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Decision Making Process & Styles of Decision Making at Management Level

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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.

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Decision Making Process & Styles of Decision Making at Management Level

  1. 1. Decision Making Process & Styles of Decision Making PRESENTED BY: Qazi Faheem
  2. 2. Decision Making 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.
  3. 3. Steps of Decision Making •Define the Problem. • Analyzing the Problem. •DevelopingAlternative Solutions. •Selecting the BestType of Alternative. •Implementation of the Decision. •Follow-up. •Monitoring and Feedback.
  4. 4. Define The Problem
  5. 5. 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 solution. 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 limiting factors.
  6. 6. 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.
  7. 7. Three principles relating to the analysis and classification • The futurity of the decision. This means to what length of time, the decision will be applicable to a course of action. • The impact of decision on other functions and areas of the business. • The qualitative considerations which come into the picture.
  8. 8. Developing Alternative Solutions
  9. 9. 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.
  10. 10. Selecting the Best Type of Alternative After developing various alternatives, the manager has to select the best alternative. It is not an easy task
  11. 11. 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 expected gain. •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.
  12. 12. Implementation of the Decision •Under this step, a manager has to put the selected decision into action.
  13. 13. Follow Up 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.
  14. 14. 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 implementation. In addition, the mechanisms should also serve as an instrument of “preventive maintenance”, so that the problems can be prevented before they occur.
  15. 15. 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 second-hand sources. 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.
  16. 16. 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.
  17. 17. 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.
  18. 18. Directive Style 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.
  19. 19. Analytic Style 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 unique situations.
  20. 20. Conceptual Bargain 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 problems.
  21. 21. Behavioral Style 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.
  22. 22. Case Study