Decision Making

Decision Making1OrganizationsOrganizations are systemsInvolve people, structure and a common purposeHave limited resourcesNeed to perform a series of functions to meet its objectivesWhat is decision-making?The word decision is defined as:A choice between two or more alternatives.Thus decision-making can be defined as:the selection of a course of action from among alternatives .Types of decision makingProgrammed & Non ProgrammedRoutine & Strategic DecisionsTactical & Operational Decisions

Programmed & Non ProgrammedProgrammedProblems of Repetitive natureTaken by Lower level ManagersEx:- purchase of Material, Supply of Goods

5Non ProgrammedNon ProgrammedDecision related to difficult situations for which there is no easy solutionsTaken by high level managersEx: opening of new branch , introducing new product.6Routine & Strategic DecisionsRoutine They are related to general functioning of the organizationThey do not require much evaluation and analysis and can be taken quickly.

7Strategic DecisionsThey are important which affects objectives , organizational goals and other important policy mattersIt involves huge investment of fundsThey are non repetitive in natureIt require careful analysis and evaluation8

Tactical & Operational Decisions

Decision related to various policy matters are policy decision or tactical decision.Taken by top managementDecision regarding location of plant9Operational DecisionsRelated to day-to-day functioning or operations of businessTaken by middle or lower level managersEx: decision regarding bonus to employee is policy decision , On the other hand if bonus is to be given to employee then its calculation of how is to be given is operational decision10Organizational & Personal Decision

Major & Minor decisions

Individual & Group Decisions11Decision-making ProcessIdentifying a problemIdentifying decision criteriaAllocating weights to criteriaDeveloping alternativesAnalyzing alternativesSelecting an alternativeImplementing the alternativeEvaluation (of decision effectiveness)Problem DefinitionProblem is a discrepancy (difference) between an existing and a desired state. Example:The manager has resigned, and we need another managerHere the phrase manager has resigned reflects the current state while need another manager represents a desired state.Identifying Decision CriteriaThe word criteria, is defined as a standard by which something can be judged. A decision criteria therefore, is the basis of a decision, which outlines the relevant and important factors for a decision. And implicitly, it also defines what is not important.Decision Criteria: ExampleIn the above-cited scenario, the decision criteria may include the following factors: Relevant qualifications Leadership skills Communication skills Planning and analytical skills Professional experience

Allocating Weights to CriteriaThe next step in the decision making process is prioritization. Prioritization is achieved by assigning quantitative weights to each criteria element. The weight age defines the relative significance of each element.Allocating Weights: Example

Developing AlternativesInvolves defining the possible alternatives (or choices) that would resolve the problem.In our case, the alternatives would be a list of candidates or job applicants.

Analyzing AlternativesAlternatives are rated and analyzed on the basis of the criteriaThe rating can be based on a specified scale, say 1 5 etc.Rating may be subjective in nature and thus, may depend on the judgment of the individual(s)

Criteria Rating: Example

Analyzing & Assessment: Example

Selecting an alternativeInvolves choosing the best alternative, based on the above rating and analysisGenerally implies selecting the alternative with the highest score.Implementing the AlternativePutting the decision into action Involves clear communication of the decision to all concerned and obtaining their commitmentEvaluationEvaluation forms an integral part of any processInvolves evaluation of the outcome based on the desired goal and criteriaInvolves assessing the effectiveness and efficiency of the outcome (or the entire process)In case of any undesired results, each step of the process is carefully reviewed to trace the root causesCriterionWeight

Relevant qualifications3

Leadership skills5

Communication skills3

Analytical skills4

Professional experience1

CANDIDATES RATING AND ASSESSMENT

CandidateQualif-

icationLeader-

shipCommun-

icationAnalysisExper-

ience

Kamran Ashraf33311

Rahila Mushtaq21422

Tasaduq Hussain42323

Zubair Ahmed25241

Maliha Javed45432

EVALUATION OF CANDIDATES

CandidateQualif-icationLeader-

shipCommun-

icationAnalysisExper-

ienceTotal

Kamran Ashraf91594138

Rahila Mushtaq65128233

Tasaduq Hussain121098342

Zubair Ahmed625616154

Maliha Javed12251212263