INTRODUCTION

We all are probably no stranger to the term decision making. If we think about the difficulties involved in making decisions in our own life, like what college to attend or which books to refer or what job to take, we can surely appreciate how complicated and important the process of decision making can be in organizations, where the stakes are often considerable and the impact is widespread. Decision Making may be simply defined as the process of making choices from among several alternatives. It is the selection based on some criteria from two or more possible alternatives. To decide means to to cut off or in practical content, to come to conclusion Decision-making is an essential part of every managers job. Managers are essentially decision-makers. They manage by making decisions and getting them implemented through their subordinates. They make several types of decisions on the basis of available information, intuition and creativity. Managers have often to make decisions under uncertain and risky conditions. Their own success and the future of their organizations largely depends upon the quality of decisions and their implementation.

What is a decision? Every day, each of us makes numerous decisions concerning every aspect of our daily lives. However, we generally make these decisions without stopping think about how we make them and what is involved in the particular decision-making process itself In the most general terms, a decision is the selection of an option from two or more alternative choices. In other words, for a person to make a decision, a choice of alternatives must be available. When a person has a choice between making a purchase and not making a purchase. a choice between brand X and brand Y or a choice of spending time doing A or B, that person is in a position to make a decision. On the other hand, if the consumer has no alternatives from which to choose and is literally forced to make a particular purchase or take a particular action (e.g., use a prescribed medication), then this single no-choice

instance does not constitute a decision; such a no-choice is commonly referred to as a Hobsons choice.

In actuality, no-choice purchase or consumption situations are fairly rare. You may recall from our discussion of core American cultural values that for consumers, freedom is often expressed in terms of a wide range of product choices. Thus, if there is almost always a choice, then there is almost always an opportunity for consumers to make decisions, Moreover, experimental research reveals that providing consumers with a choice when there was originally none can be a very good business strategy, one that can substantially increase sales. For instance, when a direct-mail electrical appliance catalog displayed two coffeemakers instead of just one (the original coffeemaker at $149 and a new only slightly larger one at $220 the addition of the second comparison coffeemaker seemed to stimulate consumer evaluation that significantly increased the sales of the original coffeemaker.

CONCEPT AND NATURE OF DECISION MAKING Decision-making is a managerial process of choosing a particular course of action out several alternative courses for the purpose of achieving the given objective. It involves committing the organisation and its resources to specific courses of actions. Managers at all levels in an organisation make decision--, and solve problems. Problems arise when the actual state of affairs differs from the desired state of affairs-Sometimes, however, problems may give rise to opportunities. Thus; decision-making is the process uf reducing the gap between the existing situation and the desired situation rough solving problems and making use of opportunities. A decision is a course of action consciously selected from available alternatives to achieve a desired goal. It is e outcome of judgment and represents a commitment.

From the above description, the following characteristics of decision-making can identified. (i) Decision-making is an ongoing or continuous process. Management is perpetually a decision-making exercise. (ii) Decision-making is a systematic process, an iterative, and recurring activity. (iii) Decision-making involves commitment of resources. (iv) Decision-making is an intellectual process. It involves imagination, reasoning, evaluation and judgment. (v) Decision-making is situational. The nature and type of decision made vary with the environment. It may be a decision not to art. However, managers can learn from past decisions. (vi) Decision is a goal-oriented process. Decisions are made to achieve certain goals. A decision is good to the extent it helps in attaining the desired goal. (vii) Decision-making is a process of selection. Unless there are one or more alternatives no choice is possible. (viii) There are several elements of decision-making. (a) The decision-maker. (b) The decision problem. (c) Objectives and values of the decision maker (d) The environment in which the decision is to be made. (e) The alternative courses of action and their estimated outcomes. (f) The final choice. (g) Decision-making is pervasive.

