This presentation provides an overview of decision making and the decision making process. It discusses the importance of decision making, the traditional approach to decision making, and the steps involved in decision making including defining the problem, developing alternatives, evaluating alternatives, and implementing the solution. It also covers types of decision making such as routine vs strategic, different techniques for group decision making including the Delphi technique and nominal group technique, and tools for decision making like decision trees.

1. Presentation on Decision
making
GROUP
MEMBERS :
NARAYAN KOIRALA
AKRITI BUDDHATHOKI
ABHINASH MISHRA
SHILPA VAIDYA
VIKRAM OLI

2. OBJECTIVE
Decision Making and its
Importance
Steps in Decision Making
Traditional Approach and
Conditions for DM
Types of Decision Making
Decision Tree
Techniques used for
decision making

3. DECISION MAKING
Decision =A choice made between alternative
courses of action in a situation of uncertainty.
Making= The process of applying the objectives in
proper way.
Simply ,
Decision Making
“Is a course of action among the various alternatives.”
The thought process of selecting a logical choice from
the available options.

4. Importance of Decision
Making
Analyse the situation
Think and Reflect
Decide your answers
Now...Go Head

5. Step In Decision Making
Defining the Problem: The first step towards a decision-
making procedure is to define the problem. Obviously, there would
be no need to make a decision without having a problem. So, the
first thing one has to do is to state the underlying problem that has
to be solved. You have to clearly state the outcome that you desire
after you have made the decision. This is a good way to start,
because stating your goals would help you in clarifying your
thoughts.

6. continued…..
Develop Alternatives: The next step after
defining the main problem would be to state out the
alternatives available for that particular situation. Here,
you do not have to restrict yourself to think about the
very obvious options, rather you can use your creative
skills and come out with alternatives that may look a little
irrelevant. This is important because sometimes solutions
can come out from these out-of-the-box ideas.
Evaluate the Alternatives: This can be said to
be one of the most important stages of the decision-making
procedure. This is the stage where you have to analyze
each alternative you have come up with. You have to find
out the advantages and disadvantages of each option.

7. Continued….
Make the Decision: This is the stage where the hard
work you have put in analyzing would lead to a proper
decision. The evaluation process would help you with clearly
looking at the available options and you have to pick
whichever you think is the most applicable. You can also club
some of the alternatives to come out with a better solution
instead of just picking out any one of them.
Implement the Solution: The next obvious step after
choosing an option would be implementing the solution. Just
making the decision would not give the result one wants. Rather,
you have to carry out on the decision you have made.

8. Traditional Approach
•The managerial decisions must be rational.
•Argued that managerial decisions maker is
guided by economic considerations in choosing
solution to the problem.
Assumptions
•Decision maker intend to maximize economic
gains.
•Objective and rational.
•Identify the problem clearly
•Full information about various alternatives.
•Complete freedom to choose the best
alternatives.

9. Conditions for making
decisions
Decision making under
certainty
 Also called Programmed decision making.
 When a manager knows exactly which state
of nature will occur, a circumstances of
certainty occur which means that the
manager will be able to make perfectly
accurate decisions.
 Deterministic model is used , wherein all
factors are assumed to be exact with
chance playing no role.

10. Decision making under
uncertainty
 Also known as Nonprogrammed
decision making.
 When there are many unknowns
and no possibility of knowing what
could occur in the future alter the
outcome of a decision.

11. Types of decision making
 Routine and strategic
 Policy and operating
 Organizational and Personal
 Programmed and Non-programmed
 Individual and group decisions
 Irreversible and Reversible
 Experimental
 Trial and Error
 Made in strategic
 Cautious
 Conditional
 Delayed

12. • Decisions are made repetitively
Routine and following certain established rules,
procedures and policies.
strategic • They neither require collection of
new data nor conferring with
people.
• Policy decisions-making is the
making of policies and the
Policy and decisions are made by the Top level
operating managers.
• Operating decisions are taken by
lower management in order to put
into action the policy decisions.

