FLOW OF THE PRESENTATION

TYPES OF DECISIONS PROCESS OF DECISION MAKING TECHNIQUES/MODELS OF DECISION MAKING

TYPES OF DECISIONS

TYPES OF DECISIONS
1.PROGRAMMED AND NON-PROGRAMMED 2. MAJOR AND MINOR DECISIONS 3. ROUTINE AND STRATEGIC DECISIONS 4. INDIVIDUAL AND GROUP DECISIONS 5. SIMPLE AND COMPLEX DECISIONS

PROGRAMMED MADE IN ACCORDANCE WITH SOME POLICY, RATE,PRODEDURE GENERALLY REPETITIVE ,ROUTINE AND EASIEST TO MAKE. EG. AMOUNT OF OVERTIME PAYMENT DESTRUCTION OF OLD RECORDS.

NON-PROGRAMMED: NEW AND NON-REPETITIVE SUCH PROBLEMS HAVE NOT ARISEN EARLIER , NEW TREATMENT IS REQUIRED. E.G. *WHAT TO DO WITH DOCTORS WHO HAVE GONE ON STRIKE * LIC HOW TO MAINTAIN THE MKT. SHARE AFTER THE ENTRY OF PVT SECTOR COS.

PROGRAMMED DECISIONS ARE EASY TO MAKE WHEREAS NON-PROGRAMMED DECISIONS REQUIRE MORE MANAGERIAL SKILLS

. MAJOR AND MINOR DECISIONS

SOME MORE IMP. THAN OTHERS MAJOR DEDISIONS LONG TERM IMPACT EG. REPLACING MANUAL WORK WITH MACHINES. LOCATION OF STORING RAW MATERIALS, DECIONS AFFECTING ONLY ONE FUNCTION LIKE MKTG. CAN BE MINOR DECISIONS. PAYMENT OF INCENTIVE TO ALL EMPLOYEES IS A MAJOR DECISION. *** MAJOR DECISIONS TAKEN AT HIGHER LEVELS MAY BE RARE. ROUTINE DECISIONS TAKEN AT LOWER LEVELS.

ROUTINE AND STRATEGIC DECISIONS

ROUTINE TAKEN FOR RUNNING CO.S PERATIONS AND ACHIEVE HIGHER DEGREE OF EFFICIENCY. EG. DEPUTING EMPLOYEES TO ATTEND SEMINARS, PARKING FACILITIES, CALLING CUSTOMERS. STRATEGIC- REQUIRE LENGHTY DELIBERATION, LARGE FUNDS TAKEN AT HIGHER LEVELS . EG.LOWERING THE PRICES, STARTING A NEW BUSINESS.

INDIVIDUAL AND GROUP DECISIONS

INDIVIDUAL : PROBLEM IN ROUTINE, DECISIONS TAKEN BY ONE. DEFINITE PROCEDURE ALREADY EXISTS. GROUP DECISIONS: IMP. & STRATEGIC WHICH MAY RESULT INTO SOME CHANGES IN THE ORGANISATION .DECISION TAKEN BY A GROUP. INTER-DEPARTMENTAL DECISION TAKEN BY MANAGERS FROM DIFFERENT DEPARTMENTS. EG: LOWER COURT:ONE JUDGE TAKES INDIVIDUAL DECISION HIGH/SUPREME COURT: BENCH (3 OR 5) JUDGES TAKE GROUP DECISIONS.

SIMPLE AND COMPLEX DECISIONS

SIMPLE: WHEN VARIABLES TO BE CONSIDERED TO SOLVE A PROBLEM ARE FEW.ROUTINE DECISIONS AND LESS TIME CONSUMING. COMPLEX: WHEN VARIABLES TO BE CONSIDERED TO SOLVE A PROBLEM ARE MANY. MORE TIME CONSUMING.INVOLVES MORE RISK AND FUNDS ETC.

PROCESS OF DECISION MAKING

1. 2. 3. 4. 5. 6. 7. 8. IDENTIFYING A PROBLEM DECIDING PRIORITIES AMONG PROBLEMS DIAGONISING THE PROBLEM DEVELOPING ALTERNATIVES ANALYSING THE ALTERNATIVES SELECTING THE BEST ALTERNATIVE IMPLEMENTING THE ALTERNATIVE EVALUATING DESION AND FOLLOW UP

PROCESS OF DECISION MAKING

IDENTIFYING A PROBLEM
DEVIATION FROM THE PAST ;LOW SALES NOW THINGS NOT MOVING AS PER PLAN CUSTOMER BRINGS A COMPLAINT COMPETITOR HAS LAUNCHED A NEW MODEL

DECIDING PRIORITIES AMONG PROBLEMS

MANAGER SHOULD NOT FEEL OVER BURDENED. DELEGATE SOME PROBLEMS FEW REFEERED TO HIGHER LEVEL. SOME DEFERRED FEW NO ACTION CASES FINALLY TACKLE SOME NOW

DIAGONISING THE PROBLEM

PROBLEM AND SITUATION TO BE DIAGONISED GENERALLY NO STANDARD METHOD DIFFERENT MANAGERS MAY TACKLE A PROBLEM DIFFERENTLY WITH THEIR TRAINING, JUDGEMENT , EXPERIENCE , SKILLS. MANAGER SHOULD TRY DIAGONISE EACH PROBLEM IN A SYSTEMATIC MANNER.

DEVELOPING ALTERNATIVES
GENERALLY EACH PROBLEM HAS ALTERNATIVE SOLUTIONS. EG. PRESENTLY ONE PART OR INPUT BEING MADE MANNUALLY.MANAGER CONSIDERING TO MAKE IT THORUGH MACHINE NOW; ALTERNATIVES COULD BE:** CONTINUE AS IT IS ** IMPROVE THE PRESENT METHOD ** INSTALL A MACHINE TO MAKE THAT PART ** INSTALL A MACHINE TO MAKE ALL THE PARTS **BUY FROM SOME OTHER SOURCE.