PERVASIVENESS OF DECISION MAKING : Decision-making underlines the entire process or management because every Managerial function involves decisions. even thing a manager; does. In the words of Peter Drucker, Whatever a manager does he does it through making decisions and getting them implemented in an effective manner. The quality of decisions reflects the competence and character of management and determines the success of the organisation. Decision-making is an essential part of all the managerial process: Setting up goals, formulating strategies, and policies, designing the organisation structure, motivation and leadership process, communication and control process and so on. Decision-making runs through all the managerial functions. There exists a close relationship between the decisions made in various functions of management. For example, planning decisions affect control decisions and vice versa. Longrange and company wide decisions provide the framework for making short term and departmental decisions. Table shows that each of the managerial functions has several vital decisions associated with it. Decision-making and problem solving are directly related with planning. Planning involves the most significant and far reaching decisions a manager can make. In the planning process, managers decide the goals to be pursued, what resources will be used and what actions will be taken to achieve the goal. The entire planning process involves managers in a continual series of decision-making situations. The quality of decisions will determine how effective the plans will be. Managerial decisions provide the framework within which other employees make their decisions and act. Top managers make major decisions and delegate the authority for making minor decisions to the middle and lower level managers. Top management makes a decision-making system in the organization through proper delegation of authority, installation of a suitable information system, formulation of organizational policies and procedures, training subordinate managers to improve their decision-making skills, and creating organizational climate conducive to sound decision-making.

EFFECTIVE DECISION MAKING PRINCIPLES Some guidelines for effective decision-making are given below: 1. Set Decision: Making Goals the decision-maker should define the goals he wants to attain by making a decision. Coal setting provides relevant criteria for the evaluation of alternatives and helps in identifying the sources of required information. Without setting goals, the search for information will be inefficient and expensive. 2. If You Get Stuck Ask/or Help: A useful technique to improve decision- making is to talk about the problem with someone else, especially where there is an impasse. Such an approach not only forces the manager to think more precisely about the problem but the other person may provide valuable new insights into the potential decision. 3. Dont be Afraid to Develop Innovative Alternatives: Many managers fall into a rut because they develop alternatives on the basis of the likelihood of their acceptance by higher management rather than their ability to solve the problem. Managers should not be afraid of developing innovative or novel alternatives. However, they should carefully think through the implications and consequences of each alterative sometimes supposedly minor consequences or side effects of a decision are not given sufficient attention which may lead to a poor decision. Decisions need not always be a yes and no variety. 4. Be Problem Oriented not fist Solution Oriented: Many managers become so attached to a particular decision aid or method that they either try to fit all problems to the model or they create problems in order to use the model. This is the case of the fail wagging the dog. Make sure you have identified the problem clearly before a choice of decision aid is made. 5. Marshall the Facts: The decision-maker should keep his eyes and ears open in order to anticipate problems and to collect all relevant information. Wherever necessary new sources of information should be developed. The decision-maker should not accept others opinions without checking their validity] The sources and accuracy of information should be verified.

6. Gain Commitment for A Decision: Managers must not assume that a decision will be accepted by others in the organisation without some preliminary work. Unless the matter is confidential, it would be wise to discuss your views with others, seek out their views and to pinpoint sources of support and possible resistance. Mere communication and explanation of the decision is not enough. Implementation of the decision should be delegated wisely. Delegation is one way to get people involved and committed to a decision. When employees are made to feel a part of a decision, they may naturally want to put out extra effort to ensure the effectiveness of the decision. 7. Evaluate and Follow-up the Decision: Many well-thought and implemented decisions fail due to lack of follow-up by the manager. The lack of evaluation may signal to employees that the manager has lost interest in the matter. The attention, effort and recognition which are important byproducts of follow-up are essential elements of effective decision-making. Dont be Too Hastyin Making Decisions: The result oriented manager assumes that decisions must be made quickly in order to be effective. This desire to make a quick decision pushes many managers into poor decisions that could be avoided if Bore time were spent identifying the problem and evaluating alternatives. However, reasonably good decisions taken in time may be better than finding the ideal solution after a great delay. A sense of timing is necessary to make good decisions. 8. Maintain Flexibility: Good decision-makers do not persist in one approach but are ready to change their approach to get an acceptable solution. They are not creatures of habit and keep their mind open for new ways to see and solve the problem. It is necessary to keep the mind open for new relationships or new combinations. Management is more an art than a science and, therefore, there is nothing wrong in using commonsense.

DECISION MAKING APPROACHES 1. Quantitative Approach: In quantitative approach, the quantity in the alternatives are reviewed, and evaluate that means what are included in the alternatives. 2. Decision centered Approach: In this approach it is decision centered. The main aspect is an taking decision and not other relevant. 3. Managerial Role approach: Approach on managerial function Planning, Organizing, Staffing, Directing, Controlling that mean decision making on these managerial function. APPLICATION OF DECISION MAKING CONCEPT MODEL 1. It supports different type of decisions: Information use can be classified into three types. a. Structured information b. Semi-structured information. c. Unstructured information. 2. MIS supports the decision maker in different phases of decision making: Intelligence, Design, Choice & Implementation 3. Relevant of Models - 4 levels of Relevant, 4 basic model for making decision: 4. Quality of the decision- MIS improve the quality of the decision this is not always true. MIS not improve but only help. Capabilities of MIS: a. MIS can consider a wide range of alternatives at the same time. b. All the parameters can be considered. c. Weightage to different parameters. d. Accumulation (correct & exact) of new information can be made. e. Re-examining the alternatives in view of new information f. It does not bored.

