Decision Making and Negotiations

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Decision Making and Negotiations

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Decision Making and Negotiations:

Decision Making and Negotiations Dr. G C Mohanta, BE, MSc(Engg), MBA, PhD(Mgt) Professor Al-Qurmoshi Institute of Business Management Hyderabad

Decision Making:

Decision Making Decision is the choice made from available alternatives. Decision making is the act of choosing one alternative from among a set of alternatives.

Characteristics of Decision-Making:

Characteristics of Decision-Making It is the choice of the best among alternatives after evaluation through critical appraisal. End process preceded by deliberation and reasoning . A mental process because the final selection is made after thoughtful consideration. Involves rationality because through decisions an endeavour is made to better one’s happiness. Aimed at achieving the objectives of the organisation. It involves a certain commitment which may be for short run or long run depending upon the type of decision. Decision relates to the means to the end.

Importance of Decision-Making:

Importance of Decision-Making Decision-making plays an important role in the mgmt of an organisation. Managers perform their functions and activities through decision-making. Making right decision at right time values much to the organisation. Helps the management to procure necessary data and information. Helps to initiate and complete the action of all the activities of the management at the right time. It also helps in the formation of strategies and implement them.

Process of Decision-Making:

Process of Decision-Making Identifying and describing the problem Collection of Data: available facts and figures. Formulation of a Model: objective and alternatives are developed; model becomes an analytical aid for making decision under different situations. Evaluation: after formulation of model we must evaluate it to see how far the model represents conditions of the real world/situation. Framing/ Selecting a Decision: after the possible outcomes of the course of action we select a particular course of action to cope with a particular problem; it called taking/making a decision. Follow-up/implementation of the Decision: plan follow-up strategies and actions, anticipate reactions.

Types of Decisions:

Types of Decisions A Programmed Decision A decision that recurs often enough for a decision rule to be developed A Nonprogrammed Decision A decision that recurs infrequently and for which there is no previously established decision rule

Negotiation in Organizations:

Negotiation in Organizations Negotiation The process in which two or more parties reach an agreement even though they have different preferences. Approaches to Negotiation Individual Differences Situational Characteristics Game Theory Cognitive Approaches Win-Win Negotiation

Individual Differences:

Individual Differences The negotiations depend on the personality traits of the negotiators. Traits, like demographic characteristics and personality variables. One who has the appropriate demographic characteristics or personality is selected for successful negotiation. But situational variables sometimes negates the effects of the individual differences.

Situational Characteristics:

Situational Characteristics Situational characteristics are the context within which negotiation takes place, including: Types of communication between negotiators, Potential outcomes of the negotiations, Relative power of the parties, Time frame available for negotiation and Presence of other parties The shortcomings of the situational approach are similar to those of the individual characteristics approach. 12- 9

Game Theory:

Game Theory Game Theory Developed by economists using mathematical models to predict all possible outcomes of negotiation situations . This approach, is usually unworkable in a real negotiation situation.

Cognitive Approaches:

Cognitive Approaches Cognitive approaches recognize that negotiators often depart from perfect rationality during negotiations This approach tries to predict how and when negotiators will make these departures.

Win-Win Negotiation:

Win-Win Negotiation Win-Win Negotiation It approaches to negotiation as an opportunity for both sides to be winners.

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