There are many types of decisions which would be required to make as a manager. Three most widely recognised classifications are: 1. Personal and Organisational Decisions the basic difference between Personal and Organisational decisions is that "personal decisions cannot ordinarily be delegated to others, whereas organisational decisions can often if not always be delegated" . Thus, the manager makes organisational decisions that attempt to achieve organisational goals and personal decisions that attempt to achieve personal goals. The personal decisions can affect the organisation, as in the case of a senior manager deciding to resign. However, if we analyse a decision, we may find that the distinctions between personal and organisational decisions are a matter of degree. We are, to some extent, personally involved in any organisational decision that we make and we need to resolve the conflicts that might arise between organisational and personal goals. 2. Basic and Routine Decisions Another common way of classifying types of decisions is according to whether they are basic or routine. Basic decisions are those which are unique, one-time decisions involving long-range commitments of relative permanence or duration, or those involving large investments. Examples of basic decisions in a business firm include plant location, organisation structure, wage negotiations, product line, etc. In other words, most top management policy decisions can be considered as basic decisions. Routine decisions are at the opposite extreme from basic decisions. They are the everyday, highly repetitive, management decisions which by themselves have little impact on the overall organisation. However, taken together, routine decisions play a tremendously important role in the success of an organisation. Examples of, routine' decisions are an accountant's decision on a new entry, a production supervisor’s decision to appoint a new worker, and a salesperson's decision on what territory to cover. Obviously, a very large proportion of the decisions made in an organisation are of the routine variety. However, the exact proportion of basic to routine types depends on the level of the organisation which the decisions are made. 3. Programmed and Non-programmed Decisions The difference between Programmed (routine, repetitive) decisions and Non-programmed (unique, one-shot) decisions. While programmed decisions are typically handled through structured or bureaucratic techniques (standard operating procedures), non-programmed decisions must be made by managers using available information and their own judgement. As is often the case with managers, however, decisions are made under the pressure of time. An important principle of organisation design that relates to managerial decision making is Gresham's Law of Planning. This law states that there is a general tendency for programmed activities to overshadow non-programmed activities. Hence, if we have a series of decisions to make, those that are more routine and repetitive will tend to be made before the ones that are unique and require considerable thought. This happens presumably because you attempt to clear our desk so that we can get down to the really serious decisions.
Many of the classifications of decision making style and examples are fairly accurate descriptions of what actually happens when people are attempting to make decisions. As I've already mentioned, it?s frequently a description of how they actually avoid making decisions. If what you really want is to learn a decision making model that works, then you can learn how you personally make good decisions with confidence.
Different Types of Decision Making The following are the most common types of decision making styles that a manager in a business or even a common man might have to follow. Irreversible: These decisions are permanent. Once taken, they can't be undone. The effects of these decisions can be felt for a long time to come. Such decisions are taken when there is no other option. Reversible: Reversible decisions are not final and binding. In fact, they can be changed entirely at any point of time. It allows one to acknowledge mistakes and fresh decisions can be taken depending upon the new circumstances. Delayed: Such decisions are put on hold until the decision maker thinks that the right time has come. The wait might make one miss the right opportunity that can cause some loss, specially in the case of businesses. However, such decisions give one enough time to collect all information required and to organize all the factors in the correct way. Quick Decisions: These decisions enable one to make maximum of the opportunity available at hand. However, only a good decision maker can take decisions that are instantaneous as well as correct. In order to be able to take the right decision within a short span of time, one should also take the long-term results into consideration. Experimental: One of the different types of decision making is the experimental type in which the final decision cannot be taken until the preliminary results appear and are positive. This approach is used when one is sure of the final destination but is not convinced of the course to be taken.
Trial and Error: This approach involves trying out a certain course of action. If the result is positive it is followed further, if not, then a fresh course is adopted. Such a trail and error method is continued until the decision maker finally arrives at a course of action that convinces him of success. This allows a manager to change and adjust his plans until the final commitment is made. Conditional: Conditional decisions allow an individual to keep all his options open. He sticks to one decision so long as the circumstances remain the same. Once the competitor makes a new move, conditional decisions allow a person to take up a different course of action.