TYPES OF DECISION MAKING The type of decision making and information required by managers is directly related to their level of management and the structure of decision situations they face.

In the day today functioning of an organisation managers make several types of decisions. The various types of managerial decisions can be classified as follows1. Programmed (Structured) and Non-Programmed (Unstructured) Decisions: Herbert Simon has classified managerial decisions as programmed decisions and non-programmed decisions. Programmed decisions mean decisions made by reference to a predetermined set of procedures, rules, precedents and techniques. These decisions are well structured in advance and tend to be consistent over situations and time. Whenever a problem or issue for decision-making arises, the relevant predefined procedure or rule is applied to arrive at the decision. For example, there is a set procedure for purchase of materials payment of bills and recruitment of clerical staff in most organisations. Programmed decisions are made for routine and recurring problems which need a structured solution by application

of known and well defined operating procedures and processes. Such problems do not. require much judgment and discretion on the part of managers. Decision rules and procedures for tackling such problems are formulated in advance to reduce time and effort. Decisions relating to complex problems such as allocation of resources could also be programmed with the help of sophisticated mathematical and statistical techniques and computers. Structured decisions (also called programmable decision) involve situations where the procedures to follow when a decision is needed be specified in advance. Therefore, such decisions are structured or programmed by the decision procedures, or decision rules, developed for them. A structured decision may involve what is known as a deterministic, or algorithmic, decision. In this case a decisions outcome can be determined with certainty if a specified sequence of activities (an algorithm) is performed or a structured decision may involve a probabilistic decision situation. In this case enough probabilities about possible outcomes are known that a decision can be statistically determined with an acceptable probability of success. The information systems can support structured decisions is by quantifying and automating a 1ecision-making process. Non-programmed decisions are made for novel and non-repetitive problems. Adequate information and knowledge are not available for such problems. Therefore, decisions cannot be made by reference to any predetermined guidelines, standard operating procedures or rules and precedents. Such problems arise infrequently and are unstructured. They require unique or unusual solutions. A solution has to be specific to the particular problem and therefore, a high degree of executive judgment is required. A major change in Government policy about the industry, stiff competition from an unknown rival, sudden departure of the chief executive are examples of non programmed decisions. Unstructured decisions (also called nonprogrammable decisions) involve decision situation where it is, not possible or desirable to specify in advance most of the decision procedures to follow. Many decision situ in the real world are unstructured because they, Are sub lect to too many random or changeable events or involve too many unknown factors or relationships. At most, many decision situation are semi structured . That is, some decision procedures can be prespecified, but not enough to lead to a definite recommended

decision. Decisions involved in starting a new line of products or making major changes to employee benefits would probably range from. unstructured to semi structured. The many unknown or changeable factors involved would require a less-structured approach leading to subjective judgments by managers, Information systems can support such decisions by providing (1) the ability to make ad hoc .inquiries for information in company data bases and (2) ability to reach a decision in an interactive process using a decision support system.

2-Strategic and Tactical Decisions: According to H.I. Ansoff decisions can be classified as strategic and tactical decisions. Strategic or policy decisions involve long term and major commitments and arc critical to the survival and success of the organisation. They exercise a vital influence on the direction and functioning of the enterprise. Location of a new plant, launching a new product, adoption of new technology, acquisition On of a

running enterprise are examples of strategic decisions. Considerable analysis and judgment is required for such decisions. They are generally made at the top level of management. Strategic decisions just like non-programmed decisions are made under conditions of partial ignorance. Tactical or operational decisions are made to implement strategic decision. A series of tactical decisions may be required to implement one strategic decision. Tactical decisions are concerned with maximising the performance of existing operations. They involve short term commitments and exercise a minor influence on the future of the organisation. Tactical decisions are more specific and functional than strategic decisions. These decisions arc made under an environment which is less complex and less uncertain. For example, if the top management have decided to launch a new product, decisions concerning the name, package, price, promotion of the new product are tactical decisions. Such decisions require lesser analysis and judgment and are made at middle and lower levels of management.

