0% found this document useful (0 votes)
22 viewsDecision Making
Uploaded by
Amrteshwar KaurCopyright
© © All Rights Reserved
Available Formats
Download as PDF or read online on Scribd
0% found this document useful (0 votes)
22 viewsDecision Making
Uploaded by
Amrteshwar KaurCopyright
© © All Rights Reserved
Available Formats
Download as PDF or read online on Scribd
/ 40
DECISION MAKING
Decision-making is an integral part of modern management. Essentially,
Rational or sound decision making is taken as primary function of
management. Every manager takes hundreds and hundreds of decisions
subconsciously or consciously making it as the key component in the
role of a manager. Decisions play important roles as they determine both
organizational and managerial activities. A decision can be defined as a
course of action purposely chosen from a set of alternatives to achieve
organizational or managerial objectives or goals. Decision making
process is continuous and indispensable component of managing any
organization or business activities. Decisions are made to sustain the
activities of all business activities and organizational functioning.
Decisions are made at every level of management to ensure
organizational or business goals are achieved. Further, the decisions
make up one of core functional values that every organization adopts
and implements to ensure optimum growth and drivability in terms of
services and or products offered.
‘As such, decision making process can be further exemplified in the
backdrop of the following definitions.
DE ‘tion of Decision Making
1. Decision making is a deliberative and decisive social action,
concerned with choosing what to do in the face of a problem
[Adam, 2004].
. Decision making is a choice from among two or more alternative
courses of action, or objects, giving due regard to the advantages
and disadvantages of supporting information about each”
(Merriam Webster Dictionary, 2003)
. Decision making is a commitment to action, a discrete and
concrete phenomenon driven by rationality [Langaley et. Al,
1995].
n
w *s Dictiona
4, According to the Oxford Advanced rene Fee
(2011), the term decision making means - the p Fees ite
about something important, especially in a group of peop!
5. Trevatha & Newport (2010) define decision making —
follows:, “Decision-making involves the selection ofa oe
action from among two or more possible alternatives in order
{0 arrive at a solution for a given problem”.
As evidenced by the foregone definitions, decision making process Is a
consultative affair done by a comity of professionals to drive better
functioning of any organization. ‘Thereby, it is a continuous and dynamic
activity that Pervades all other activities pertaining to the organization.
Since it is an ongoing activity, decision making process plays vital
importance in the functioning of an organization. Since intellectual
minds are involved in the Process of decision making, it requires solid
scientific knowledge coupled with skills and experience in addition to
mental maturity,
and linear directions, It means that decision making process seeks a
goal. The goals are pre-set business objectives, company missions and
its vision. To achieve these goals, company may face lot of obstacles in
administrative, operational, marketing wings and operational domains.
Such problems are sorted out through comprehensive decision making
Process, No decision comes as end in itself, since in may evolve new
problems to solve. When one problem is solved another arises and so on,
such that decision making process, as said earlier, is a continuous and
dynamic, of time is consumed while decisions are taken. In a management
ing, decision cannot be taken abruptly. It should follow the steps
such as
1. Defining the problem
2. Gathering information and collecting data
3. Developing and weighing the options
4. Choosing best possible option
5. Plan and execute
6. Take follow up action
Since decision making process follows the above sequential steps, a lot
of time is spent in this process. This is the case with every decision taken
to solve management and administrative problems in a business setting.
Though the whole process is time consuming, the result of such process
in a professional organization is magnanimous.
DECISION MAKING IN AN ORGANIZATIONAL CONTEXT
Decision making is part of everyone’s life and all of us have to make
decisions every moment. Right from choosing what to wear to what to
eat to where we live and work and extending to whom we marry,
decisions are an integral part of our lives. In an organizational context,
it is worthwhile to note that decision making needs the right kind of
information, the complete information and the ability to synthesize
and make sense of the information. While the first two attributes
depend on external sources, the ability to make informed decisions is a
personality trait. Hence, successful CEO’s are those who can take into
account the different viewpoints and divergent perspectives and arrive at
the right decision.
