Decision Making

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Decision Making- An essence to problem solving By: Prashant M Shah


DEFINITION What is Decision Making? In simple Terms- It is the process of selecting from several choices products or ideas, and taking action.

Organisational Decision making : 

Organisational Decision making “ the process of responding to a problem by searching for and selecting a solution or course of action that will create value for organisational stakeholders”. There are basically two kinds of decision that managers called upon to make: Programmed and non-programmed

Types of Problems and Decisions : 

Types of Problems and Decisions Structured problems * Involved goals that clear. *Are familiar(have occurred before) *Are easily and completely defined- information about the problem is available and complete. Programmed decision *A repetitive decision can be handled by a routine approach.

Problems and Decisions : 

Problems and Decisions Unstructured problems * Problems that are new or unusual and for which information is ambiguous or incomplete. * Problems that will require custom-made solutions. Non-programmed decisions * Decision that are unique and nonrecurring. * Decision that generate unique responses.

Types of Programmed Decisions : 

Types of Programmed Decisions Policy * a general guideline for making a decision about a structured problem. Procedure * A series of interrelated steps that a manager can use to respond ( applying a policy) to a structured problem. Rule * an explicit statement that limits what a manager or employee can or cannot do.

Programmed vs. Non-programmed Decisions : 

Programmed vs. Non-programmed Decisions

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Different Types of Decision Making

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The following are the most common types of decision making styles that a manager in a business or even a common man might have to follow. 1) Irreversible: These decisions are permanent. Once taken, they can't be undone. The effects of these decisions can be felt for a long time to come. Such decisions are taken when there is no other option.

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Reversible: Reversible decisions are not final and binding. In fact, they can be changed entirely at any point of time. It allows one to acknowledge mistakes and fresh decisions can be taken depending upon the new circumstances. Delayed: Such decisions are put on hold until the decision maker thinks that the right time has come. The wait might make one miss the right opportunity that can cause some loss, specially in the case of businesses. However, such decisions give one enough time to collect all information required and to organize all the factors in the correct way.

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Quick Decisions: These decisions enable one to make maximum of the opportunity available at hand. However, only a good decision maker can take decisions that are instantaneous as well as correct. In order to be able to take the right decision within a short span of time, one should also take the long-term results into consideration. Experimental: One of the different types of decision making is the experimental type in which the final decision cannot be taken until the preliminary results appear and are positive. This approach is used when one is sure of the final destination but is not convinced of the course to be taken.

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6)Trial and Error: This approach involves trying out a certain course of action. If the result is positive it is followed further, if not, then a fresh course is adopted. Such a trail and error method is continued until the decision maker finally arrives at a course of action that convinces him of success. This allows a manager to change and adjust his plans until the final commitment is made. 7)Conditional: Conditional decisions allow an individual to keep all his options open. He sticks to one decision so long as the circumstances remain the same. Once the competitor makes a new move, conditional decisions allow a person to take up a different course of action.

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Types of Decision Making for Leaders

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A leader gives direction to people to follow. He is responsible for ensuring that his decision provides the right direction to the organization. Be it in a business or in other organizations, decision making is an important component of leadership skills. The different types of decision making that a leader typically encounters are:

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Authoritative: In authoritative type of decision making the leader is the sole decision maker which subordinates follow. The leader has all the information and expertise required to make a quick decision. It is important that the leader is a good decision maker as it is he who has to own up to the consequences of his decision. Though effective, in case the leader is an experienced individual, it can harm the organization if the leader insists on an authoritative type of decision making even when there is expertise available within the team. Facilitative: In facilitative type of decision making, both the leader and his subordinates work together to arrive at a decision. The subordinates should have the expertise as well as access to the information required to make decisions. Such an approach could be useful when the risk of wrong decision is very low. It is also a great way of involving and encouraging subordinates in the working of the organization.

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Consultative: As the name suggests, consultative decisions are made in consultation with the subordinates. However, the fact remains that unlike in the facilitative decision making style, in consultative decision making it is the leader who holds the decision making power. A wise leader tends to consult his subordinates when he thinks that they have valuable expertise on the situation at hand. Delegative: As per the term, the leader passes on the responsibility of making decisions to one or more of his subordinates. This type of decision making is usually adopted by the leader when he is confident of the capabilities of his subordinates.

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Thank You