An organization without people, who can't make decisions and take them to their logical conclusion is doomed. However, when there is a decision making will power, with tenacity to execute strategy, miracles can happen despite limited resources. That's why, importance of decision making in any organization, can never be overemphasized. Think Tank /Neuroscience: Using cognitive research theory to help in decision making aids Pros: Experienced decision makers know when to use the emotional brain. You can train the rational brain to perform more effectively Cons: Very less is known about the brain’s coginitive functions to rely on this completely. Individual decision making might be overvalued
Analytics: Using data and quantitative analysis to support decision making Pros: Decisions are likely to be more accurate. Scientific method adds rigor to analysis Cons: Assumptions need to be stated very clearly. Gathering data to support validate analysis might sometimes be difficult
Small Group Process: Making effective decisions with a small set of people. For a great read on creation of effective decision making groups, check out “Design of small groups” on Intuitor.com Pros: A decision will be well thought out. Alternatives can be examined. Responsibilities can be assigned Cons: Clear norms about a rational debate must be established. Need to ensure that everyone is on board after decision is made
1. Intuition : Make decisions based on gut feelings Pros: Easiest form of decision making. In certain situations with familiar patterns from past, gut feel can be a very effective guide Cons: Very low precision levels. Presence of context can sway decision making by intuition
Decision makers will find four major benefits to planning: 1. Planning allows the establishment of independent goals. The vision which will shape the decisions is set apart from surrounding events. Decisions are not made only as reactions to external stimuli. "Management by firefighting" is replaced by a conscious and directed series of choices. Managers now steer the organization, individuals now steer their lives, rather than being steered by external forces. Sometimes the difference between planning and not planning is described as "proactive" (taking control of the situation) versus "reactive" (responding to stimuli). 2. Planning provides a standard of measurement. A plan provides something to measure against, so that you can discover whether or not you are achieving or heading toward your goals. As the proverb says, If you don't know where you're going, it doesn't matter which way you go. 3. Planning converts values to action. When you are faced with a decision, you can consult your plan and determine which decision will help advance your plan best. Decisions made under the guidance of planning can work together in a coherent way to advance company or individual goals.
The decision making and problem solving models
+The Decision Making and Problem Solving Models Dynamics and Techniques of Decision Making
+ Which Mobile Phone Should I buy? What are the things you consider before making a decision?
+ What should I wear for class or work today? What are the things you consider before making a decision?
+ Decision Making 2. Types and Styles of Decision Making 1. What is decision making? Why decision DECISION MAKING 3. Roles of actors, stakeholders and the 4. Decision Making publics: participants’ Approaches beneficiaries and victims of Decision Making
+ Decision making - The mental processes (cognitive processes) resulting in the selection of a course of action or an opinion among several alternatives. Can involve a number of methods; Involves a large body of research, books, and ideas etc. Why make a decision? Decisions in response to opportunities: respond to ways to improve performance. Decisions in response to threats: occurs when people are impacted by adverse events to the organization.
+ Types of Decisions Personal and Organizational Decisions Personal decisions cannot ordinarily be delegated to others Organizational decisions can often if not always be delegated Basic and Routine Decisions Basic decision - unique, one-time decisions involving long-range commitments of relative permanence or duration Routine decisions - everyday, highly repetitive, management decisions which by themselves have little impact on the overall organization Programmed and Non-programmed Decisions Programmed decision they can be written down into a series of fixed steps which anyone can follow. Made by managers using available information and their own judgment
+ Decision making styles : Go to what works? A long list One classification includes the following: analytical conceptual impulsive procrastinating flexible proactive fatalistic dependant normative behavioral
+ Irreversible: These decisions are permanent.Different Kinds ofDecision Reversible: Reversible decisions are not final and binding. Delayed: Such decisions are put on hold until the decision maker thinks that the right time has come. Quick Decisions: These decisions enable one to make maximum of the opportunity available at hand. Experimental: One of the different types of decision making is the experimental type in which the final decision cannot be taken until the preliminary results appear and are positive.