The business landscape of the current times is littered with examples of
companies that have made strategic errors and these are mostly to do
with lack of proper decisions taken by the CEO’s and managers in these
firms. For instance, the failure of Chrysler and Ford (the automobile
3
My majors in the United States) to meet the challenge of competition from
Japanese auto majors like Toyota was mostly due to the lack of
imaginative decisions that would have responded to the threat ina
coherent manner. Of course, it is another matter that these companies
(Chrysler in particular) under the stewardship of Lee Iacocca were able
‘0 successfully meet the competition by the Japanese because of firm
decisions taken by him.
The other aspect that relates to decision making in an organizational
Context is that there must be complete and accurate information made
available to the decision maker. In Economics, there is a term called
“asymmetries of information” that indicates how incomplete and
insufficient information leads to poor decisions and wrong choices,
What this Concept means is that having partial information or faulty
information often leads to “analysis paralysis” which is another term for
Poor decision making abilities, Finally, even with reliable and accurate
The overriding rule in decision making is that the decision maker ought
to have legitimacy and authority over the people who he or she is
deciding upon. In other words, decision makers succeed only when their
decisions are honored and followed by the people or groups that the
decision impacts. The reason for mentioning this towards the end is that
in many cases, the fragmented nature of the organizations with different
interests represented by factions often undermines the decision making
capabilities of the decision maker. Hence, it is worth mentioning that
such authority must be vested with the decision maker,
Hence, it is clear that the topic of decision making encompasses several
elements (some of which have been briefly discussed in this article). We
hope to cover more of these elements in detail in the subsequent articles
and this article is thought of as setting the tone for the rest of the module
on decision making.
4 CHARACTERISTICS OF DECISION-MAKI NG
+ Objectives must first be established
+ Objectives must be classified and placed in order of importance
+ Alternative actions must be developed
« The alternatives must be evaluated agains
+ The alternative that is able to achieve al
tentative decision
«The tentative decision is evaluated for more possible consequences
« The decisive actions are taken, and additional actions are taken to
prevent any adverse consequences from becoming problems and
starting both systems (problem analysis and decision-making) all
over again i
There are steps that are generally followed that result in @ decision
model that can be used to determine an optimal production plan
. Ina situation featuring conflict, role-playing may be helpful for
predicting decisions to be made by involved parties.
1 all the objectives
I] the objectives is the
DIN DECISION MAKING
Seven most essential steps involved in decision making process are: Ie
Define the problem, 2. Analysing the problem, 3. Developing alternative
solutions, 4. Selecting the best type of alternative, 5. Implementation of
the decision, 6. Follow up, 7. Monitoring and feedback!
Decision-making is concerned with the selection of one alternative
course of action from two or more alternative courses of action.
Precisely it can be stifed as a choice-making activity.
fained as under:
e first and the foremost step in the decision-making process are to
define the real problem. A problem can be explained as a question for
5 should consider critical or
These factors are, in fact,
These are also known as
and appropriate solution. The ape
strategic factors in defining the problem.
obstacles in the way of finding proper solution.
limiting factors.
if a machine stops working due to non-availability of
screw, screw is the limiting factor in this case. Similarly fuse is a
limiting or critical factor in house lighting. While selecting alternative or
probable solution to the problem, the more the decision-making takes
into account those factors that are limiting or critical to the alternative
solutions, the easier it becomes to take the best decision.
For example,
Other examples of critical or limiting factor may be materials, money,
managerial skill, technical know-how, employee morale and customer
demand, political situation and government regulations, etc.
2. Analysing the problem:
After defining the problem, the next important step is a systematic
analysis of the available data. Sound decisions are based on proper
collection, classification and analysis of facts and figures.
There are three principles relating to the analysis and classification
as explained below:
(i) The futurity of the decision. This means to what length of time, the
decision will be applicable to a course of action.
(ii) The impact of decision on other functions and areas of the business.
(iii) The qualitative considerations which come into the picture.
3, Developing alternative solutions:
After defining and analysing the problem, the next step is to develop
alternative solutions. The main aim of developing alternative solutions is
6 to have the best possible decision out of the available alternative courses
of action. In developing alternative solutions the manager comes across
creative or original solutions to the problems.
