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The presentation explains the Decision Making Process & Styles of Decision Making at a Management level in a detailed manner. It has a video case study as well to simulate he idea of Decision Making in our day today life.
Decision Making Process & Styles of Decision Making at Management Level
Decision Making Process
& Styles of Decision
Decision-making can be regarded as a problem-solving activity
terminated by a solution deemed to be satisfactory. It is therefore a
process which can be more or less rational or irrational and can be based
on explicit or tacit knowledge.
Steps of Decision Making
•Define the Problem.
• Analyzing the Problem.
•Selecting the BestType of Alternative.
•Implementation of the Decision.
•Monitoring and Feedback.
The first and the foremost step in the decision-making
process are to define the real problem.
A problem can be explained as a question for and appropriate
The manager should consider critical or strategic factors in
defining the problem.These factors are, in fact, obstacles in
the way of finding proper solution.These are also known as
Analyzing the Problem
After defining the problem, the next important step is a
systematic analysis of the available data. Sound decisions
are based on proper collection, classification and analysis
of facts and figures.
Three principles relating to the analysis
• The futurity of the decision. This means to what length
of time, the decision will be applicable to a course of
• The impact of decision on other functions and areas of
• The qualitative considerations which come into the
After defining and analyzing the problem, the next step is to develop
alternative solutions.The main aim of developing alternative
solutions is to have the best possible decision out of the available
alternative courses of action.
In developing alternative solutions the manager comes across
creative or original solutions to the problems.
In modern times, the techniques of operations research and computer
applications are immensely helpful in the development of alternative
courses of action.
Selecting the Best Type of
After developing various alternatives, the manager has
to select the best alternative.
It is not an easy task
Four important points to be kept in mind in selecting
the best from various alternatives:-
•Risk element involved in each course of action against the
•Economy of effort involved in each alternative, i.e. securing
desired results with the least efforts.
•Proper timing of the decision and action.
•Limited resources available at our disposal.
Implementation of the
•Under this step, a manager has to put the selected
decision into action.
A follow up system ensures the achievement of the
objectives. It is exercised through control. Simply stated it is
concerned with the process of checking the proper
implementation of decision.
Follow up is indispensable so as to modify and improve upon
the decisions at the earliest opportunity.
Monitoring & Feedback
It provides the means of determining the effectiveness of the
implemented decision. If possible, a mechanism should be
built which would give periodic reports on the success of the
In addition, the mechanisms should also serve as an
instrument of “preventive maintenance”, so that the problems
can be prevented before they occur.
According to Peter Drucker, the monitoring system should be such
that the manager can go and look for himself for first hand
information which is always better than the written reports or other
In many situations, however, computers are very successfully used in
monitoring since the information retrieval process is very quick and
accurate and in some instances the self-correcting is instantaneous.
Decision Making Styles
Decision making style proposes people differ along two dimensions in
the way they approach decision making.The first is an individuals way
of thinking. Some people tend to be rational and logical and others
tend to be creative and intuitive.
The other dimension describes an individuals tolerance for ambiguity.
Some people have a low tolerance for ambiguity and others have high
level of ambiguity. Based on way of thinking and tolerance for
ambiguity decision making styles can be of four types.
Styles of Decision Making
Some managers will rely almost exclusively on their dominant style,
while others are flexible and can shift their style depending on the
situation. Some may take their time carefully weighing alternatives
and considering riskier options whereas others may be more
concerned about getting suggestions from others before making
decisions.This doesn't make one approach better than the other. It is
just their decision-making styles, which are different.
Managers using directive style have low tolerance
for ambiguity and are rational in their way of
thinking.They are efficient and logical.They make
fast decisions with minimal information and
assessing few alternatives.
Managers with an analytic style have high tolerance for ambiguity
than do directive type and are rational in their way of thinking.They
need more information and consider more alternatives.They are
characterized as careful decision makers with the ability to cope with
Managers with conceptual style have high tolerance for
ambiguity and an intuitive way of thinking.They tend to be
very broad to their outlook and consider many
alternatives.They are at finding creative solutions to
Managers with behavioral style have low tolerance for ambiguity
and an intuitive way of thinking.They work well with others.They
are receptive to suggestions from others.They often use meetings
to communicate although they try to avoid conflict.They want to
be accepted by others.