Decision Making in Management

Decision Making in Management

Definition: Decision making is the process of selecting a course of action from multiple options, based on available information, to achieve a specific goal or solve a problem.

Types of Decisions:

• Programmed Decisions: Routine, repetitive, and well-structured decisions made using established procedures and rules.
• Non-Programmed Decisions: Unique, complex, and unstructured decisions requiring creative problem-solving and judgment.

Decision Making Process:

1. Problem Identification: Recognize and define the problem or opportunity.
2. Information Gathering: Collect relevant data and information.
3. Alternative Generation: Develop potential solutions or alternatives.
4. Alternative Evaluation: Analyze and compare the pros and cons of each alternative.
5. Choice: Select the best alternative.
6. Implementation: Put the chosen alternative into action.
7. Review and Feedback: Monitor and evaluate the outcome, and make adjustments as needed.

Decision Making Models:

• Rational Model: A systematic, step-by-step approach to decision making, considering all available information and options.
• Behavioral Model: A more realistic approach, acknowledging cognitive biases and limitations in decision making.
• Intuitive Model: A fast, instinctive approach, relying on experience and intuition.

Decision Making Styles:

• Autocratic: One person makes the decision, without input from others.
• Democratic: Involves input and consensus from multiple individuals or groups.
• Consultative: The decision maker seeks input from others, but makes the final decision.

Factors Influencing Decision Making:

• Cognitive Biases: Systematic errors in thinking, such as confirmation bias or anchoring bias.
• Emotional Influences: Personal feelings and emotions that can affect decision making.
• Organizational Culture: The values, norms, and expectations of the organization.
• Time Constraints: The pressure to make a decision within a limited timeframe.

Decision Making in Management

Definition and Types of Decisions

• Decision making is the process of selecting a course of action from multiple options to achieve a specific goal or solve a problem.
• There are two types of decisions:
• Programmed Decisions: Routine, repetitive, and well-structured decisions made using established procedures and rules.
• Non-Programmed Decisions: Unique, complex, and unstructured decisions requiring creative problem-solving and judgment.

Decision Making Process

• The decision making process consists of seven steps:
• Problem Identification: Recognize and define the problem or opportunity.
• Information Gathering: Collect relevant data and information.
• Alternative Generation: Develop potential solutions or alternatives.
• Alternative Evaluation: Analyze and compare the pros and cons of each alternative.
• Choice: Select the best alternative.
• Implementation: Put the chosen alternative into action.
• Review and Feedback: Monitor and evaluate the outcome, and make adjustments as needed.

Decision Making Models

• There are three decision making models:
• Rational Model: A systematic, step-by-step approach to decision making, considering all available information and options.
• Behavioral Model: A more realistic approach, acknowledging cognitive biases and limitations in decision making.
• Intuitive Model: A fast, instinctive approach, relying on experience and intuition.

Decision Making Styles

• There are three decision making styles:
• Autocratic: One person makes the decision, without input from others.
• Democratic: Involves input and consensus from multiple individuals or groups.
• Consultative: The decision maker seeks input from others, but makes the final decision.

Factors Influencing Decision Making

• Cognitive Biases: Systematic errors in thinking, such as confirmation bias or anchoring bias.
• Emotional Influences: Personal feelings and emotions that can affect decision making.
• Organizational Culture: The values, norms, and expectations of the organization.
• Time Constraints: The pressure to make a decision within a limited timeframe.

Learn about the process of decision making in management, including the different types of decisions such as programmed and non-programmed decisions.