In modern times, the techniques of operations research and computer
applications are immensely helpful in the development of alternative
courses of action.
4. Selecting the best type of alternative:
After developing various alternatives, the manager has to select the best
alternative. It is not an easy task.
The following are the four important points to be kept in mind in
selecting the best from various alternatives:
(a) Risk element involved in each course of action against the expected
gain.
(b) Economy of effort involved in each alternative, i.e. securing desired
results with the least efforts.
(c) Proper timing of the decision and action.
(d) Final selection of decision is also affected by the limited resources
available at our disposal. Human resources are always limited. We must
have right type of people to carry out our decisions. Their calibre ,
understanding, intelligence and skill will finally determine what they can
and cannot do.
5. Implementation of the decision:
Under this step, a manager has to put the selected decision into action.
For proper and effective execution of the decision, three things are
very important i.e. ——
(a) Proper and effective communication of decisions to the subordinates.
Decisions should be communicated in clear, concise and understandable
manner,
(b) Acceptance of decision by the subordinates is important. Group
Participation and involvement of the employees will facilitate the
smooth execution of decisions,
(c) Correct timing in the execution of decision minimizes the resistance
to change. Almost every decision introduces a change and people are
hesitant to accept ige. Implementation of the decision at the proper
time plays an important role in the execution of the decision.
system ensures the achievement of the objectives. It is
‘ough control. Simply stated it is concerned with the process
king the proper implementation of decision. Follow up is
indispensable so as to modify and improve upon the decisions at the
earliest opportunity.”
feans of determining the effectiveness of the
“If possible, a mechanism should be built which
Teports on the success of the implementation. In
addition, the “mechanisms should also serve as an instrument of
“preventive maintenance”, so that the problems can be prevented before
they occur.
According to Peter Drucker, the monitoring system should be such that
the manager can go and look for himself for first hand information
which is always better than the written reports or other second-hand
sources. In many situations, however, computers are very successfully ‘sed in monitoring since the information retieval process is very quick
accurate and in some instances the self-comrecting is instantaneous.
A variety of researchers have formulated similar prescriptive steps
aimed 28 improving decision-making.
1. Goals clarification: Survey values and objectives.
2. Options generation: Consider a wide range of altemative actions.
3, Vacts-Sinding: Search for information.
4, Consideration of Effects: Weigh the positive and negative
5. Review asd i ion: Plan how to implement the options
DECIDE
in 2006, Kei ished the DECIDE model of decision-
malting, which has six parts?
1. Define the pr
2. Kalish all the criteria (constraints)
3, Consider or Collect all the alternatives
4, Mdemify the best altemative
5, Develop and implement a o
6. Evaluate and monitor the solution and examine feedback when
necewary In 2007, Pam Brown of Singleton Hospital in Swansea, Wales, divided
the decision-making process into seven steps:
. Outline your goal and outcome.
. Gather data.
. Make the decision.
. Immediately take action to it
. Learn from and reflect on the decision.
nein aw
G
7
S
8
Z
3
2,
g
is
&
3
8.
5
3
MODELS OF DECISION MAKING
The decision-making process though a logical one is a difficult task. All
decisions can be categorized into the following three basic models.
(1) The Rational/Classical Model.
(2) The Administrative or Bounded Rationality Model.
(3) The Retrospective Decision-Making Model.
All models are beneficial for understanding the nature of decision-
making processes in enterprises or organisations. All models are based
on certain assumptions on which the decisions are taken.
1, The Rational/Classical Model:
The rational model is the first attempt to know the decision-making-
process. It is considered by some as the classical approach to understand
the decision-making process. The classical model gave various steps in
decision-making process which have been discussed earlier. Features of Classical Model:
1. Problems are clear.
2. Objectives are clear.
3. People agree on criteria and weights.
4. All alternatives are known.
5. All consequences can be anticipated.
6. Decision made are rational.
i. They are not biased in recognizing problems.
ii. They are capable of processing ail relevant information
iii. They anticipate present and future consequences of decisions.
iv. They search for all alternatives that maximizes the desired results.