ANALYSING THE ALTERNATIVES

ONCE ALTERNATIVES IDENTIFIED ,ANALYSE EACH COMPARE THE PROS AND CONS CONSEQUENCES TO BE CAREFULLY EXAMINED.

(**pros and cons is a shortening of pro et contra, which means for and against.)

SELECTING THE BEST ALTERNATIVE : THEN CONVEYING IT TO ALL CONCERNED. IMPLEMENTING THE LATERNATIVE: ENSURE ACTIONS TAKEN EVALUATING DECISION AND FOLLOW UP: FEEDBACK TO CHECK THAT WORK IS DONE IN DESIRED DIRECTION.

TECHNIQUES/MODELS OF DECISION MAKING

TECHNIQUES/MODELS OF DECISION MAKING

1. ECONOMIC MAN MODEL 2. ADMINISTRATIVE MAN MODEL 3. SOCIAL MAN MODEL

ECONOMIC MAN MODEL

MANAGERS CMPLETELY RATIONAL IN HIS/HER DECISIONS. ALWAYS SELECTS THAT ALTERNATIVE WHICH GIVES THE GREATEST ADVANTAGE. SERACHES THIS IN PLANNED AND LOGICAL MANNER. FOLLOWS THE STEPS OF PROCESS OF DECISION MAKING.

DRAWBACKS OF THE MODEL

A MANGER MAY NOT BE ABLE TO GATHER ALL THE INFORMATION REQUIRED. INABILITY TO ACCURATELY RECALL INFORMATION

PERSONAL MOTIVES MAY INTERFARE WITH ORGANISZATOIN DECISIONS.

ADMINISTRATIVE MAN MODEL

USES LIMITED RATIONALITY IN DECISION AS INFORMATION PROCESSING SKILLS ARE LIMITED TO SELECT THE BEST ALTERNATIVE MANAGER LOOKS FOR THE GOOD ENOUGH OPTION. DOES NOT EVALUATE ALL OPTIONS TO CHOOSE THE BEST. OPTIONS SEARCHED AND EVALUATED ONE BY ONE IN A SEQUENCE IF THE FIRST DOESNT WORK HE MAKES SEARCH FOR ANOTHER. THE MOMENT WORKABLE OPTION FOUND, SEARCH FOR MORE ABANDONED. PAST EXPERINCE PLAY IMPORTANT ROLE .EG. MORE WORK GIVEN TO GOOD WORKER.

SOCIAL MAN MODEL

MANAGER IS SOCIAL, PART OF SOCIETY. HAS FFELING & EMOTIONS AND IS GUIDED BY UNCONSCIOUS DESIRES. SUBJECTED TO SOCIAL PRESSURES AND INFLUENCES THUS, AT TIMES NOT CAPABLE OF TAKING RATIONAL DECISIONS. EG. ISSUES OF SAME CLASS OF EMPLOYEES. DECISIONS MAY NOT BE TERMED AS ORGANIZATIONALLY RATIONAL DUE TO STRONG SOCIAL PRESSURES- PERSONALLY RATIONAL EGCASH FOR PERSONAL USE.

DECISION MAKING-BOUNDED (LIMITED) RATIONALITY

MANAGERIAL DECISION MAKING ASSUMED TO BE RATIONAL SHOULD MAKE CONSISTENT, VALUE MAXIMISING CHOICES WITHIN SPECIFIED CONSTRAINTS. SIGNAL TO OTHERS THAT YOU ARE COMPETENET AND YOUR DECISIONS ARE THE RESULT OF INTELLIGENT DELIBERATION.

DECISION MAKING-BOUNDED RATIONALITY

BUT IN PRACTICE,REALISTICALLY, MANAGERS TEND TO OPERATE UNDER THE ASSUMPTIONS OF BOUNDED RATIONALITY. MAKE DECISIONS RATIONALLY BUT ARE LIMITED (BOUNDED) BY THEIR ABILITY TO PROCESS THE INFORMATION. {POSSIBLY CANTT ANLYZE ALL INFORMATION ON ALL ALTERNATIVES). MANAGERS SATISFICE ,RATHER THAN MAXIMIZE (ACCPET SOLUTION THAT ARE GOOD ENOUGH)

EG: AT TIMES ONE SEES A MOVIE OR JOINS A JOB THAT IS GOOD ENOUGH. ONE ALTERNATIVE LOOKS SATISFACTORY, UNDER THE CIRCUMSATNCES. ALSO DEPENDS OPON THE RISK INVOLVED. LIMITATIONS OF INOFRMATION AND TIME.

HOW DO MANAGERS PLAN? (PROCESS OF PLANNING)

1. ESTABLISHING GOALS GOALS ARE DESIRED OUTCOMES FOR INVIDUALS, GROUPS OR ENTIRE ORGANIZATIONS, ALSO CALLED OBJECTIVES. GOALS PROVIDE THE DIRECTION FOR ALL MANAGEMENT DECSIONS/ACTIONS AND FORM THE CRITERION AGAINST WHICH ACTUAL PERFORMANCE CAN BE MEASURED

 TRADITIONAL GOAL SETTING:APPROACH TO SETTING GOALS IN WHICH GOALS ARE SET AT THE TOP LEVEL OF THE ORGANISATION AND THEN BOKEN DOWN INTO SUBGOALS FOR EACH LEVEL OF THE ORAGANISATION. GOALS QUANTIFIED /QUALIFIED BY TOP MANAGEMENT AND GOALS SET FOR EACH LEVEL OF THE ORGANISATION.