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BY: Jayati negi Dushyant Nishant Archana

Defining Decision Making


Decision-making is the process of identifying problems and opportunities and selecting a course of action to deal with a specific problem or take advantage of an opportunity. A Decision represents a course of action chosen from a number of possible alternatives.

Characteristics of Decision Making Process.


It is a human process involving to a great extent the

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

Major and minor decisions


Routine and strategic decisions organizational and personal decisions individual and group decisions policy and operation decision

Steps in decision making


The following are the steps in the process of decision making:
Defining and analyzing the problem

Developing alternative solution


Selecting the best alternative Converting the decision into effective action

Follow up

Techniques for Decision Making


Traditional Techniques

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.

Modern Techniques of Decision Making


Operational Research Techniques:
OR is the application of Scientific method, tools and techniques to Operations of system with Optimum solution to the problem. It forms an Analytical, Objective and Quantitative basis for arriving at a decision. It puts emphasis on defining the problem with compilation and evaluation of data, development and testing of hypothesis, establishing relation between various data and taking measures to improve performance.

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.

4.
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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CONSIDER YOUR OPTIONS


Even when problems are correctly identified, they are often not given the attention they deserve nor the action they require. Once you know what the problem really is, you must take the action to solve it by spending some time looking at the problem from an open and objective perspective, by this you will be able to generate a clearer picture of the factors that need to be considered.

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CHOOSE THE BEST SOLUTION


The last step in problem solving is to choose the best solution is by evaluating the alternatives with this analysis you can narrow down your alternatives and select one or two tentative solutions.

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PROBLEM SOLVING TECHNIQUES

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