2, Bounded Rationality Model or Administrative Man Model:
Decision-making involve the achievement of a goal. Rationality
demands that the decision-maker should properly understand the
alternative courses of action for reaching the goals.
He should also have full information and the ability to analyse properly
various alternative courses of action in the light of goals sought. There
should also be a desire to select the best solutions by selecting the
alternative which will satisfy the goal achievement.
Herbert A. Simon defines rationality in terms of objective and intelligent
action. It is characterised by behavioural nexus between ends and means.
If appropriate means are chosen to reach desired ends the decision is
rational. e concept developed by
ionalit is based on th Re
Bounded Rationality model is “vidual rationality in the
Herbert Simon. This model does not assume in!
decision process.
Instead, it assumes that people, while they may seek the best solution,
normally settle for much less, because the decisions they : confront
typically demand greater information, time, processing capabilities than
they possess. They settle for “bounded rationality or limited rationality
in decisions. This model is based on certain basic concepts.
a. Sequential Attention to alternative solution:
Normally it is the tendency for people to examine possible solution one
at a time instead of identifying all possible solutions and stop searching
once an acceptable (though not necessarily the best) solution is found.
6. Heuristic:
These are the assumptions that guide the search for alternatives into
areas that have a high probability for yielding success.
c. Satisficing:
Herbert Simon called this “satisficing” that is picking a course of action
that is satisfactory or “good enough” under the circumstances. It is the
tendency for decision makers to accept the first alternative that meets
their minimally acceptable requirements rather than pushing them
further for an alternative that produces the best results.
Satisficing is preferred for decisions of small significance when time is
the major constraint or where most of the alternatives are essentially
similar.
Thus, while the rational or classic model indicates how decisions should
be made (i.e. it works as a prescriptive model), it falls somewhat short
concerning how decisions are actually made (i.e. as a descriptive model).
2 3. Retrospective decision model (implicit favourite model):
This decision-makin
rationalise their choi
decisions. This mod
observation Tegardi
“students and noted
favorites (ie. the a
8 model focuses on how decision-makers attempt to
ces after they have been made and try to justify their
el has been developed by Per Soelberg. He made an
ing the job choice processes of graduating business
that, in many cases, the students identified implicit
ternative they wanted) very early in the recruiting
and choice process. However, students continued their search for
additional alternatives and quickly selected the best alternative.
The total process is designed to justify, through the guise of scientific
rigor, a decision that has already been made intuitively. By this means,
the individual becomes convinced that he or she is acting rationally and
taking a logical, reasoned decision on an important topic.
SIMON’S MODEL OF DECISION-MAKING
Herbert Simon made key contributions to enhance our understanding of
the decision-making process. In fact, he pioneered the field of decision
support systems. According to (Simon 1960) and his later work with
(Newell 1972), decision-making is a process with distinct stages. He
suggested for the first time the decision-making model of human beings.
His model of decision-making has three stages:
1. Intelligence which deals with the problem identification and the
data collection on the problem.
2. Design which deals with the generation of alternative solutions to
the problem at hand.
3. Choice which is selecting the 'best' solution from amongst the
alternative solutions using some criterion.
B ae ‘ | clearly.
‘The figure given below depicts Simon's decision-making mode
| Intetigence
eens ‘Insufficient Data
(No Satisfactory Solution |
Intelligence Phase:
This is the first step towards the decision-making process. In this
step the decision-maker identifies/detects the problem or
opportunity. A problem in the managerial context is detecting
anything that is not according to the plan, rule or standard. An
example of problem is the detection of sudden very high attrition for
the present month by a HR manager among workers. Opportunity
seeking on the other hand is the identification of a promising
circumstance that might lead to better results. An example of
identification of opportunity is-a marketing manager gets to know
that two of his competitors will shut down operation:
constant) for some reason in the next three months,
he will be able to sell more in the market,
's (demand being
» this means that
Thus, we see that either in the case of a
Opportunity seeking the decision-making process is initiated and the first
stage is the clear understanding of the stimulus that triggers this process.
So ifa problem/opportunity triggers this process then the first stage
deals with the complete understanding of the problem/opportunity.
