Decision-Making: concept, process and techniques

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DECISION MAKING is an essential part of planning. Decision making and problem solving are used in all management functions, although usually they are considered a part of the planning phase. A discussion of the origins of management science leads into one on modeling, the five-step process of management science, and the process of engineering problem solving.

Decision-making is an integral part of modern management. Essentially, Rational or Sound decision making is taken as primary function of management. Every manager takes hundreds and hundreds of decisions subconsciously or consciously making it as the key component in the role of a manager. Decisions play important roles as they determine both organizational and managerial activities. A decision can be defined as a course of action purposely chosen from a set of alternatives to achieve organizational or managerial objectives or goals. Decision making process is continuous and indispensable component of managing any organization or business activities. Decisions are made to sustain the activities of all business activities and organizational functioning.

Relation to Planning

Managerial decision making is the process of making a conscious choice between two or more rational alternatives in order to select the one that will produce the most desirable consequences (benefits) relative to unwanted consequences (costs). If there is only one alternative, there is nothing to decide.

If planning is truly “deciding in advance what to do, how to do it, when to do it, and who is to do it” , then decision making is an essential part of planning. Decision making is also required in designing and staffing an organization, developing methods of motivating subordinates, and identifying corrective actions in the control process. However, it is conventionally studied as part of the planning function, and it is discussed here.

Occasions for Decision

the occasions for decision originate in three distinct fields:

(a) from authoritative communications from superiors;

(b) from cases referred for decision by subordinates; and

Types of Decisions

TYPES OF DECISIONS:

PROGRAMMED DECISIONS:

Programmed decisions are routine and repetitive, and the organization typically develops specific ways to handle them. A programmed decision might involve determining how products will be arranged on the shelves of a supermarket. For this kind of routine, repetitive problem, standard arrangement decisions are typically made according to established management guidelines.

NON PROGRAMMED DECISIONS:

Non programmed decisions are typically one shot decisions that are usually less structured than programmed decision.

Decision Making under Certainty

Decision making under certainty implies that we are certain of the future state of nature (or we assume that we are). (In our model, this means that the Probability p of future N is 1.0, and all other futures have zero probability.) The solution, naturally, is to choose the alternative A that gives us the most favorable outcome O . Although this may seem like a trivial exercise, there are many problems that are so complex that sophisticated mathematical techniques are needed to find the best solution.,

Decision-making is the process of choosing between two or more alternatives. It is a complex process that involves many factors, including the decision-maker’s values, beliefs, and goals.

There are many different types of decisions, but they can be broadly divided into two categories: programmed decisions and non-programmed decisions. Programmed decisions are routine decisions that can be made using a set of rules or procedures. Non-programmed decisions are complex decisions that require the decision-maker to use creativity and judgment.

The process of decision-making can be divided into six steps:

Identifying the problem. The first step in decision-making is to identify the problem that needs to be solved. This may seem like a simple step, but it is often the most difficult. The problem may be something that is happening in the external Environment, such as a change in the market, or it may be something that is happening within the organization, such as a decrease in productivity.
Generating alternatives. Once the problem has been identified, the next step is to generate alternatives. This is where the decision-maker comes up with a list of possible solutions to the problem.
Evaluating alternatives. The next step is to evaluate the alternatives. This involves assessing the pros and cons of each alternative and determining which one is the best solution to the problem.
Choosing an alternative. Once the alternatives have been evaluated, the decision-maker must choose one of them. This is often the most difficult step in the decision-making process, as there is often no clear-cut best alternative.
Implementing the decision. Once an alternative has been chosen, it must be implemented. This involves putting the decision into action and making sure that it is carried out effectively.
Evaluating the decision. The final step in the decision-making process is to evaluate the decision. This involves assessing whether the decision was successful in solving the problem.

There are many different techniques that can be used to help with decision-making. Some of the most common techniques include brainstorming, nominal group technique, Delphi technique, decision tree, probability tree, game theory, cost-benefit analysis, multi-criteria decision analysis, simulation, optimization, heuristics, and decision support systems.

Brainstorming is a technique that is used to generate a large number of ideas. It is a group technique, and it involves participants generating ideas without criticism or judgment.

The nominal group technique is a group technique that is used to generate and evaluate ideas. It is similar to brainstorming, but it involves participants generating ideas individually and then sharing them with the group.

The Delphi technique is a technique that is used to obtain a consensus from a group of experts. It is a non-meeting technique, and it involves participants submitting their ideas and then receiving feedback from the other participants.

A decision tree is a graphical representation of the possible outcomes of a decision. It can be used to help decision-makers assess the risks and benefits of different alternatives.

A probability tree is a graphical representation of the probability of different outcomes of a decision. It can be used to help decision-makers assess the risk of different alternatives.

Game theory is a branch of mathematics that is used to study strategic interactions. It can be used to help decision-makers understand the likely behavior of other decision-makers in a given situation.

Cost-benefit analysis is a technique that is used to compare the costs and benefits of different alternatives. It can be used to help decision-makers make the most efficient choice.

Multi-criteria decision analysis is a technique that is used to compare different alternatives based on multiple criteria. It can be used to help decision-makers make the most comprehensive choice.

Simulation is a technique that is used to model a system or process. It can be used to help decision-makers understand the likely outcomes of different decisions.

Optimization is a technique that is used to find the best solution to a problem. It can be used to help decision-makers make the most efficient choice.

