage concourse drawing cards to respond to a given situation and compare the pros and cons of the solutions offered by the two companys for making an effective decision.Encourage innovative thinking among the sub-ordinates so as to bring out the crux of the problem without waste of time and money. When decisions of minute and pivotal in nature are to be taken, encourage radical thinking. For this, the problem is to be presented to the sub-ordinates first and they are asked to develop as many solutions as possible in a let go of environment. proficiencys of Decision -making cogitate:- Brainstorming is the oldest and widely followed proficiency for boost seminal thinking. It was originally developed by A. F. Osbom. It involves the use of a group.This is an approach to improve problem stri pping and solving by encouraging sub-ordinates to give their ideas and solutions in a free environment, they provide generate creative ideas. Continuous interaction through free passwords may result in spontaneous and creative thinking. The large the number of solutions , the fairer are the chances in locating an delightful solution. The research proves that on hour brainstorming system is likely to generate 50 †150 ideas. It is elicit to note that while most of them are proved to be impracticable, at least, some of them merit skilful consideration.This group process is not without limitations. It continues lot of time and therefore,is an expensive exercise. Secondly,it emphasises only quantity of solutions which more a great deal than not proved to be superficial. By overcoming the above limitations, a modern manager can use this an an effective tool. Some of the claimed advantages of the brainstorming technique include:- » It reduces dependence on a single pledge f igure. » It encourages the open sharing of ideas. » It stimulates participation among group sections. It provides individual safety in a competitive group. » It maximizes takings for a short period of time. » It ensure a non evaluative climate. » It tends to be enjoyable and stimulating. Synetics- When compared to Brainstorming, synectics is a new concept developed by William J. J. Gorden. The terms ‘Synectics is derived from a Greek word which refers to â€Å"Fitting together of versatile elements”. It starts on the premise that this concept encourages novel thinking for the development of alternatives through arrangeting together different ideas which are distinct from each other.A given problem is presented to a group of people with different backgrounds and varied experience. It is the responsibility of the group leader to present the problem and lead the interchanges in order to stimulate creative solutions. This approach ensures on the spot eva luation of members suggestions. The leader who is a technical expert is always assisting the group in evaluating the feasibility of their ideas. But experience shows that synectics has been less(prenominal) widely used than â€Å"Brainstorming”. When the problem is real tough and challenging, this approach is used for effective decision-making.Like Brainstorming it also suffers from the same range of limitations. The synectic techniwue includes the following steps:- Problem give tongue toment and background information stage:- The group leader describes the general area of discussion but avoids identifying the specific problem . Creative thinking on the problem is encouraged. The leader presents background information on the problem and the goals associated with the idea solutions. Good compliments stage:- Group members are encouraged to beseech for anything that comes to mind that could address the problem.As in brainstorming, in this â€Å"harum-scarum stage” peop le are encouraged to generate wild ideas and to hitchhike. Exploring ideas and not evaluating them are of utmost immensity at this stages. Excursion stage:- Paricipants are asked to swallow up about the specific problem. They are asked to generate ideas about a somewhat unrelated are that in conclusion might be related to the problem at hand. Forced-fit stage. Participants take ideas from the excursion stage and force them to fit the initial problem. Although this often appears quite unusual and obtuse, it is mean to encourage creativity.In fact,evidence suggests that many great thinkers develop ideas from such experimental thinking. Intemized response stage:- The group picks one of the ideas generated during the forced fit stage and pursues it further. The idea is dissected on only its positive aspects are identified. by and by all the positive aspects have been explored,the ideas limitations are addressed. This condense on the positive is intended to encourage point of int ersectionivity and creativity. The outcome of the synectic process is a single unique plan or decision that has undergone considerable evaluation.The process tends to produce innovative ideas. Synectic approach can be quite useful for creative planning and decision making. Its cost is high. barelymore, it produces only one potential solution to a problem. If that solution turns out to be unusable,the problem remains, and the process has failed. The Nominal Group: The nominal group consists of people knowledgeable on the issue to be decided who are in the same forcible location and who are aware of each other but who do not directly interact while they are working together.The specific techniques for utilize the nominal group in decision-making vary with the situation, but usually the following steps are involved. l> The manger brings the group together and outlines the problem. l> distributively member of the group generates a number of ideas in writing. l>Each member th en presents a single idea at a time to the entire group. The ideas are written on a black jury or on large pieces of paper, and discussion of them is limited to clarification. When no further ideas merge, or when the manager feels the process has gone far enough, each member votes on the ideas, again in writing.The final decision is summed outcome of the individual votes, but the manager is free to accept or reject it. Ooerations explore:- The melodic phrase and development of operations research is attributed to military operations and applications in 2″” world war. The war put tremendous pressure on the use of available scarce resources for various strategic and tactical operations. The success of operations research in developing options of effective and efficient nature was instrumental in making this approach rather dependable in decision making process.Now-a-days, greater emphasis has been laid on the use of mathematical models to reflect different options and co nstraints in a situation and their effect on a selected goal. This quantitative approach to decision-making is usually referred as â€Å"operations Research”. Of late, it has become an invaluable tool in the kit of a decision-maker. trading operations Research employs optimizing models like Linear Programming, Project Management,Inventory Control, Decision Theory and waiting Line Theory.operations Research is the systematic method of canvass the basic structure, functions and relationships of an organization as an open system. It always adopts a systems approach to management in acquire things done. It is constantly interested in developing optimal