Intelligence phase of decision-making Process involves:
a. ProblemSearching
b. Problem Formulation
problem or for the purpose of Problem Searching: For searching the problem, the reality or actual is
compared to some standards. Differences are measured & the
differences are evaluated to determine whether there is any problem or
not.
‘Problem Formulation: When the problem is identified, there is always
a risk of solving the wrong problem. In problem formulation,
establishing relations with some problem solved earlier or an analogy
proves quite useful.
Design Phase:
Design is the process of designing solution outlines for the problem.
Alternative solutions are designed to solve the same problem. Each
alternative solution is evaluated after gathering data about the
solution. The evaluation is done on the basic of criteria to identify
the positive and negative aspects of each solution. Quantitative tools
and models are used to arrive at these solutions. At this stage the
solutions are only outlines of actual solutions and are meant for
analysis of their suitability alone. A lot of creativity and innovation
is required to design solutions.
Choice Phase:
It is the stage in which the possible solutions are compared against one
another to find out the most suitable solution. The ‘best’ solution may be
identified using quantitative tools like decision tree analysis or
qualitative tools like the six thinking hats technique, force field analysis,
etc.
This is not as easy as it sounds because each solution presents a scenario
and the problem itself may have multiple objectives making the choice
15 Process a very difficult one. Also uncertainty about the outcomes and
Scenarios make the choice of a single solution difficult.
SATISFICING THEORY
Simon (1957) advanced the concept of bounded rationality where the
decision-maker has limited information, time and intellectual ability to
make a decision. Instead, the decision-maker work with limited and
simplified knowledge, to reach acceptable, compromise choices
(satisficing’), rather than pursue ‘maximizing’ or ‘optimizing’ strategies
in which one particular objective is fully achieved (Marshall, 1998). The
word “satisficing” goes contrary to the notion of optimization.
According to Simon, optimization does not exist in real world; instead,
we have ‘good enough’ alternatives, Williams (2002, p.15) contrasts the
Concept of bounded rationality to that of the rational decision-making
(refer to Table 2). The search for the best solution may be indefinite and
one will not wait for eternity hoping to find a solution that just fits and
completely covers all the areas. It establishes that the more information
searched, the higher is the collection cost; but cost minimization is
limited up to the point of discovery of a compromise (answer to the
challenge). For example, consider one looking for where to get and buy
a sofa set. Many sellers exist in the market but a buyer (i.e. decision
maker) will not travel all over the large market enquiring about price and
quality. He would rather enquire from the first five sellers and then settle
on one he views to be offering an acceptable product at his accepted
price. The cost for searching the whole market for a better quality and a
fair price item would raise the cost of obtaining the same. The time
required for the entire exercise might also be lacking. The theory,
therefore, asserts a general proposition that decision makers are better
off when they accept the compromise solution than searching
indefinitely for what one may term the ‘best’ solution. This theory is in
16 contrast to the SEU theory where all the available choices are assigned
utilities and probabilities, In this theory, the standards and parameters to
be met for a problem of choice are set, and then the first solution that
comes along and that emanates the qualities as detailed by the
parameters is selected. This implies that in the search for quality
furniture for a given price, the decision maker sets the desired quality
and the maximum amount he is willing to pay. The search, thus,
concludes the moment a combination of the two integrates. According to
Marshall (1998), the application of the satisficing models has been
useful in the theory of the firm and corporate behaviour. For instance, to
maximize its profits a firm needs complete information about its costs
and revenues, which is not readily available until the completion of an
event (e.g. financial year).
=
DECISION MAKING INDIVIDUAL AND GROUP
1, Individual Decision Making
4
Individuals have a tendency to think and question before performing.
This is fruitful in analysis and forecasting of individual’s behaviour.
Individual decision making has certain pros and cons, few of which are
mentioned below:
Pros of Individual Decision Making
+ An individual generally makes prompt decisions. While a group is
dominated by various people, making decision-making very time
consuming. Moreover assembling group members consumes lot of
time.