3. Individual and Group Decisions: At different levels of management, individual managers are given the authority to make a large number of decisions. They assume full responsibility for the consequences of such decisions. They are supplied with the [ information and resources for this purpose. When-two or more managers jointly take decisions and assume collective responsibility these are known as group decisions. At the top level, the Board of Directors stability strategy decisions as a plural executive body. At middle and lower levels, there exists several committees which take decisions on several matters relating to the functioning of the Organisation. In addition to these formal groups, managers at any level may informally involve their colleagues and subordinates in the decision-making process. Group decision-making is considered to be better than individual decision making in several ways. There is pooling of knowledge and experience of different individuals. Group deliberation and analysis is likely to improve the quality of decisions. Decisions of interdepartmental nature can better be made by a group of managers representing the concerned departments than by a single manager. Group decisions are easier to implement due to their wider acceptance and pragmatic

nature. It is more advisable to entrust a high degree of decision-making authority to a group than to an individual. Group decision-making, however, suffers from some drawbacks. Decisions are likely to get delayed. Compromise and conformity among group members may dilute the quality of decisions. Responsibility for the consequences of decisions is diluted among group members.

DECISION MAKING TOOLS & TECHNIQUES

Traditional Techniques for Making Programmed Decisions: 1. Habits: Managers often attempt to solve routine and repetitive problems through established habits. These habits are developed through experience and learning. Use of habit in decision-making does not require conscious thinking because habits serve as set responses to problems. 2. Standard Operating Procedures: Every organisation develops standard procedures to guide managerial decision-making. These serve as decision criteria and are meant for ensuring consistency in managerial decisions. They are more formal than habits and can be modified whenever necessary. 3. Organisational Structure: Organisational structure is a network of authority and activity relationships. It tells managers what is expected of them, to whom they are accountable and from whom to get resources and information. It also provides flows for authority and information. Organisational structure is a traditional systematic technique of decision-making. Traditional Techniques for making Non-programmed Decisions: In case of novel and non repetitive problems, no precedents are available and each problem needs to be solved in an unique manner. Traditionally managers have relied to their intuition, hunch and judgment for making non-programmed decisions. These are personal qualities rather than techniques. These are however indispensable and all the modern techniques of decision-making are used to reinforce intuition and judgment or to partially replace them. Modern Techniques for Making Decisions: Several quantitative techniques are now available for making decisions on routine but examples problems. These techniques are based on scientific method which consists of the following elements: (a) statement of clear objectives (b) definition of the problem,

(c) formulation of hypotheses. (d) collection of facts, (e) testing the hypotheses, (f) explanation of results. Modem techniques are meant to assist manager in making sound decisions for efficient utilisation of scarce resources. These techniques are collectively known as Operations Research which has emerged as a separate discipline. Operations research is denned as the application of scientific methods, and techniques to problems relating to the operation of systems so as to facilitate optimal solutions to complex problems. The basic tool used in operations research techniques is mathematical modeling. It means the construction and use of a symbolic model which represent the key variables of a problem in mathematical terms. The variables are quantified and relationships between them are expressed through mathematical equations. A relevant mathematical technique is applied to the model to arrive at the solution to a problem. High speed electronic computers can be used for data processing. Quantitative techniques are used to solve complex problems concerning plant capacity allocation and utilising, inventory control, product mix, production scheduling, capital budgeting etc. Some of the quantitative techniques are as follows : 1. Linear Programming: It is the technique for optimisation of an objective function with the given services and constraints. The objective function may be maximization of gain or minimisation of cost. The technique is useful under conditions of certainty. 2. Probability Decision: Theory This theory is based on the premise that future is uncertain. On the basis of available information and subjective judgement various probabilities are assigned to alternative courses of action. The likely outcomes of different alternative are evaluated and the most promising alternative is selected Payoff matrix and decision tree are constructed to represent the variables. -

3. Payoff Matrix: Decision-making involves choosing die best out of two or more alternatives. Payoff matrix is a statistical technique that helps managers in making the choice. It is particularly useful for determining which strategy is most likely to make the greatest overall contribution to the attainment of objectives. A payoff represents a monetary reward or utility that is a consequence of specific strategy in conjunction with a given state of nature. When payoffs are arranged in the form of a table we get a matrix. The payoff is contingent upon the occurrence of a certain event. Therefore, it is necessary to reasonably determine the probability of occurrence and to compute the expected value bf the payoff. The expected value of an alternative or strategy is the sum of conditional values multiplied by their respective probabilities.

