Decision making

1. INDIVIDUAL AND GROUP
DECISION MAKING

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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