Individuals do not escape responsibilities. They are accountable for
their acts and performance. While in a group it is not easy to hold
any one person accountable for a wrong decision. i energy as
+ Individual decision making saves time, money ae ee
individuals make prompt and logical decisions sche eae
group decision making involves lot of time, money a ae Z
+ Individual decisions are more focused and rational a p'
group.
Cons of Individuat Decision Making
NS A group has potential of collecting more and full information
~ Compared to an individual while making decisions. oe
+ An individual while making any decision uses his own intuition
and views. While a group has many members, so many views and
many approaches and hence better decision making.
+ A group discovers hidden talent and core competency of
employees of an organization.
An individual will not take into consideration every members
interest. While a group will take into account interest of all
members of an organization.
pe
. GROUP DECISION-MAKING : Group decision making(also
known as collaborative decision-making) is a situation faced when
\_-- individuals collectively make a choice from the alternatives before
them. The decision is then no longer attributable to any single
individual who is a member of the group. This is because all the
individuals and social group processes such as social influence
contribute to the outcome. The decisions made by groups are often
different from those made by individuals. Group polarization is
one clear example: groups tend to make decisions that are more
extreme than those of its individual members, in the direction of
the individual inclinations.
nN Advantages of group decision making
1, More information: A group is better equipped as far as
information is concerned. An individual cannot have all the
information that is available to a group as it consists of several
individuals.
2. Diversity of views: A group always has the advantage of varied
views. This is because a group always has more than one member,
and since every member is unique, there is bound to be a variety in
their views also. This is also the reason why there are varied
approaches to solving a problem. As group decisions tend to cover
a greater area, they provide a better insight for decision-making.
3. Greater acceptability: The views expressed by a group have more
acceptance than those from an individual. This is because the
decisions are not imposed, but are part of a larger consensus (general
agreement). A group decision is automatically assumed to be more
democratic, and the decision of an individual can be perceived as
being autocratic (dictatorial).
may be some group decisions that require
4, Expert opinions: There
call them
expert opinion. The group can either include experts or can
from outside to form a separate group to take a decision on a
particular issue.
5, Degree of involvement: The members of a group feel involved
with a given problem. This minimizes their resistance. It strengthens
an organisation and facilitates decision-making.
6. Encourages people’s participation: A group usually provides a
platform for people to present their ideas. Group dynamics is more
likely to draw out participation from people who may otherwise be
hesitant to talk or interact. It encourages people to take an initiative as
they feel part of the decision-making process.
19 Usually there is no individual onus (burden) in the event of ee
which makes it easier for people to come up with suggestions a
solutions to problems. ~
1 Time-consuming: A group involves several individuals. Getting
them organised, planning and coordinating their meetings, defining
and explaining to them the purpose of a meeting and the goals, and
finally Teaching a solution or arriving at a decision can be quite
cumbersome. Making decisions in a group can, thus, be time-
consuming. The time loss involved in group dynamics cannot be
ignored.
2. Lack of onus: It is difficult to fix responsibility in a group. In an
organisation, it is often essential to fix responsibility before a problem
can be solved. It is difficult to do so if anything goes wrong with a
decision made by a group.
3. Individual domination: Quite often, discussions in a group are
dominated by a few members. Although a group discussion means a
collective discussion, some people usually manage to usurp (draw to
them) a position of informal leadership owing to their personality or
style of participation.
This position can also be because of the position held within the
organisation or simply because of self-confidence generated by
previous experiences. Sometimes only a few individuals dominate
and the others fade away in a group, thereby defeating the very
purpose of group discussion.
4. Compromise decisions: The need to arrive at a group decision
sometimes results in a compromise. The solution offered is not
essentially the best. It is, instead, a compromise acceptable as a mid-
point to all concerned. There are different demands and social
20 pressures, and members may agree to a proposal without really
evaluating it. Such support may not be wholehearted.
5. Expensive: Group decision-making is quite expensive in terms of
time, money, energy and man-hours. Many researchers point out that
the larger a group gets, the less is the individual contribution from
each member.
6. Groupism: The very word has negative connotations. Some
members of a group may start harbouring a feeling that they are
different from the others. This actually leads to informal groups
within the larger formal group, which may generate negative
sentiments towards other groups or people outside the group.
