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MANAGEMENT

DECISION MAKING
Decision making - Definition
 Purposeful selection from among a set of alternatives in
light of a given objective.

 The mental processes resulting in the selection of a
course of action among several alternatives. Every
decision making process produces a final choice.

 The output can be an action or an opinion of choice.



Quality of Decision-Making
depends on…
 1. Good information.
 2. Management skills in analyzing information and
handling its shortcomings.
 3. Training of managers in decision-making skills.
 4. Experience and natural ability in decision-making.
 5. Risk and attitudes to risk.
 6. Human factors.
Types of Business Decisions

 1. Programmed Decisions.
 Standard decisions which follow the
 same routine.

 2. Non-Programmed Decisions.
 Non-standard and non-routine.

Levels of Decision Making
Management Decision Making
Methods

 Rational Decision Making.

 Intuitive Decision Making.

 Innovative Decision Making.


Rational Decision Making
Intuitive Decision Making
 A good memory
 An extensive body of knowledge
 A variety of experience memories and accurate
interpretation of them
 Memory of other peoples’ experiences and accurate
interpretation of them
 Ability to distinguish between relevant and irrelevant
concepts
 Good reasoning and analytical ability
Innovative Decision Making
 Unconscious Scanning

 Intuition

 Insight

 Logical Formulation
Management Decision Makers
 Decisive Decision Makers

 Flexible Decision Makers

 Hierarchical Decision Makers

 Integrative Decision Makers



 Systemic Decision Makers
Management Decision Making
Styles

 Reflexive

 Reflective

 Consistent
Management Decision Making
Styles
High Analytical Conceptual
Tolerance for ambiguity

Careful decision makers Broad outlook


Adapt to new situation More alternatives

Directive Behavioral
Less information Receptive to suggestions
Few alternatives Avoid conflicts
Low
Rational Intuitive
Way of thinking
Constraints on Decision-
Making

 Availability of time.
 Economic climate.
 Lack of technology.
 Existing Business Policy.
 People’s abilities and feelings.
 Decision randomness.
 Decision coercion.
Improving Decision Making
 Improve the setting.

 Use Logical Techniques.

 Show flexibility to increase acceptability.

 Beware of personal biases.

 “Success in management is
when those you manage
succeed, and the organization
you work for succeeds.”
References
§ http://www.mindtools.com/pages/article/newTED_00.htm
§ http://www.helium.com/items/1289688-managerial-decision-
making-and-the-decision-process?
§ http://tutor2u.net/business/organisation/decisionmaking.htm
§ http://www.businessballs.com/problemsolving.htm
§ http://www.thinkingmanagers.com/management/creative-
solutions
§ http://www.answers.com/topic/decision-making
§ Harold &Heinz 2004. Essentials of management; Tata Mc
Graw-Hill Pub. Company Ltd,