INTRODUCTIONDecision-making is a mental process of selecting the best

alternative for doing a work

DEFINITIONS

A decision is an act of choice-wherein an executive forms a conclusion about what must be done in a given situation. A decision represents a course of behaviour chosen from a number of possible alternatives . -D.E. McFarland

A decision is a course of action which is consciously chosen for achieving a desired result. -Haynes and Massie

A decision in its simplest form is a selection of an alternative. - R.A.Killian

CHARACTERISITICS

1. An intellectual activity2. A process of selection3. An element of commitment4. Evaluation of alternatives5. Result-oriented

ELEMENTS

1.Concepts of a good decision2.Environment of decision3.Psychological elements4.Timing of decisions5.Communication of decisions6.Participation of employees

STEPS INVOLVED

1.Setting objectives2.Perception of the problem3.Analyzing the problem4.Developing alternative solutions5.Screening the alternatives6.Selecting the best solution7.Implementing the decision8.Feedback and Control

PRINCIPLES1.Marginal theory of decision-making2.Mathematical theories3.Psychological theories4.Principle of exceptions5.Principle of alternatives6.Principle of limiting factors7.Principle of participation

TYPES

Programmed and non programmed

Basic and routine

Policy and operative

Individual and group

RATIONAL DECISION-MAKING

It is a process of problem-solving in a scientific , systematic ,objective and reasoned manner. It also implies an ability and willingness to positively respond to reason, to be logical, to coherently relate means with ends and to visualize the totality of the decision making environment- both immediate and long range.

QUANTITATIVE TECHNIQUES OF

DECISION-MAKINGOperations Research(OR) is one of the most important quantitative technique of decision making.

It is the application of scientific methods; of the study of alternatives in a problematic situation, with a view to providing a quantitative basis for arriving at an optimum solution in terms of the goals. It uses highly sophisticated higher mathematics, computers and programming to achieve the desired results and is therefore often called management science.

MAIN TOOLS OF OR1.Construction of decision models2.Simulation 3.Linear programming4.Probability theory5.Game theory6.Queuing theory/ Waiting line

theory7.Monte carlo method8.Search theory9.Other techniques: Value theory,

Symbolic logic, etc

It is a process whereby the employees and the superiors come together to identify common goals, the employees set their goals to be achieved, the standards to be taken as the criteria for measurement of their performance and contribution and deciding the course of action to be followed.

MANAGEMENT BY OBJECTIVES

REASONS: WHY MBO SUCCEEDS?

1. Adequate unfreezing of inter-personal relationships

2. Emphasis on change3. Acceptance of human side of an

organization4. Maximum information generated5. “Group” emphasis, as opposed to

“individual emphasis6. Effectiveness emphasis7. Situational emphasis

REASONS: WHY MBO FAILS?

1. Lack of commitment2. Top management not involved3. Poor implementation4. Little coaching or assistance to managers on

procedures involved5. No follow-up6. Objectives handed over to subordinates7. Creative goals stifled8. Fuzzy top policy9. Overemphasizing appraisal10.Making it mechanical