4. Decision Tree : Decision tree is an extension of payoff matrix. Payoff matrix is used for making non sequential decisions whereas decision tree can also be used for making sequential decisions in which the outcome of a decision affects later decisions. With the help of a decision tree the impact of choice in one time period upon succeeding time periods can be estimated.A decision tree is a schematic representative of a decision situation. Like the payoff matrix it allows a manager to consider various them, modify these results by their probability and then make comparisons. 5. Game Theory: In competitive revalry or conflict, two or more competitors are involved in a game of gaining at the expense of each other. Game theory is useful in determining the factors to be considered in a competitive situation. There are zero sum and non zero sum games. 6. Queuing (Waiting Line) Theory: This technique is useful for determining the optimum number of service facilities in situations like airline reservation, railway booking counters, equipment waiting

for repairs, data waiting for computer processing, bank customers waiting for cash receipts and payments, trucks waiting to unload at a warehouse, etc. The fundamental problem in a waiting line is to balance the costs of additional facilities against the cost of waiting for service, For instance, bank office where customers have to wait too long may feat that customers may decide to do business in other banks. In order to prevent loss of business it may decide to open more counters. The length of a line waiting to pass through a service facility depends on the rate of arrival and the rate of service. If the rate at which customers arrive exceeds the speed at which they are served a queue will develop. Service facilities fall short of the demand for facilities due to variations in the time required to provide the service as well as in the rate at which customers arrive for service. These variations lead to idle capacity at some point in time and waiting lines at other times. Queuing theory analysis help to reduce the costs involved in idle capacity as well as in waiting lines.

7. Network Techniques: Programme Evaluation and Review Technique (PERT) and Critical Path Method (CPM) are two important network techniques used for project planning and control. Complex projects involve considerable time and cost. Network techniques are used to minimise both time and cost. A network diagram is prepared in detail to identify the activities required for completion of a project, to assess their interrelation and to estimate the probable time and cost of their completion Managements attention is focused on the critical path. Modern Techniques for Making Non-programmed Decisions: 1. Creativity Techniques: Solution of novel and non-routine problems requires creative thinking. Creativity means the ability to generate new ideas and new ways of doing things. Brainstorming, Delphi, synaptic and techniques are used to develop creativity. Brainstorming is a group based technique. Members of a group are encouraged to think of all possible alternatives to a problem. The ideas may be wild or impractical but they may ultimately suggest a creative solution to the critical problems.

2. Participative Techniques: Participation of employees in decision-making is helpful in improving the quality of decisions. It results in more acceptable and timely decisions. Employees feel committed and responsible for implementation of decisions in which they have been involved. 3. Heuristic Techniques: Decision-making is complex and cannot always be rational and systematic. Uncertain environment, lack of information, conflicting goals and perverse human nature make it sporadic and fragmented. Therefore, certain rules of technique for solving complex problems. Figure: Examples of decisions by the type of decision structure and by Level of management.

STEPS IN DECISION MAKING PROCESS :Decision-making maxims will help to reinforce the above decision-making process whether related to problem-solving or not.We know what happens to people who stay in the middle of the road. They get run down. (Aneurin Bevan) In any moment of decision the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do is nothing. The Goal of the Decision-making Process The goal of making decisions is to:

 Achieve some desired objective(s); and, Avoid negative, unintended consequences. Few decisions can provide all of the desired objectives and no unintended consequences. A good decision, however, provides the most desired objectives with the fewest negative tradeoffs. Historians, psychologists, and management science specialists have studied and formalized decision-making processes that increase the likelihood of making good decisions. Identify the roles of different people: Decision-makers: are responsible for deciding what objectives should be emphasized where tradeoffs among values are needed. On private lands, decision- makers are the landowners or their designees. In the case of public lands, the decision-makers are the appropriate elected officials or their designees. Analysts: are professionals, scientists, or other specialists who analyze the effect of each alternative management action on each objective. The analysts role is advisory and is best performed if the analyst does not- exhibit a preference for certain objectives or alternatives. It is helpful if forest managers work closely with the analysts, to ensure that the alternatives are operationally feasible. Stakeholders: are those who have an interest in some possible objectives, but do not have a legal ownership and are not designated as analysts. Stakeholders could include people who purchase or otherwise use the goods and services provided by the land or adjacent lands. Process managers: are specialists in the decision-making process. They direct the process and Censure that it is followed correctly; however, they remain indifferent to the outcome or the chosen alternative. Forest managers: are responsible for implementing the chosen alternative. Their input during scoping and other steps is helpful and their understanding of the nuances of discussions during the decision-making process helps their management ability. Each of these groups plays designated roles in the decision-making process. For large scale decisions, different people or groups of people fill each role. For