DECISION-MAKING TECHNIQUES
Decision-making techniques can be separated into two broad categories:
group decision-making techniques and individual decision-making
techniques. Individual decision-making techniques can also often be
applied by a group.
GROUP DECISION MAKING
According to B. Aubrey Fisher, there are four stages or phases that
should be involved in all group decision-making:
+ Orientation. Members meet for the first time and start to get to
know each other.
+ Conflict. Once group members become familiar with each other,
disputes, little fights and arguments occur. Group members
eventually work it out.
+ Emergence. The group begins to clear up vague opinions by
talking about them.
2 | and provide
+ Reinforcement, Members finally make Geto ee
justitication for it
proves the quality
cis said that establishing critical norms Ina group im y do
, A “ is NOTTS,
of decisions, while the majority of opinions (called consensu!
not,
Techniques for oc vase Ne
Some of the techniques employed to make the group decision eae
process more effective and decision making more efficient in whicl
creativity is encouraged, are as follows:
i Brainstorming:
This technique involves a group of people, usually between five and ten,
sitting around a table, generating ideas in the form of free association.
The primary focus is on generation of ideas rather them on evaluation of
ideas.
If a large number of ideas can be generated, then it is likely that there
will be a unique and creative idea among them. All these ideas are
written on the black board with a piece of chalk so that everybody can
see every idea and try to improve upon such ideas,
Brainstorming technique is very effective when the problem is
comparatively specific and can be simply defined. A complex problem
can be broken up into parts and each part can be taken separately at a
time.
ii, Nominal Group Technique (NGT):
Nominal group technique is similar to brainstorming except that the
approach is more structured. Members form the group in name only and
operate independently, generating ideas for solving the problem on their
own, in silence and in writing. Members do not interact with each other
22 So that strong personality domination is avoided. It encourages
individual creativity.
.e written ideas or writes then
The group coordinator either collects thes
ber to
on a large black board for everyone to see or he asks each mem
speak out and then he writes it on the black board as he receives it.
These ideas are then discussed one by one in turn and each participant is
encouraged to comment on these ideas for the purpose of clarification
and improvement. After all ideas are discussed, they are evaluated for
their merits and drawbacks and each participating member is required to
vote on each idea and assign it a rank on the basis of priority of each
alternative solution. The idea with the highest aggregate ranking is
selected as the final solution to the problem.
iii, Delphi Technique:
This technique is the modification of the nominal group technique,
except that it involves obtaining the opinions of experts physically
separated from each other and unknown to each other. This insulates
group members from the undue influence of others. Generally, the types
of problems handled by this technique are not specific in nature or
related to a particular situation at a given time. For example, the
technique could be used to understand the problems that could be
created in the event of a war. The steps in the Delphi technique are:
1. The problem is identified and a sample of experts is selected. These
experts are asked to provide potential solutions through a series of
carefully designed questionnaires.
2. Each expert completes and returns the initial questionnaire.
3. The results of the questionnaire are compiled at a central location and
the central coordinator prepares a second questionnaire based on the
previous answers.
23 4. Each member receives a copy of the results along with the second
questionnaire.
5. Members are asked to review the results and respond to the second
Ghestionnaire, The results typically trigger new solutions or cause
changes in the original position.
6. The process is Tepeated until a consensus is reached.
The process is very time consuming and is primarily useful in
illuminating broad Tange, long term complex issues such as future
effects of energy shortages that might occur.
iv. Didactic interaction:
This technique is applicable only in certain situations, but is an excellent
method when such a situation exists. The type of problem should be
such that it results in a yes-no solution. For example, the decision may
be to buy or not to buy, to merge or not to merge, to expand or not to
expand and so on. Such a decision requires an extensive and exhaustive
discussion and investigation since a wrong decision can have serious
consequences,
Since, in such a situation,
disadvantages of either of the
make the decision is split into
decision and the other favourin;
there must be advantages as well as
two alternatives, the group required to
two sub-groups, one favouring the “go”
ig the “no go” decision.
