DR PRIYANKA DR SNEHALATA

Everyday techniques
Pros and Cons: Listing the advantages and

disadvantages of each option, popularized by Plato and Benjamin Franklin. Contrast the costs and benefits of all alternatives. Also called Rational decision making.
the highest probability-weighted utility for each alternative acceptable one is found.

Simple Prioritization: Choosing the alternative with

Satisfying: Examine alternatives only until an

Flipism: Flipping a coin, cutting a deck of playing

cards, and other random methods.

 Prayer, tarot cards, astrology.

Taking the most opposite action compared to the

advice of mistrusted authorities (parents, police officers, partners ...)

Opportunity cost: calculating the opportunity cost of

each options and decide the decision.

Political: Negotiate choices among interest groups. "Garbage Can": Take actions without a formal

decision making process. Take actions as they appear promising without the need for any specific problem

What is decision-making?
The word decision is defined as: A choice between two or more alternatives.

Decision Making
The process by which managers respond to opportunities and threats that confront them by analyzing options and making determinations about specific organizational goals and courses of action.

Decision Types
Programmed Decisions:
A decision that is repetitive and routine A definite method for its solution can be

established

Does not have to be treated a new each

time it occurs

Procedures are often already laid out

Examples: pricing standard customer

orders, determining billing dates, recording office supplies etc.

Non-programmed Decisions:
A decision that is novel (new or unique) or Ill

structured & non routine.

No established methods exist, because it has

never occurred before or because

It is too complex Are tough decisions that involve risk and

uncertainty and call for entrepreneurial abilities Such decisions draw heavily on the analytical abilities of the manager Examples: Moving into a new market, investing in a new unproven technology, changing strategic direction

Programmed Decision
Certainty
all the information the

Non programmed Decision

Uncertainty
managers know which goals

decision maker needs is fully available. Risk decision has clear-cut goals. good information is available. future outcomes associated with each alternative are subject to chance.

they with to achieve. information about alternatives and future events is incomplete. managers may have to come up with creative approaches to alternatives. Ambiguity by far the most difficult decision situation. goals to be achieved or the problem to be solved is unclear. alternatives are difficult to define.

Conditions that Affect the Possibility of Decision Failure

Organizational Problem Low Certainty Programmed Decisions Problem Solution Possibility of Failure Risk Uncertainty High Ambiguity

Nonprogrammed Decisions

Decision Styles
Differences among people with respect to how they

perceive problems and make decisions

Not all managers make decisions the same

Directive style
Analytical style Conceptual style Behavioral style

Directive Style:
People who prefer simple, clear-cut solutions to problems
Make decisions quickly May consider only one or two alternatives

Efficient and rational

Prefer rules or procedures

Analytical Style:
Complex solutions based on as much data as they can gather
Carefully consider alternatives Base decision on objective, rational data from management control systems and other sources Search for best possible decision based on information available

Conceptual Style:
Consider a broad amount of information More socially oriented than analytical

style Like to talk to others about the problem and possible solutions Consider many broad alternatives Relay on information from people and systems Solve problems creatively

Behavioral Style
Have a deep concern for others as individuals
Like to talk to people one-on-one Understand their feelings about the problem

and the effect of a given decision upon them Concerned with the personal development of others May make decisions to help others achieve their goals

Vroom and Yetton Model

Vroom and Yetton have identified five decision styles for managers, and are classified as follows:

Autocratic
AI The decision is made individually, using the information available to the individual only AII
The manager obtains information from subordinates

and himself makes the decision

May or may not share with subordinates, the purpose

of questions or the nature of problem definition or selection of alternatives

Subordinates do not play any role in problem

Factors for Individual Decision-making

Short time

Unimportant to group
Manager can take decision Dominate the decision

Destructive conflict
Members hesitant Confidential data

Incapability of members
Managers dominance Indirect effect on group members

Consultative
CI
The manager shares the problem with relevant

subordinates individually

Getting their input individually and not as a group. The manager then makes the decision independently, and may or may not be influenced by the subordinates suggestions

CII
The problem is shared to subordinates in a group Their ideas and suggestions are sought in a group

meeting

The decision is then made by the manager which May or may not reflect the subordinates influence

Group Consensus
GI
The problem is shared to subordinates as a

group

Alternatives are generated and evaluated collectively

Effort is made to reach a consensus The decision is made collectively and the

manager functions as a coordinator managers solution

Does not press the group in adopting the The manager is willing to accept and implement

the decision of the group

Group Decision-making
The factors requiring group decisions include:

Involving sensitive issues High cost alternatives Involving very high risk factor Strategic impact Need for innovation and creativity

Data collection
Importance of acceptance Importance of solution Complex problem Democratic process Risk taking solution needed Better understanding Feedback required

Group Decisions: Advantages & Disadvantages

ADVANTAGES DISADVANTAGES

DECISION MAKING PROCESS

Decision-making Process
Identifying a problem Identifying decision criteria Allocating weights to criteria Developing alternatives Analyzing alternatives Selecting an alternative Implementing the alternative Evaluation (of decision effectiveness)

Problem Definition
Problem is a discrepancy (difference) between an existing and a desired state.
Example: The manager has resigned, and we need another manager Here the phrase manager has resigned reflects the current state while need another manager represents a desired state.