smaller scale decisions, often a single person or group can assume several roles. Where a person assumes several roles, it is important that he/she understands the differences in functions of each role being assumed. Scope the target area: managers, decision-makers, analysts, stakeholders, and forest managers can contribute to this step. The area to be managed is studied relative to its area, productivity, species composition, age class distribution, special features, concerns, and other factors. Scoping is done both by examining existing information about the area and by visiting the area. The purpose of scoping is to develop an understanding of the system, its inputs and outputs, the component elements and the interactions among different groups of elements. Steps in Decision Making Process: Decision-making is a process consisting of a logical sequence of interrelated steps. These steps are given below:

1. Identification Phase: The decision-making process begins with managerial recognition that decisions are required on some important problem or issue. Managers identify the decision situations with the help of the information which they continuously receive on the internal and external environment of the organisation? These situations may relate to problems, crises and opportunities. Managers require foresight and intelligence to understand the problem quickly and to take decisions in time it is essential to recognise the crisis and to respond to them promptly as otherwise they may be out of control. Effective managers identify the opportunities early and initiate action to take advantage of them Decision-making. Identify your Options Gather information on your options and yourself Several important considerations of measurable criteria are described below: Time period: Forest management is usually planned over an extended period, such as 50 or 100 years. It is expected that the forest plan will be revisited and improved with each management cycle (e.g., 5 or 10 years). Positive terms: Communication of measurable criteria is most effective if objectives are expressed in positive terms, such that higher values of the measurable criteria indicate a more desirable condition. Summary values: The measurable criterion for each objective is represented by a summary value for ease of comparison among management alternatives. Summary values allow decision-makers and stakeholders to begin developing an understanding of the consequences of different alternatives without being overwhelmed by the complexities of the analyses. The iterative process allows the analyst to show the more complex numbers leading to the summary value as they re requested. A summary value can be an average of the values for each

management cycle during the planning period or it can be defined to include nonlinear or threshold conditions. 1. Identification phase: Problem definition and diagnosis problem well denned is half solved. A problem may be defined in terms of the gap between the actual and desired states or as an opportunity to improve rather than restore organisational performance. Most problems consist of several elements which are interrelated. It is, therefore, necessary to identify various elements of the problem, its relation to the goals of the organisation, relation with other problems and previous decisions, etc.Once the problem is defined, its correct diagnosis is necessary. Diagnosis involves identifying the sources of the problem and factors bearing on it. It is necessary to distinguish the symptoms from the causes. For instance, high labour turnover may be a symptom rather than the problem. In order to find the causes of a problem, it is essential to collect and analyse information pertinent to the problem. The information must be relevant, accurate and timely.

2.

Development Phase: This is a search process involving much time and effort. After problem identification and diagnosis, the decision-maker must consider what can be done about the problem. Many possible solutions to organisational problems are not realistic due to lack of necessary resources or due to external forces which the manager cannot change. These limitations on corrective action impose constraints on the decision-maker. It is necessary to identify constraints and decision criteria otherwise time and effort may be wasted on unrealistic courses of action. Decision criteria are the standards against which alternative choices can be measured. These are guidelines it on how the decision will be evaluated or what constitutes an effective solution to the problem. For example, in making investment decisions, an investor might establish criteria such as the minimum return should be 20 percent and the maximum risk should not exceed 25 percent of investment.

Develop a wide, creative range of alternatives: It is important to obtain as wide a range of alternatives for several reasons: to determine the compatibility of different objectives; to give the decision-makers a wide range of alternatives with different tradeoffs; to seek alternatives that fulfill as many of the objectives as possible, while having the fewest negative consequences.