The first group lists all the “pros” of the problem solution and the second
group lists all the “cons”. These groups meet and discuss their findings
and their reasons. After the exhaustive discussions, the groups switch
sides and try to find weaknesses in their own original viewpoints. This
interchange of ideas and understanding of Opposing viewpoints results in
mutual acceptance of the facts as they exist so that a solution can be
24 buil
ta
final qu th
al dens. hese tat
decision is en and opinions relating to these facts and thus a
8. Elect
Virtually ne Meeting: Here, the
Call wi = Ae help of technolo,
client ec Tent. Create two or
close Clearly in the Skype c:
‘0 his expectations,
decision-making process takes place
gy. For instance, we can have a Skype
three strategies and discuss them with
all; let the client choose the strategy
Some Common Errors in Decision-Making:
Since the importance of the right decision cannot be overestimated
enough for the quality of the decisions can make the difference between
success and failure. Therefore, it is imperative that all factors affecting
the decision be Properly looked into and fully investigated.
In addition to technical and operational factors which can be quantified
and analyzed, other factors such as personal values, personality traits,
psychological assessment, perception of the environment, intuitional and
judgemental capabilities and emotional interference must also be
understood and credited.
Some researchers have pinpointed certain areas where managerial
thinking needs to be re-assessed and where some common mistakes are
made. These affect the decision-making process as well as the efficiency
of the decision, and must be avoided. :
5 Some of the errors are:
4. Indecisiveness:
Decision-making is full of responsibility. The fear of its outcome can
make some People timid about taking a decision. This timidity may
Tesult in taking a long time for making a decision and the Opportunity
may be lost. This trait is a personality trait and must be looked into
Seriously. The managers must be very quick in deciding.
b‘ Postponing the decision until the last moment:
This is a common feature which results in decision-making under
Pressure of time which generally eliminates the possibility of thorough
analysis of the problem which is time consuming as well as the
establishment and comparison of all alternatives. Many students, who
Postpone studying until near their final exams, usually do not do well in
the exams,
Even though some managers work better under pressures, most often an
adequate time period is required to look objectively at the problem and
make an intelligent decision. Accordingly, a decision plan must be
formulated; time limits must be set for information gathering, analysis
and selection of a course of action.
A failure to isolate the root cause of the problem:
It is a common practice to cure the symptoms rather than the causes. For
example, a headache may be on account of some deep-rooted emotional
problem. A medicine for the headache would not cure the problem. It is
necessary to separate the symptoms and their causes.
6 Sail
@A failure to
48sess the reliability of informational sources:
Ver
o : a
reliable om We take it for granted that the other person's opinion is very
inf and trustworthy and we do not check for the accuracy of the
‘Ormation ourselves.
Many a time, the opinion of the other person is taken, so that if the
decision fails to bring the desired results, the blame for the failure can be
shifted to the person who had provided the information. However, this is
@ poor reflection on the manager’s ability and integrity and the manager
must be held responsible for the outcome of the decision.
e. The method for analysing the information may not be the sound
one:
Since most decisions and especially the non-programmed ones have to
be based upon a lot of information and factors, the procedure to identify,
isolate and select the useful information must be sound and dependable.
Usually, it is not operationally feasible to objectively analyse more than
five or six pieces of information at a time.
Hence, a model must be built which incorporates and handles many
variables in order to aid the decision makers. Also, it will be desirable to
define the objectives, criteria and constraints as early in the decision-
making process as possible.
This would assist in making the process more formal so that no
conditions or alternatives would be overlooked. Following established
procedures would eliminate the efforts of emotions which may cloud the
process and rationality.
f Do implement the decision and follow through:
Making a decision is not the end of the process, rather it is a beginning.
Implementation of the decision and the results obtained are the true
27 barometer of the quality of the decision, Duties must be assigned
deadlines must be set, evaluation process must be established and
contingency plans must be prepared in advance, The decisions must be
implemented whole heartedly to get the best results, TYPES OF DECISIONS
1. Decision on Basis of Procedures:
a. Programmed Decisions:
Professor Herbert Simon has classified all managerial decisions as
programmed and non-programmed decisions. He has utilized