Heuristics are rules of thumb that are used to make decisions. They can be helpful in making quick decisions, but they can also lead to suboptimal decisions.

Decision support systems are computer-based systems that are used to help decision-makers make decisions. They can provide decision-makers with information, analysis, and recommendations.

Decision-making is a complex process that involves many factors. There is no one-size-fits-all approach to decision-making, and the best approach will vary depending on the situation. However, by understanding the different steps in the decision-making process and the different techniques that can be used, decision-makers can improve their chances of making effective decisions.

What is decision-making?

Decision-making is the process of choosing between two or more alternatives. It is a complex process that involves many factors, including the decision-maker’s values, beliefs, and goals.

What are the different types of decision-making?

There are two main types of decision-making: programmed and non-programmed. Programmed decisions are made in response to recurring problems that have a clear solution. Non-programmed decisions are made in response to new or unusual problems that do not have a clear solution.

What are the steps in the decision-making process?

The decision-making process can be divided into six steps:

Define the problem.
Identify the alternatives.
Evaluate the alternatives.
Select the best alternative.
Implement the decision.
Evaluate the decision.

What are some decision-making techniques?

There are many decision-making techniques, including brainstorming, the Delphi technique, and the nominal group technique. Brainstorming is a technique for generating ideas. The Delphi technique is a technique for gathering and evaluating expert opinions. The nominal group technique is a technique for generating and evaluating ideas in a group setting.

What are some common decision-making errors?

Some common decision-making errors include:

The availability heuristic is the tendency to judge the probability of an event by how easily examples come to mind.
The representativeness heuristic is the tendency to judge the probability of an event by how similar it is to other events.
The anchoring bias is the tendency to rely too heavily on the first piece of information that is presented.
The confirmation bias is the tendency to seek out information that confirms one’s existing beliefs.
The sunk cost fallacy is the tendency to continue investing in a losing proposition because of the Money or time that has already been invested.

What are some tips for making better decisions?

Some tips for making better decisions include:

Take your time. Don’t rush into a decision. Give yourself time to think about all of the Options and their consequences.
Gather information. The more information you have, the better equipped you will be to make a decision.
Consider all of your options. Don’t just focus on the first option that comes to mind. Consider all of your options and their pros and cons.
Talk to others. Talk to people who have experience with the decision you need to make. They can offer you valuable advice.
Trust your gut. Sometimes, you just have to go with your gut feeling. If you have a strong feeling about something, go with it.
Be prepared to make mistakes. Everyone makes mistakes. The important thing is to learn from your mistakes and make better decisions in the future.

Decision-Making: Concept, Process, and Techniques

Decision-making is the process of choosing between two or more alternatives. It is a complex process that involves many factors, including the decision-maker’s values, beliefs, and goals.

The decision-making process can be divided into four steps:

Identifying the problem. The first step is to identify the problem that needs to be solved. This may seem like a simple step, but it is often the most difficult. The problem may be a specific issue, such as choosing a new car, or it may be a more general issue, such as deciding what career to pursue.
Generating alternatives. Once the problem has been identified, the next step is to generate alternatives. This involves brainstorming possible solutions to the problem. It is important to generate as many alternatives as possible, even if they seem unrealistic at first.
Evaluating alternatives. The next step is to evaluate the alternatives. This involves assessing the pros and cons of each alternative. It is important to consider all of the factors that are relevant to the decision, such as the cost, the time involved, and the potential risks and benefits.
Making a decision. The final step is to make a decision. This involves choosing one of the alternatives. It is important to choose the alternative that is most likely to solve the problem.

There are many different techniques that can be used to make decisions. Some of the most common techniques include:

Brainstorming. Brainstorming is a technique that is used to generate ideas. It involves a group of people coming up with as many ideas as possible, without judgment.
Cost-benefit analysis. Cost-benefit analysis is a technique that is used to compare the costs and benefits of different alternatives.
Decision matrix. A decision matrix is a tool that can be used to evaluate alternatives. It involves listing the alternatives, the criteria that will be used to evaluate them, and the scores for each alternative on each criterion.
Decision tree. A decision tree is a tool that can be used to visualize the different possible outcomes of a decision. It involves listing the possible outcomes, the probabilities of each outcome, and the value of each outcome.

Decision-making is a complex process that involves many factors. There is no one-size-fits-all approach to decision-making. The best approach will vary depending on the situation.

Questions

Which of the following is not a step in the decision-making process?
(A) Identifying the problem
(B) Generating alternatives
(C) Evaluating alternatives
(D) Making a decision
Which of the following is a technique that is used to generate ideas?
(A) Brainstorming
(B) Cost-benefit analysis
(C) Decision matrix
(D) Decision tree
Which of the following is a tool that can be used to evaluate alternatives?
(A) Brainstorming
(B) Cost-benefit analysis
(C) Decision matrix
(D) Decision tree
Which of the following is a tool that can be used to visualize the different possible outcomes of a decision?
(A) Brainstorming
(B) Cost-benefit analysis
(C) Decision matrix
(D) Decision tree
Which of the following is the best approach to decision-making?
(A) There is no one-size-fits-all approach to decision-making. The best approach will vary depending on the situation.
(B) The best approach is to always use brainstorming.
(C) The best approach is to always use cost-benefit analysis.
(D) The best approach is to always use decision matrices.