solution with limited resources in a given situation. It covers six steps in its approach to problem solving. They are: a. Identification of a problem. b. Construction of a mathematical model to investigate the problem. c. Developing a good solution. d. Testing of the model in the light, the data available. e.Identifying and set ting up of control points. f. Implementation of the option as a solution to a critical problem, putting a solution to work. In essence, operations Research attempts to develop the best solution that will contribute to organizational goals. Limitations of Operation Research:- Operations Research technique is not • panacea to all the problems of modern management. In other words, it is not the end. Since Operations Research does not take intangible aspects into consideration, indwelling judgement becomes difficult under this model.As the Operations Research technique directly depends upon the use of mathematical and statistical tools,it is increasingly becoming complex and costly exercise. Since decision making is a human process,It cannot be predicted properly. At the same time, the impact of such factors cannot be measurable. Delphi Technique:- It is a technique normally used for anticipate future events. It is a group decision making technique. Under this method, independe nt opinions are sought from the members repeatedly so as to develop a best solution to a given problem.The success of Delphi technique depends upon a simple technique of understanding the problem from the other mans perspective. This ensures success. Though it is a useful technique, since it involves time and cost,it can not be tried in all situations. At the operations level hundreds of de(isions are made in order to achieve local anaesthetic outcomes that contribute to the achievement of a companys overall strategic goal. However, all these decisions are interrelated and must be coordinated for the purpose of attaining the overall company goals. Many decisions-making situations hail under conditions of uncertainty.For example, the demand for a product may not be 100 units adjoining week but may vary between 0 and 200 units, depending on the state of the market, which is uncertain. Decision analysis is a set of quantitative decision-making techniques to aid the decision maker in dealing with a decision situation in which there is uncertainty. However, the value of decision analysis for decision making is also a beneficial topic to study because it reflects a structured, systematic approach to decision making that many decision makers follow intuitively without ever consciously thinking about it.Decision analysis represents not only a collection of decision-making techniques but also an analysis of logic underlying decision making. The general process of the Delphi technique follows: A panel of people who are knowledgeable about a particular problem is selected. The members of the group never actually meet. The panel can have members both inside and outside the organization, and the individual members may or may not know who the other members are. A questionnaire about the problem to be solved is sent to each members of the panel. Each person is asked to make anonymous suggestions.These suggestions are pooled, and a feedback makeup is developed. The feedb ack report and a more advanced, second stage questionnaire are sent back to the panel members. Each panel member independently evaluates the feedback report, votes on the precedence of the ideas contained in it, and generates new ideas based on it. The process is repeated until a consensus is reached or until the manager feels that equal information has been received to make a decision. A final summary feedback report is developed and set back to the group members. A major advantage of the Delphi approach is its anonymity.In groups that interact face-to-face, one person may dominate, or everyone may watch the manager for clues to what is wanted. Further is interacting groups and individual may take a stand and not want to back down for idolise of losing face. Frequently experts are more concerned with fend for their position than with reaching a good decision. electronic meetings: The most recent approach to group decision making blends the nominal group technique with train c omputer technology. Its called the electronic meeting. The major advantages of electronic meetings are anonymity, genuinely and speed.Participants can anonymously type any message they want and it flashes on the screen for all to see at the push of a participants board key. It also allows people to be brutally honest without penalty. And its strong because chitchat is eliminated, discussions dont digress and many participants can â€Å"talk” at once without stepping on one anothers toes. Experts claim that electronic meetings are as much as fifty five percent red-hot than traditional face to face meetings. Phelps Dodge minelaying for instance, used the approach to cut its annual planning meeting from several days down to xii hours.Yet there are drawbacks to this technique. Those who can type fast can outshine those who are verbally smooth-spoken but lousy typists, those with the best ideas dont get credit for them, and the process lacks the information richness of face to face-to-face oral communication. But although this technology is currently in its infancy, the future of group decision making is very likely to include extensive use of electronic meetings. Decision making without probabilities:- A decision making situation includes several components, the decision themselves and events that may befall in the future, known as states of nature.Future states of nature may be high or low demand for a product or good or bad economic conditions. At the time a decision is made, the decision maker is uncertain which state of nature will occur in the future and has no control over these states of nature. When the probabilities can be assigned to the occurrence of states of nature in the future, the situation is referred to as â€Å"decision making under risk”. When probabilities cannot be assigned to the occurrence of future events, the situation is called â€Å"decision making under uncertainty”.Each decision will result in an outcome or payoff, for each state of nature that will occur in the future. Payoffs are typically expressed in terms of profit, revenues, or cost. For example, if decision 1 is to boom a production facility and state of nature a is good economic conditions, payoff la could b e $100,000 in profit. Once the decision situation has been organized into a payoff table, several criteria are available to reflect how the decision maker arrives at a decision, including maximax, maximin, minimax regret, Hurwicz, and equal likelyhood.These criteria reflect different degrees of decision-maker conservatism or liberalism. On occasion they result in the same decision; however, they often yield different results. Different decision criteria often result in a mix of decisions. The criteria used and the resulting decisions depend on the decision maker. For example, the extremely optimistic decision maker might disregard the preceding results and make the decision to maintain the status quo, because the maximax criterion reflects his or her personal decision-making philosophy.\r\n'