Decision making

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Decision making

  1. 1. DECISIONMAKING-BUSINESS MANAGMENT
  2. 2. DEFINITION Involves the process of the identifying problems and finding alternatives to solve the problems.
  3. 3. AUTHORITY IN DECISIONMAKING Organization face a lot of problems and opportunities everyday. Therefore, managers should have the ability to the determine which problem or opportunity should be given priority. Managers must make various decisions in order to ensure that the organization is running smoothly.
  4. 4. cont As decision making is an important process in organization, the employee who has the authority and responsibility in making decision for the organization can be determined by looking at 2 factors :a) Scope of decision - refer to the percentage of management system that will be affected by the decision. As the percentage become bigger the scope of the decision also become wider.
  5. 5. b) Management level - As the decision scope becomes wider, managers who will be responsible in making decision will come higher management level
  6. 6. TYPES OF DECISION The types and quantity of information obtained will influence the decision made by managers. The approach that must be used to make decision depend on the current condition.a) Programmed decision. - Based on set policies, rules and procedure - Every has written and unwritten rules that can be followed by managers and other employees to make decision on a routine basis.
  7. 7. b) Non programmed decision. - Use to solve unique or extraordinary problems. -Suitable for solving problems that cannot be solve based on organizational policies. -Used by top line manager to solve the problem and managers should have high conceptual skills to solve it.
  8. 8. CONDITIONS OF DECISIONMAKING In most conditions, it is impossible for decision makers to know the impact of the selected alternatives. This is because organization and environment keep changing. There are 3 different decision making conditions :1) Condition under certainty2) Risky condition3) Condition under uncertainty
  9. 9. 1) Condition Under Certainty - Managers will be able to predict what will happen in the future. - Managers have real information that is accurate and reliable. - They also have an adequate and complete knowledge about the matter. - This is enables them to list the outcomes of implementing the available alternatives.
  10. 10. 2) Risky Condition managers ability to predict is difficult. This is because the manager has just enough information to estimate the outcome of a decision without adequate information. Have an effect on what to do, whether successful or unsuccessful.
  11. 11. Conditions Under Uncertainty in this case the manager has no direct information relating to revenue and the impact of an alternative. This usually happens when managers do not have data or information directly related to what will happen in the future. Then managers need to make very important and the ability to think critically
  12. 12. THE DECISION MAKINGPROCESS Identifying the problem Form alternatives Analyze the alternatives Select the best alternatives Evaluation
  13. 13. IDENTIFY THE PROBLEM Thisstep involves a clear interpretation of the problem. The causes of the problem. Managers need to gather information and vital signs were related to the problem. Once identified then the manager can take steps to resolve the issue.
  14. 14. FORM ALTERNATIVES When problems are identified, managers need to find some possible alternatives to the problem. More information is required to find a solution to the problem. Managers need to involve as many employees as they may have more ideas and views to solve the problem. Managers need to find some alternatives to solve the problem. Technique of "brainstorming" is widely used in searching and creative ideas.
  15. 15. Analyze the alternative Managers can be a valuation to each alternative the best. in this evaluation managers need to consider 4 things: Impact of each alternative. What are the advantages and disadvantages of the alternative. Estimate of the effect of each alternative possibilities if elected. Effects may be obtained when implementing of the alternative . Compared effects of each alternative, if selected. Costs and benefits of implementing these alternatives. This selection depends on the wisdom of the managers involved to find the best alternative.
  16. 16. Select the best alternative When managers choose the best alternative, then a form of alternative plans to implement will be formed. managers see the potential impact of the actions developed. If all three previous steps being carried out properly then the implementation stage will be run more effectively.
  17. 17. Evaluation After the alternative be implemented then managers need to reassess whether the results satisfy the management or not. If satisfactory, continuing the current need to be continued and if not satisfactory, then the problem solving process to be carried back and take corrective action.
  18. 18. DECISION MAKINGTECHNIQUES Brainstorming - It is a process in which all the ideas produced by each member and sorted the best ideas to help in decision making. This technique should be carefully designed to encourage each member to contribute as much as possible alternatives, and decision logic to solve problems and make decisions. From the alternatives, the best will be chosen and others will be ignored.
  19. 19.  Nominal- A decision-making process where all members have equal participation. There are 4 steps: a. Each member recorded the ideas of the problem. b. Each member present ideas orally and recorded by other members. c. After all the discussions, the idea were recorded. d. The discussion of each member to assess the ideas and determine the highest aggregate in silence.
  20. 20.  Delphi This technique is a group decision making technique that is more complex and take time. This technique does not allow team members to meet face to face. This technique is similar to nominal group technique. - Steps in Delphi technique are :a. Identify the problems.b. Members are instructed to provide solutions through a series of specifically designed questionnaires.c. Every members completes the questionnaire in private.d. The results of the first questionnaire are compiled in one location and duplicated.e. The compiled resulted are given to all members.f. Members are instructed to propose a solution ones again.g. Repeat steps E and F until decision is achieved

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