Several important considerations should be made when developing the range of alternatives: Number of alternatives: A limited number of alternatives (e.g., 10) should be analyzed and presented to the decision-maker. These alternatives should span as wide a range of management scenarios as possible. (If decision-makers are interested in an alternative that is intermediate between two or more of those presented, they can request it as they narrow their preference of alternatives.) Standard alternatives: In addition to a creative range of alternatives, several standard alternatives can be presented and analyzed. These alternatives help Thound the extremes of management alternatives. Naming alternatives: Value-neutral names (e.g., Alternative A, Alternative B) should be used. This will help decision-makers and stakeholders focus on the consequences of the alternatives. Decision criteria provide an idea of the ideal choice which perfectly meets the requirements of the decision-maker. He develops a set of alternative solutions to the problem which are feasible and nearer to his ideal. No major decision should be made .until several alternatives are developed. Creativity and imagination are required to develop alternative courses of action. It is necessary to resist the temptation of accepting the first feasible alternative and the inclination to appraise alternatives as they are developed. Evaluation at this stage is premature. Ideally; one should identify all possible options that could solve the problem. However, in practice managers do not have the time or knowledge to formulate alternatives. Managers usually limit the number of choices to the most, desirable ones. Care must however be taken to consider reasonably wide range of alternatives including

the possibility of no action. This helps to assure in depth analysis of the problem and increases the managers freedom choice. The range of alternatives should be within manageable limit. All alternatives this stage are tentative and potentially relevant. 3. Selection Phase: Evaluate Options Use one or more of the evaluation techniques described overleaf. If it helps, discuss your options with another person e.g. a Careers Consultant. Once a feasible range of alternative courses is developed, the next age is to screen and evaluate each alternative/Effectiveness of an alternative can be measured in terms of how realistic it is in terms of the goals and resources of the organisation and how will it help to solve the problem? The positive and negative consequences of each alternative are judged. Both quantitative and qualitative evaluation is necessary to ensure that all relevant factors are taken into account. The predicted outcomes of each alternative are measured in terms of the decision criteria established earlier. Evaluation is a process of trade off wherein expected benefits are to be balanced against possible adverse consequence. No alternative is perfect and therefore, the decision-maker may rank the alternatives in terms of their soundness. Many, creative, teaching aids can be used to give the decision-makers an understanding of the alternatives and their consequences. These aids can include: Matrices Graphs Visualization (Stand and Landscape Scale) The iterative approach allows the decision-makers to request additional or further clarification of objectives, measurable criteria, alternatives, and analyses. Such additional input, and consequent delay, is minimized if the analysts keep the decision- makers informed of each of the steps described above. Choose an alternative: On the information you have gathered and analysed, select the best option. If you do not have enough information to choose one option over another, you may need to do more research. You may wish to identify your best alternatives too: your Plan A, B and C.

[ decision. maker is responsible for the choice of an alternative, but may delegate decision-making authority to stakeholders, analysts or others.] When the decisionmakers are satisfied with the alternatives and analyses, they choose one management alternative for implementation. It is not possible to choose more than one alternative, and delaying a decision is a temporary choice of the No Action alternative. The decision-maker is free to choose any alternative; however, the choice of alternatives reveals the importance the decision-maker places on various objectives. After evaluation and comparison of different alternatives, the best alternative is selected. It is the alternatives that will meet the requirements of the problem situation better than any other alternative. Good judgment and experience are necessary as in many cases no alternative may stand out clearly as the best choice. 4. Implementation Phase: Make a Plan and Implement the Decision Identify what information or resources you need to follow through on your decision. Identify possible obstacles to implementing your decision and plan to overcome them. Try not to worry about your decision: if you have fully assessed the situation and all possible outcomes, you have nothing to fear. Whichever option you take, there will be benefits: new experiences, opportunities to find out more about who you are and what you want. Review the Decision : Reflect on how you made your decision and how successful the outcome was. Think about how you can use what you learned when making future decisions. The chosen alternative is turned over to the forest manager for implementation, monitoring, and feedback. [ this time, the forest manager becomes directly responsible to the decision-makers for implementing the chosen alternative.] Monitoring and feedback (Continuous Quality Improvement and/or Adaptive Management) The decision-making process not end when an alternative is chosen. Merely selecting a course of action is of little value to organisation. To resolve a problem or to take advantage of an opportunity, the decision must be implemented. A decision is no better than the action taken to make it a reality. Implementation requires communicating the decision and gaining acceptance of people. A good way to win acceptance of decision is to involve others in the decision-making

process. After gaining acceptance, resources are acquired and allocated. Budgets and schedules for the actions are prepared. Responsibilities for the specific tasks are assigned. A procedure for regular feedback on the progress is set up. Actions taken to implement the decision are continually monitored. Such monitoring and feedback enables managers to evaluate the effectiveness of decisions. Wherever necessary steps are taken to make the decision effective. Such steps may include eliminating hurdles in implementation, minimizing adverse consequences and revising the decision itself. Herbert Simon has identified the following stages in decision-making: i Intelligence activity-identification and diagnosis of the problem situation ii. Design activity-generation and evaluation of alternative courses of action iii. Choice activity-selection of the best course of action.