Identifying Decision Criteria

The word criteria, is defined as a standard by which something can be judged.
A decision criteria therefore, is the basis of a decision, which outlines the relevant and important factors for a decision. And implicitly, it also defines what is not important.

Decision Criteria: Example

In the above-cited scenario, the decision criteria may include the following factors:
Relevant qualifications Leadership skills

Communication skills
Planning and analytical skills Professional experience

Allocating Weights to Criteria

The next step in the decision making process is

prioritization.

Prioritization is achieved by assigning

quantitative weights to each criteria element. of each element.

The weightage defines the relative significance

Allocating Weights: Example

Criterion Relevant qualifications Leadership skills Communication skills Analytical skills Professional experience Weight 3 5 3 4 1

Developing Alternatives
Involves defining the possible alternatives (or choices) that would resolve the problem. In our case, the alternatives would be a list of candidates or job applicants.

Analyzing Alternatives
Alternatives are rated and analyzed on the

basis of the criteria say 1 5 etc.

The rating can be based on a specified scale, Rating may be subjective in nature and

thus,may depend on the judgment of the individual(s)

Criteria Rating: Example

CANDIDATES RATING AND ASSESSMENT Candidate Kamran Ashraf Rahila Mushtaq Tasaduq Hussain Zubair Ahmed Maliha Javed Qualification 3 2 4 2 4 Leadership 3 1 2 5 5 Communication 3 4 3 2 4 Analysis 1 2 2 4 3 Experience 1 2 3 1 2

Analyzing & Assessment: Example

EVALUATION OF CANDIDATES Candidate Kamran Ashraf Rahila Mushtaq Tasaduq Hussain Zubair Ahmed Maliha Javed Qualification 9 6 12 6 12 Leadership 15 5 10 25 25 Communication 9 12 9 6 12 Analysis 4 8 8 16 12 Experience 1 2 3 1 2 Total 38 33 42 54 63

Selecting an alternative
Involves choosing the best alternative, based on the above rating and analysis Generally implies selecting the alternative with the highest score.

Implementing the Alternative

Putting the decision into action
Involves clear communication of the decision to all concerned and

obtaining their commitment

Evaluation
Evaluation forms an integral part of any

process

Involves evaluation of the outcome based

on the desired goal and criteria

Involves assessing the effectiveness and

efficiency of the outcome (or the entire process)

In case of any undesired results, each step

of the process is carefully reviewed to trace the root causes

Intuitive decision making:

Making decisions on the basis of experience, feelings, and accumulated judgment.

Techniques for improving decision making

Brainstorming idea generation for decision making. Nominal group technique (NGT)problem outlined, presentation of solution in written form, discussion over written solutions, and final decision. Delphi technique - decision made on the basis of questionnaire filled by the respondents. Consensus mapping - decision made on the basis of thereport presented by the representative of each group after

Five Tips for Making Better Decisions

Stop seeking perfection. Many great leaders would prefer

a project or report be delivered only 80% complete a few hours early than 100% complete five minutes late. Moral of the story: Dont wait for everything to be perfect. Instead of seeking the impossible, efficient decision makers tend to leap without all the answers and trust that theyll be able to build their wings on the way down.

 Be independent. Good decision makers are

collaboratively independent. They tend to surround themselves with the best and brightest and ask pointed questions. For instance, in a discussion with subject-matter experts, they dont ask: What should I do? Rather, their query is: Whats your thinking on this? Waiting for committees or an expansive chain of command to make decisions could take longer. Get your information from credible sources and then act, swiftly. it. Similar to suddenly remembering the name of an actor that you think you'd just plumb forgotten. The same happens when youre trying to make a decision. By simply turning your mind off for a while or even switching to a different dilemma, youll give your brain the opportunity to scan its data bank for information that is already stored and waiting to be retrieved.

Turn your brain off. Insight comes when you least expect

 Dont problem solve, decide. A decision can solve

problem but not every problem can be solved by making a decision. Instead, decision making often relies more on intuition than analysis. Deciding between vendors, for instance, requires examining historical data, references and prices. But the tipping point often rests with your gut. Which feels like the right choice?

Admit your mistakes. If your feelings steered you

wrong, correct the error and fess up. Even making the wrong decision will garner more respect and loyalty when you admit youve made a mistake and resolve it than if you are habitually indecisive.

Thank you