DECISION MAKING 2.ppt 3

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decision making by jawad khan

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DECISION MAKING By: JAWAD KHAN

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“A thought process of selecting a logical choice from the available options is called decision making.”

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Every decision making process produce a final choice .the output can be an action or an opinion of choice.

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It is very useful for the operation of the organisational activities. All the managerial functions such as planning, organizing, directing and controlling are determined by the decision.  

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whenever you see a successful business, some one once made a courageous decision. (Peter F.drucker)

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TYPES OF DECISION

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Programmed Decisions   These are standard decisions which always follow the same routine. As such, they can be written down into a series of fixed steps which anyone can follow. They could even be written as computer program.  

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2. Non-Programmed Decisions.  These are non-standard and non-routine. Each decision is not quite the same as any previous decision. Unusual situations that have not been often addressed. No rules to follow since decision is new. Decisions are made based on information, and managers intuition and judgment. e.g. deciding should the firm invest in a anew technology. Decision about new facilities, new products,labour contracts and legal issues .

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3 . Strategic Decisions.   Describes the process of creating companies mission and objectives and deciding upon the course of action a a company should pursue to achieve those goals. e .g Pizza restaurant might have the objective of increasing sales and deciding to implement strategy of offering lower prices. After a month managers look at sales and evaluate weather strategy resulted in increasing sales and than choose to keep the new price scheme or alter their strategy.

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4. Tactical Decisions.   These are medium-term decisions about how to implement strategy. e>g what kind of marketing to have, or how many extra staff to recruit Strategic decision may be to become market leader in their field .

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5. Operational Decisions.   These are short-term decisions (also called administrative decisions) about how to implement the tactics e.g. which firm to use to make deliveries. Day to day decision made by junior managers that are simple and routinely practice. E.g. regular ordering of supplies creation of new staff .  

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DECISION MAKING PROCESS

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Before making any decision the organization has to identify exactly what the problem is What exactly is the problem ? What is need for taking decision ? Does the problem have a deadline or a specific positive line ? IDENTIFICATION OF PROBLEM

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Managers seek out a range of information to clarify their options once they have identified an issue that requires a decision. INFORMATION GATHERING

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Decision criteria are factors that are Important (relevant ) to resolving the problem . So the factors which are relevant in decision making are. Salary Opportunity to progress Job environment Incentives Facilities Job securities Location Timings DECISION CRITERIA

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decision maker must weight the item in order to give them correct priority in decision. ALLOCATION OF WEIGHT TO CRITERIA

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Manager must identify or develop feasible alternate courses of action .if good alternate are missed the resulting decision is poor DEVELOPMENT OF ALTERNATIVE

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What are the advantages and disadvantages of each alternative? Manager must evaluate : Is it legal. Is it ethical. Is it economically feasible. Is it practical. EVALUATION OF ALTERNATIVE

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The manager then converts decision into a plane or a sequence of activities .manager must execute his plan by himself or with the help of subordinates. Very often a decision is made and not implemented IMPLEMENTATION

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Evaluate the outcomes of your decision .manager must always monitor the result of strategic decisions . OUTCOMES OF DECISION

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Manager should consider what went right and wrong with the decision and learn for future . Without feedback manager never learn from experience and might repeat the same mistake.   LEARN FROM FEEDBACK

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Policy decision long term complex How to achieve policy medium term Day to day decision LEVEL OF DECISION

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Decision-Making Styles for Organizations There are mainly 4 styles for decision making in different organization.

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Top-Down Decision-Making this type of decision-making often accompanies a top-down management style where the heads of an organization make the decisions and pass them down to other members of the organization to implement.

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Bottom-Up Decision-Making Bottom-up decision-making takes the opposite approach of top-down decision-making Instead of leaving organization heads to make decisions on their own, input from multiple levels is considered in the process. While the heads of an organization still make the final decision

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Representative Decision- Making Representative decision-making takes the decision-making power out of the hands of an organization's head and gives it to a group that represents multiple facets of the organization.

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Quantitative vs. Qualitative Decision-Making Quantitative decision-making looks at facts and numbers in order to come up with a decision. Qualitative decision-making focuses on experience and considers other aspects, such as employee feelings and customer relationships. A successful organization will combine the two types of decision-making in order to make decisions that are beneficial to the future of the organization.

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