DECISION MAKING

OUTLINE
1. Meaning of Decision making
2. Features of Decision making
3. Roles of Decision making
4. Types of Decision making
5. Procedures of Decision making
6. Decision Making Options
7. Common Faults in Decision Making

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 MEANING OF DECISION MAKING

 Decision making is the process of choosing

the course of action from among set of
alternatives to achieve a desired goal. It
consists of activities a manager performs to
come to a conclusion.
 Decision making is the process of selecting
the aim is to select the best alternative.
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 This process consist of four interrelated

phases;
 Explorative - searching for decision
occasions),
 Speculative - identifying the problem
the factors affecting the decision
problems)
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 Evaluative - analyzing and

weighing alternative courses of
action), and
 Selective - choice of the best
course of action).

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 Feature of Decision Making

 Decision making is a goal oriented

process. Decisions are made to achieve
some goal or objective. The intention is to
move toward some desired state of affairs.
There may be a decision not to decide.
 It implies set of alternatives. A decision
problem arises only when there are two or
more alternatives. If there is only one
alternative, there is no decision to be made.

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 Decision making is a dynamic process. It

involves time dimension and time lag. It is
situational depending on the technique and the
problem.
 It is always related to the environment. A
manager may take one decision in a particular
situation and quite another in a different
situation.

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 It implies freedom to the decision maker

regarding the final choice. It also involves
commitment of resources in specific
ways.
 Decision making is intellectual or
rational process. Decisions are the
products of deliberations, reasoning, and
evaluation. However, cannot completely
be quantified.
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 Itis a continuous or ongoing

process. Managers have to
take a series of decision-
making exercise.

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 Role of Decision Making

 Is a vehicle for carrying managerial work

load and discharging managerial
responsibilities. It is through decision making
that managers strive to achieve
organizational goals.
 It is the heart of planning where managers’
life is perpetual decision making activity. Any
business executive is by professional a
decision maker.
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 It is a pervasive because it is
performed at all levels of
management.
 Decision making is a primary task
of management.

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 Types of Decision Making;
1. Programmed decision – are routine decisions or
structured decision. They are repetitive in nature.
For example pressing a purchase order for materials. The
decision maker needs not to ask anything from the personnel
manager. They are done at lower levels.

2. Non- programmed decisions - deal with unusual

problems. Such as development of a new product,
opening of a new branch, location of plant etc
there are no readymade answers for such
problems.

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3. Routine decision – are also called operating

decisions and they are day-to-day operation of
business. They are made at the lower levels of
management standard procedures are established
to make such decisions.

4. Strategic or Policy decision – involve long term

commitments and large investment. They deal with
unique problems and policy issues e.g. Lounging a
new product, location of a new plant etc.

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5. Individual decision making – a single

individual decides and implement it in the
organization.
6. Personal decision – the decision maker
takes a decision for his personal life which is
known as personal decision.

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7. Organizational decision – are made

to further the interest of the
organization.
8. Group decision – it is taken by a
group of people for instance Board of
Directors.

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 STEPS IN SCIENTIFIC DECISION
MAKING

 Identify the problem: it begins with problem

recognition that requires a decision. A manager
should identify the problem and define the real
problem.
 Diagnose the problem: analyzing it in terms of its
elements, magnitude, its urgency, its causes, and
its relation with other problems. In order to analyze
them careful the manager should obtain all
necessary facts. The most important is to find the
real causes and sources of the problem.

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 Discover Alternatives: Search for various possible

alternatives. An executive should not jump on the first feasible
alternative to solve the problem quickly. The best alternative
should be considered before course of action.
 Evaluate Alternatives: once alternatives are discovered, the
next stage is to evaluate or screen each feasible alternative. It
refers to the process of measuring positive and negative
consequences of the chosen alternatives. Cost benefit analysis
should be considered.

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 Select the best alternative: The manager can now

select the best alternative after careful evaluation.
Optimum alternative that will maximize the results
under given conditions. This is a critical stage
because the ability to select the best alternative
separates the successful manager from
unsuccessful one.
 Implementation and Follow up: Decision making
process comes to an end with the actual
implementation of decision. It involves several
stages;

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First the decision should be

communicated to those responsible to
its implementation
 Secondly, acceptance of the decision
should be obtained.
 Thirdly, procedures and time sequence
should be established for
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implementation.
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 Necessary resources should be

assigned to individuals.
 The implementation should be
constantly monitored and decisions
not yielding the desired results
necessary changes should be made.

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 DECISION MAKING PROCESS

Identify the Diagnose the Discuss

alternative
Problem Problem
course of
action

Implementatio Choose the Evaluate the

n and follow Best Alternatives
up alternative

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 COMMON FAULTS IN
DECISION MAKING
These are mistakes done by
leaders/managers while making
decisions.
 Hurried decision – decisions are
made either under pressure or
insufficient data.
 Indecision – being afraid to
commit for firm decisions.
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 Risk–aversion-making decisions that

is comfortable but not necessary the
best solution.
 “Analysis paralysis” – prolonging the
processing of searching information for
decision.
 Delayed decision – making decision
when it is tool late.

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 Failure to communicate decision –

not letting all who needs to know have
all the information when they need it.
 Taking narrow perspective of the
problem- failure to think broadly and
logically of the problem solver.

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 DECISION MAKING OPTIONS

 Individual decision making – a leader makes

decisions him/her self as an individual where;
– S(he) has all information needed for the
problem.
– The decision is within her/his
scope/authority.
– Urgency or speed are important
consideration.

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 Referring Upward
– The decision is outside the authorized power.
– Information needed is only available at
higher level.
– A leader is not experienced is still under
training.
– Decision affects the area of the top authority.

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 Referring Downward – a leader will refer

downward if;
– He want the decision to be accepted by the
majority.
– Wants to use a process as a method of motivating
the staff.
– The decision is of low value and falls within the
manager’s delegation power.

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 No Decision made – sometimes the

problem is best left to resolve itself when;
– A decision will intensify matters.
– The cost of making decision is very
expensive while the matter is trivial.
– The problem is short – lived and given time
will resolve.

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 Thanks
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