+ Trial and Error: This approach involvesDifferent Kinds of trying out a certain course of action.Decision Conditional: Conditional decisions allow an individual to keep all his options open.
+ Functions of Management Planning Choose Goals Controlling Organizing Monitor & measure Working together Leading Coordinate
+ Decision Making Roles of actors, stakeholders and the publics: participants benef iciries and victims of Decision Making I ndicat or Roles of Act or s Public St akeholder sPlanning Par t icipant s as best j udges Par t icipant s as a valuables t o evaluat e t he dif f er ent sour ce f or elicit ing concer ns opt ions (pot ent ial vict ims and benef act or s)I mplement ing Par t icipant s as implement orCont r olling Checks & Pr ovide Feedback
+ Decision-makers areRoles of each responsible for deciding what objectives should bein Decision emphasized where tradeoffsMaking among values are needed. Analysts are professionals, scientists, or other specialists who analyze the effect of each alternative management action on each objective. The analysts role is advisory and is best performed if the analyst does not exhibit a preference for certain objectives or alternatives.
+ Stakeholder involvement is the early and extensive engagement of stakeholders in the process of planning, decision making, and implementation. Stakeholders are those effecting change in the community and those affected by it. Stakeholder collaboration uses a stakeholder group with sufficient authority to apply collaborative learning and conflict resolution techniques to formulate effective and acceptable decisions.
+ Stakeholder involvement has three objectives: Avoid Conflict: collaborative efforts aim to engage stakeholders in a process of resolving conflicts among them through negotiation, mediation, and collaborative learning. Develop a "Shared Vision": collaborative efforts intend for the stakeholders to come up with a vision or direction that they can agree to and buy into. Formulate Creative Solutions: all collaborative efforts hope to use dialogue and group processes to develop creative solutions that may not have emerged from traditional planning exercises.
+ Public participation is dependent on both the willingness of the public to be involved and to allow appropriate opportunities. the aim is to enable greater involvement of ‘real’ citizens in decision making at a local level, rather than involvement of community groups or the ‘usual suspects What are the implications? Raised expectations of greater participation and citizen engagement. Difficulties in widening the demand for participation beyond than those often referred to as the ‘usual suspects’. Removing of barriers to participation Initiatives may face problems if they fail to understand ultimately what makes people tick – why, when and how they want to participate.
+ Clear decision roles yield five benefits • More effective decisions by: –Assigning a single decision-maker with both authority and accountability for a decision • More efficient decisions by: –Removing unnecessary participants from the process and pushing decisions down in the organization • More responsive decisions by: –Assigning clear responsibility to the decision recommender to drive the process and the decisionmaker to make the decision • Greater transparency into decision- making –Staff members ‘know where they stand’ with respect to each decision • Reduced conflict by reducing role confusion –Clear decision roles eliminates unnecessary tensions
+ Think tank - The decision making ability of the think tank of anyDecision Making organization, be it the local city council or United Nations, decidesApproaches how effective a role it will play in the world. Many organizations exist for the sake of existing and despite phenomenal amount of resources available at their disposal, they hardly do any work. That is because there is no will or decision making ability at the helm. Devil’s Advocate: One member of the group acts as the devil’s advocate and critiques the way the group identified alternatives.
+ Rational model :This is the most popular type of model and is based around a cognitive judgment of the pros and cons of various options. It is organized around selecting the most logical and sensible alternative that will have the desired effect. Detailed analysis of alternatives and a comparative assessment of the advantages of each is the order of the day.
+ The focus group technique : Decision Making by more than one person Usually followed in organizations It has some advantages and some disadvantages
+ Intuition/common sense: The ability to very rapidly process information, more physically than mentally, so that you can make effective and long lasting decisions that benefit you.
+ Strategic Planning: Planning allows decisions to be made in a much more comfortable and intelligent way. Planning even makes decisions easier by providing guidelines and goals for the decision. We might even say that planning is a type of decision simplification technique
+ Decision Making Personal, Group and Institutional Decision Making Approaches Approaches Personal Group Institution Intuition/Common Sense √ Rational Approach √ Strategic Planning √ Think Tank √ √ Devils’Advocate √ √ Focus Group √ √