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application of Intellectual abilities. It is a process of choosing a course of action from among the alternative courses of action. It is an end process preceded by deliberation and reasoning. It is always related to a situation. Involves a certain commitment of the Organization for adopting a specific course of action. Decision Making in business is always related to its Objectives. Help in solving problems, resolving crisis and tackling various situations.
Types of decisions
Decisions may be of different types:
programmed and non-programmed decisions
Follow up
Modern Techniques :
Operative research Techniques. Delphi Technique Decision Tree.
Traditional Techniques
Unprogrammed Decisions :
Traditionally managers bank on intuition, judgment for making up such decisions. Judgments are based on past experience and intuition about the future. It is an Economic Technique though the decisions taken may be wrong at times.
Conti.
Programmed Decisions :
They are routine and repetitive in nature. Standard Operating Procedures and Organization Structure are used. In Organization Structure, Responsibility is assigned and adequate authority is delegated to each manager to carry out responsibilities. Necessary Managerial positions are created to solve problems of varying nature.
Delphi Technique
Group Decision Technique and used in Long or Medium Range
Forecasting. Steps :
1. Panel of Experts in drawn from within and outside 2. 3.
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5.
Organization. Each Expert makes anonymous forecasts. Each Expert is provided Composite feedback about various Experts answers. Each Expert is free to change his opinion on basis of feed back. Process is reached till Consensus is reached.
Decision Tree
A Graphic method by which a decision maker can readily
visualize alternatives together with Risks, possible Outcomes and Information Needs involved in each Chance. Some decisions involve a series of steps, with each step depending upon the preceding step and so on. Often Uncertainty surrounds each step and so we face lot of Uncertainty in totality.
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There are three main steps in problem solvingIDENTIFY THE PROBLEM 2. CONSIDER YOUR OPTION 3. CHOOSE THE BEST OPTION
1.
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PROBLEM IDENTIFICATION
The process of problem identification is necessary in any situation in which an expected level of performance is not being achieved and in which the cause of unacceptable performance is unknown.
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