2. WHAT IS DECISION MAKING?
Decision making means to select a course of action
from two or more alternatives. It is done to achieve a
specific objective or to solve a specific problem.
According to James Stoner,
"Decision making is the process of identifying and selecting
a course of action to solve a specific problem."
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3. COMPONENT OF DECISION MAKING
Decision making in management has three components:
• Objectives or Problem : Decision making is objective
oriented. It is done to achieve an objective or to solve a
problem.
• Alternatives : There are two or more alternatives. Decision
making means to select the best alternative.
• Choice : Decision making involves a choice. It means to
choose the best solution for solving the problem.
“Good decisions come from experience.
Experience comes from making bad decisions.”
-Mark Twain05-Nov-19 3
4. PROCESS OF DECISION MAKING
1. Identify the decision –
To make a decision, you must first identify the problem
you need to solve or the question you need to answer. Clearly define
your decision.
2.. Gather relevant information –
Once you have identified your decision, it’s time to gather
the information relevant to that choice.
3. Identify the alternatives -
Identify possible solutions to your problem. There is usually
more than one option to consider when trying to meet a goal..
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5. 4.Evaluation of alternatives-
You need to compare each alternative for their positives and negatives.
5.Choose among alternatives-
Identified and clarified what decision needs to be made, gathered all
relevant information, and developed and considered the potential paths to take.
6.Take action-
Develop a plan to make your decision tangible and achievable.
7.Review your decision-
Take an honest look back at your decision. Did you solve the problem? Did you
answer the question? Did you meet your goals?
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6. TYPES OF DECISION MAKING
1. Personal and Organisational Decision Making
2. Individual and Group Decision Making
3. Policy and Operating Decision Making
4. Planned and Unplanned Decision Making
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7. Individual Decision Making
When the size of the business unit is small and the decisions to be
taken do not require high , Specific and technical knowledge,
then the decisions for various problem are normally taken by
the managers himself.
Such Decisions are Known as individual decision making
technique.
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8. Advantage of Individual Decision Making
You Can take immediate action and fast solution to a
problem or a situation.
You are solely responsible for the kind of decision whether it
is good or bad.
You take no argument with your personal opinions.
You take full accountability for the outcomes of the decision
and its consequences.
You become efficient with the use of time and effort in
reaching a decision.
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9. Group Decision Making
Group Decision making techniques means such decisions
which are not taken by a single individual,
but by a group.
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10. Advantage of Group Decision Making
The groups generally have a greater knowledge ,expertise
and skill base to make better decisions.
Larger number of members provide more perspective of the
problem.
Involvement in decisions leads to a higher level of
acceptance and satisfaction.
Better Communication
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11. Diff. b/w Individual and Group Decision making
Individual Group
Decisions are taken by single individuals. Decisions are taken by a group of persons.
Individuals decisions are less costly. Group decisions are costly in terms of time
and money.
They are based on limited information
gathered by managers.
They are based on extensive information
collected by members of the group.
Individual decisions are taken in situation
of emergency or crisis.
Group decisions are taken when there is
sufficient time to make decisions.
. They introduce one-man control. They introduce self-control.
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12. lndividual Group
Individual decisions do not affect job
satisfaction of employees.
Group decisions positively affect job
satisfaction of employees.
Individual decisions do not promote
interaction amongst superiors and
subordinates.
They promote superior-subordinate
interaction and healthy relationships
amongst them.
Decisions are usually based on clear policy
guidelines.
. Group decisions are taken when the
problem requires creativity and expert
knowledge of a group.
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