DECISION MAKING
DECISION-MAKING- MEANING, CHARACTERISTICS, DECISION-MAKING
PROCESS, GUIDELINES FOR MAKING EFFECTIVE DECISION, TYPES OF
DECISIONS.
DEFINATIONS
• GEORGE R. TERRY: “DECISION-MAKING IS THE SELECTING OF AN ALTERNATIVE, FROM TWO OR MORE
ALTERNATIVES, TO DETERMINE AN OPINION OR A COURSE OF ACTION.”
• ANDREW SZILAGYI: “DECISION-MAKING IS A PROCESS INVOLVING INFORMATION, CHOICE OF
ALTERNATIVE ACTIONS, IMPLEMENTATION, AND EVALUATION THAT IS DIRECTED TO THE ACHIEVEMENT
OF CERTAIN STATED GOALS.”
• DECISION-MAKING IS NOT THE MONOPOLY OF TOP MANAGEMENT ALONE, THOUGH IT IS TRUE THAT
DECISIONS MADE AT THIS LEVEL ARE OF FAR-REACHING IMPORTANCE FOR THE ORGANIZATION AS A
WHOLE. IN FACT, MANAGERS AT ALL LEVELS ARE ENGAGED IN DECISION-MAKING OF ONE KIND OR
ANOTHER, THE SIGNIFICANCE OF THEIR DECISIONS DIFFERING IN PROPORTION TO THE DUTIES
ASSIGNED AND AUTHORITY DELEGATED TO THEM.
CHARACTERISTICS
• RATIONAL PROCESS
• GOAL – ORIENTED ACTIVITY
• CONTINUOUS ACTIVITY
• SITUATIONAL
• UNCERTAINTY AND RISK
• ALTERNATIVES
• HUMAN ELEMENT
TYPES OF DECISIONS
• PROGRAMMED DECISIONS: WHEN MANAGERS TAKE DECISIONS ON SIMPLE AND
STRAIGHTFORWARD PROBLEMS (STRUCTURED PROBLEMS), THE DECISIONS ARE KNOWN AS
ROUTINE OR PROGRAMMED DECISIONS.
• NON-PROGRAMMED DECISIONS: WHEN MANAGERS HAVE TO TAKE DECISIONS THAT ARE
NOT ROUTINE BUT UNIQUE IN NATURE FOR UNSTRUCTURED PROBLEMS AND ARE NOT
SUPPORTED BY PROPER INFORMATION AND BEAR CERTAIN RISKS, SUCH TYPES OF DECISIONS
ARE KNOWN AS NON-PROGRAMMED DECISIONS. THESE DECISIONS ARE GENERALLY
CUSTOMIZED FOR SPECIFIC TYPES OF SITUATIONS.
• STRATEGIC DECISIONS: THE DECISIONS TAKEN BY THE TOP-LEVEL MANAGEMENT TO FULFILL
ORGANIZATIONAL GOALS AND OBJECTIVES ARE SAID TO BE STRATEGIC DECISIONS. IT
INVOLVES A BUSINESS EXPANSION OR DIVERSIFYING INTO OTHER BUSINESS AREAS.
STRATEGIC DECISIONS ARE GENERALLY NONPROGRAMMED DECISIONS.
• TACTICAL DECISIONS: TACTICAL DECISIONS ARE TAKEN BY THE MIDDLE-LEVEL MANAGEMENT
AND CONSTITUTE THE ALLOCATION OF ROLES AND RESPONSIBILITIES TO EMPLOYEES AS WELL
AS FORMULATING THE BUDGET FOR THE DEPARTMENT. THESE ARE GENERALLY PROGRAMMED
IN NATURE.
• MAJOR AND MINOR DECISIONS: SOME EXAMPLES OF MAJOR DECISIONS INCLUDE
ACQUISITIONS OF ORGANIZATIONS, MERGERS, OR DIVERSIFYING INTO OTHER BUSINESS
AREAS, AND MINOR DECISIONS MIGHT RANGE FROM GRANTING LEAVE TO AN EMPLOYEE TO
PREPARING A MONTHLY BUDGET FOR THE UNIT’S EXPENDITURE.
• INDIVIDUAL AND GROUP DECISIONS: GROUP DECISION-MAKING GENERALLY OUTPERFORMS
INDIVIDUALS WHO MAKE DECISIONS IN ISOLATION, BUT IN SOME INSTANCES, INDIVIDUAL
DECISION-MAKING CAN WORK WONDERS IN AN ORGANIZATION WHEN A GROUP FAILS TO
ARRIVE AT A CONSENSUS.
DECISION MAKING PROCESS
GUIDELINES FOR MAKING DECISION MAKING
EFFECTIVE
• DEFINE THE GOALS
• ENSURE THAT THE DECISION CONTRIBUTES TO THE GOAL
• ADOPT A DIAGNOSTIC APPROACH
• INVOLVE SUBORDINATES IN DECISION-MAKING PROCESS
• ENSURE SUCCESSFUL IMPLEMENTATION OF THE DECISION
• EVALUATE THE RESULTS
• BE FLEXIBLE
QUIZ TIME
A DECISION IS THE SELECTION OF A
COURSE OF ACTION
TRUE
DECISION-MAKING IS THE PROCESS BY WHICH
THE DECISION-MAKER TRIES TO JUMP OVER THE
OBSTACLES PLACED BETWEEN HIS CURRENT
POSITION AND THE PAST POSITION.
FALSE
THE FIRST STEP IN DECISION-MAKING
PROCESS IS DEVELOPING THE PROBLEM.
FALSE
IN BRAINSTORMING, THE PARTICIPANTS ARE
GIVEN ONLY AN OUTLINE OF THE PROBLEM
TRUE
IN WHICH OF THE FOLLOWING SITUATIONS
SHOULD AN EMPLOYEE USE HIS OWN
JUDGMENT?
I) WHEN IMMEDIATE ACTION IS NECESSARY AND THE RULES DO NOT COVER THE SITUATION.
(II) WHENEVER THE RULES APPEAR TO BE UNFAIR IN THEIR APPLICATION.
(III) WHENEVER A SITUATION IS NOT COVERED BY ESTABLISHED RULES.
(IV) WHENEVER A SUPERIOR IS PRESENT.
IN WHICH OF THE FOLLOWING SITUATIONS
SHOULD AN EMPLOYEE USE HIS OWN
JUDGMENT?
I) WHEN IMMEDIATE ACTION IS NECESSARY AND THE RULES DO NOT COVER THE SITUATION.
(II) WHENEVER THE RULES APPEAR TO BE UNFAIR IN THEIR APPLICATION.
(III) WHENEVER A SITUATION IS NOT COVERED BY ESTABLISHED RULES.
(IV) WHENEVER A SUPERIOR IS PRESENT.