13. • It allows time for contingencies and
Programmed problems that may crop of later at the
time of implementation.
and Non- • It helps to limit the risks that are
programmed inherent to decision making, although
this may also limit the final gains.
• Decision taken by an individual in an
organization is known as Individual
Individual and Decision.
Group • Decisions taken by group of
organizational members is known as
Group Decision.

14. • Decisions that once made cannot be
Irreversible unmade is Irreversible Decision.
and • Decisions that can be changed
completely before, during or after
Reversible agreed decisions begins is Reversible
Decision.
Experimental • Decisions is not final until the first results
appear and prove themselves to be
Decisions satisfactory.
• It requires positive feedback before one
can decide on a course of action.

15. • In this type of decisions, knowledge is
derived out of past mistakes.
Trial and • A certain course of action is selected and is
Error tried out, if the results are positive, the
action is carried further, if the results
Decisions appear negative, another course is
adopted and so on and so forth a trial is
made and an error is occurred.
Made in • Decisions are made in steps until the
whole action is completed.
Stages • It allows close monitoring of risks as one
accumulates the evidence of outcomes
Decisions and obstacles at every stage.

16. • It allows time for contingencies and
problems that may crop of later at the
Cautious time of implementation.
• It helps to limit the risks that are
Decisions inherent to decision making, although
this may also limit the final gains.
• Such type of decisions can be
altered if certain foreseen
Conditional circumstances arises.
Decisions • It prepares one to react if the
competition makes a new move or
if the game plan changes radically.

17. • Decisions are put on hold till the
decision makers feel that the time
Delayed is right.
• Prevents one from making a
Decisions decision at the wrong time or
before all the facts is known.

18. Decision Tree What?
Decision support tool.
Options are laid and possible
outcome is investigated.
Helps to form a balanced
picture of the risks and rewards
associated with each possible
course of action.
Helps to choose between
several courses of action.

19. Decision Tree How ?
 Uses a tree-like graph or model of decisions and
their possible consequences.
 From this box draw out lines towards the right
for each possible solution, and write that solution
along the line. Keep the lines apart as far as
possible so that you can expand your thoughts
 Draw a small square to represent this towards
the left of a large piece of paper.
 At the end of each line, consider the results. If
the result of taking that decision is uncertain,
draw a small circle.

20. Decision Tree How ?
 If the result is another decision that
you need to make, draw another
square.
 Write the decision or factor above the
square or circle. If you have completed
the solution at the end of the line, just
leave it blank.
 Keep on doing this until you have
drawn out as many of the possible
outcomes and decisions as you can see
leading on from the original decisions.
 Challenge each square and circle to see
if there are any solutions or outcomes
you have not considered. If there are,
draw them in.

24. Group Aided Decision
 When all the members or group of members
collectively take the decision, it is known as a
Group Decision.
Features
 Used when problem is
complicated.
 Time-consuming.
 Leads to higher quality

25. Techniques used for Group
Aided Decisions
Delphi Technique
Nominal Group
Technique
Scenario Analysis
Consensus
making and
Brainstorming

26. Delphi Technique:
In this technique ,members don't have face to face
interaction for decision making.
Decisions are arrived at through written communication in
the form of questionnaires and mails.
Nominal Group Technique:
It is structured group meeting which restricts the verbal
communication among members.
Developed to foster creativity and to overcome the tendency
to criticize ideas when they are presented.

27. Scenario Analysis:
Analysis of possible future conditions.
Done by evaluating major environmental variables and
by assessing the likely strategies of other significant
factors such as formulating alternative scenarios.
Consensus making and Brainstorming:
Consensus making tries to pool the ideas generated by
several task subgroups to arrive at a decision.
Brainstorming is a creative technique of generating ideas
to solve a problem.

28. THANK YOU
ANY
QUERIES?????