The document discusses various aspects of decision making including:
1) Decision making involves consciously choosing a course of action from two or more alternatives to deal with a specific problem or set of circumstances.
2) There are different types of decisions like programmed decisions which are routine, and non-programmed decisions which are unique problems without readymade solutions.
3) The decision making process involves selecting alternatives, evaluating them using both quantitative and qualitative factors, and analyzing risks. Tools like decision trees can help structure decision making.
The document discusses various aspects of decision making including:
1) Decision making involves consciously choosing a course of action from two or more alternatives to deal with a specific problem or set of circumstances.
2) There are different types of decisions like programmed decisions which are routine, and non-programmed decisions which are unique problems without readymade solutions.
3) The decision making process involves selecting alternatives, evaluating them using both quantitative and qualitative factors, and analyzing risks. Tools like decision trees can help structure decision making.
Copyright:
Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPT, PDF, TXT or read online from Scribd
The document discusses various aspects of decision making including:
1) Decision making involves consciously choosing a course of action from two or more alternatives to deal with a specific problem or set of circumstances.
2) There are different types of decisions like programmed decisions which are routine, and non-programmed decisions which are unique problems without readymade solutions.
3) The decision making process involves selecting alternatives, evaluating them using both quantitative and qualitative factors, and analyzing risks. Tools like decision trees can help structure decision making.
Copyright:
Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPT, PDF, TXT or read online from Scribd
choice to behave or to think in a particular way in a given set of circumstances. When a choice has been made, a decision has been made. • Process of choosing a course of action from two or more alternatives. • Process by which a course of action is selected as the way to deal with a specific problem. Rational Decision-making • Decisions are made for future –which is full of uncertainities • It involves opportunities to do something that has not been done before- difficult to come up with alternatives • All the alternatives cannot be analysed Limitations of Rational decision- making • Information • Time • certainity Types of Decisions • Programmed decisions - routine & repetitive and are made within the framework of organisational policies and rules • Non-Programmed Decisions – to solve unique, novel, unusual, non-recurring problems in which the various alternatives cannot be decided in advance. There are no readymade solutions available. • Strategic Decisions: choice of actions related to allocation of resources & contribution to the achievement of organisational objectives. – The decision is a major one – Contributes directly to the contribution of goals – Involves changes in earlier decisions concerning some organisational practices • Tactical Decision: derived out of strategic decision. – related to day-to-day operations – Mostly a programmed decision within the context of policies, rules, procedures etc – Outcome of the decision is of short-term nature and affects a narrow part of the organisation – Authority to take tactical decisions can be delegated to lower-level managers Decision-making Process • Selecting an alternative: – Experience- decisions must be evaluated against future events, experience belongs to the past – Experimentation- try out the alternatives to assess the outcome – Research & Analysis- collection of information and data and analyze the data • Evaluation of alternatives: ultimate decision-making point – Quantitative & qualitative factors – Marginal Analysis: compare additional revenues arising from additional costs – Cost effective analysis: finding the least costly way of reaching an objective or getting the greatest value for given expenditures Risk Analysis • Almost everything we do in today's business world involves a risk of some kind: customer habits change, new competitors appear, factors out of our control could delay the plans. • Risk analysis and risk management can help to assess these risks and decide what actions to take to minimize disruptions to our plans. • They also help to decide whether the strategies we would use to control risk are cost-effective. • We define risk as 'the perceived extent of possible loss'. • Different people have different views of the impact of a particular risk – what may be a small risk for one person may destroy the livelihood of someone else. Decision Tree Analysis • They provide a highly effective structure within which you can explore options, and investigate the possible outcomes of choosing those options. • They also help you to form a balanced picture of the risks and rewards associated with each possible course of action. • They are useful for choosing between different strategies, projects or investment opportunities, particularly when your resources are limited. Keep these in mind while taking decisions • Importance of decisions • Extent of responsibility • Resources involved • Degree of flexibility • Degree of certainty of goals & premise12s • Impact of decisions • Other factors – Personal values & organisation culture – Group decion-making – Creativity & innovation DSS-decision support systems Decision Support Systems (DSS) are a specific class of computerized information system that supports business and organizational decision-making activities. DSS is an interactive software-based system intended to help decision makers compile useful information from raw data, documents, personal knowledge, and/or business models to identify and solve problems and make decisions. DSS-decision support systems • Use of computers to facilitate the decision- making process of semi-structured tasks. • These are designed to make the decision process more effective • Technical professionals in cooperation with the managers design the system suitable for a particular position • Managers can manipulate data & explore the effectiveness of alternative courses of action