Decision Making : Management Function

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Decision Making

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Decision Making : Management Function

  1. 1. Managerial Decision Making
  2. 2. Managerial decision making• Decision-making is the process by which acourse of action is selected as the way to dealwith a specific problem.• Managers are usually evaluated and rewarded onthe basis of the importance and results of theirdecisions
  3. 3. Types of Decisions
  4. 4. Significance and limitations of rationaldecision-making• The process of rational decision-making is verysimilar to the process of strategic planning.
  5. 5. Significance of rational decision-making• Managers who use a rational, intelligent andsystematic approach are more likely to come upwith high quality solutions.• They have a clear understanding of alternativecourses of action
  6. 6. Significance of rational decision-making• It is based on the information available with thedecision-makers and their ability to evaluatealternatives• Rational decision-making aims a deciding thebest solution
  7. 7. Level of managers responsible formaking decisionsMiddle –Level ManagementLower-Level ManagementUpper-Level ManagementNarrowIntermediateDecision Broad Decision
  8. 8. Limitations of rational decision-making• Difficult for managers to be completely rational• Difficult to determine all the alternative coursesof action• Difficult to implement in areas not ventured into
  9. 9. Limitations of rational decision-making• All possible alternatives cannot be thoroughlyanalyzed• Limitation of information, time and certaintycurb rationality• Risk avoiding tendency disrupts their rationaldecision-making process
  10. 10. Decision-making process• Identify the problem• Scanning stage• Categorization stage• Diagnosis stage• Identify resources• Generate alternative solutions• Brainstorm
  11. 11. Decision-making process• Evaluate alternatives• Implement the decision• Monitor the decision
  12. 12. How to make a business plan• The following steps are followed in the processof making a business plan:• 1. Understanding your business - SituationAnalysis• 2. What do “you” want? – Forming PersonalObjectives• 4. Forming the right business objectives
  13. 13. How to make a business plan• 5. Forming Strategies And Tactics•6. Written Document• 7. Review & Control and back to Step 1

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