DECISION MAKING STYLE & METHOD According to behaviorlist Isabel Briggs Myers, a persons decision making process depends to a significant degree on their cognitive style. Myers developed a set of four bi-polar dimensions, called the Myers-Briggs Type Indicator (MIBTI). The terminal points on these dimensions are: thinking and feeling; extroversion and introversion; judgement and perception; and sensing and intuition. She claimed that a persons decision making style is based largely on how they score on these four dimensions. For example, someone who scored near the thinking, extroversion, sensing, and judgement ends of the dimensions would tend to have a logical, analytical, objective, critical, and empirical decision making style. Martinsons has found that American, Japanese and Chinese business leaders each exhibit a distinctive national style of decision making Other studies suggest that these national or cross-cultural differences exist across entire societies. Decision mapping enables one to illustrate visually the influences of heuristics and bias on human decision making in contexts of risk and uncertainty. Facione and Facione (2007) describes the theory, technique, and application of this new analytical methodology. Among other things it shows how to construct decision maps from oral and textual expressions of individual or group decisions. A&H Method decision maps illustrate the combinination of reasons-claim argument

strands as well as the influences of cognitive heuristics and psychological dominance structuring which emerge from those data. Researchers can compare decision maps illustrating how many different people have made a decision about the same question (e.g. Should I have a doctor look at this troubling breast cancer symptom Ive discovered. Why did I ignore the evidence that the project was going over budget?) and then craft potential cognitive interventions aimed at improving decision making outcomes. Below is a list of some of the more commonly debated cognitive biases: Selective search for evidence (a.k.a Confirmation bias in psychology) (Pious, 1993) - We tend to be willing to gather facts that support certain conclusions but disregard other facts that support different conclusions. Premature termination of search for evidence - We tend to accept the first alternative that looks like it might work. Inertia - Unwillingness to change thought patterns that we have used in the past in the face of new circumstances. Contrariness or rebelliousness - Unwillingness to share a view with a perceived oppressive authority. Experiential limitations - Unwillingness or inability to look beyond the scope of our past experiences; rejection of the unfamiliar. Selective perception - We actively screen-out information that we do not think is salient. (See prejudice.) Wishful thinking or optimism - We tend to want to see things in a positive light and this can distort our perception and thinking. Choice- supportive bias occurs when we distort our memories of chosen and rejected options to make the chosen options s more attractive. Recency - We tend to place more attention on more recent information and either ignore or forget more distant information. (See semantic priming.)The opposite effect in the first set of data or other information is termed Primacy effect (Plous, 1993) Repetition bias - A willingness to believe what we have been told most often and by the greatest number of different of sources.

PROS AND CONS DECISION-MAKING METHOD: Another simple process for decision-making is the pros and cons list: Some decisions are a simple matter of whether to make a change or not, such as moving, taking a new job, or buying something, selling something, replacing something, etc. Other decisions involve number of options, and are concerned more with how to do something, involving a number of choices. Use the brainstorming process to identify and develop options for decision-making and problem-solving. 1. First you will need a separate sheet for each identified option. 2. On each sheet write clearly the option concerned, and then beneath it the headings pros and cons (or advantages and disadvantages, or simply for and against). Many decisions simply involve the choice of whether to go ahead or not, to change or not; in these cases you need oniy one sheet. 3. Then write down as many effects and implications of the particular option that you (and others if appropriate) can think of, placing each in the relevant column. 4. If helpful weight each factor, by giving it a score out of three or five points (eg., 5 being extremely significant, and 1 being of minor significance).

On the basis of the pros and cons, and the weighting applied, in the above example theres a clear overall quantifiable benefit attached to the decision to go ahead and buy a new car. Notice that its even possible to include intangible emotional issues in the pros and cons comparison.

DECISION MAKING BEHAVIOUR MODELS 1. Normative Model : Rationality and Economic Man: This model is based on classical economic theory. According to this theory the economic man is motivated by self- interest and seeks to maximise economic gain. He is a perfectly rational decision- maker. He has access to full information and is competent enough to make the optimum decision. A managers decision-making behavior as an economic man is characterised by the following: I). He is systematic and logical in his thinking. ii). He is very objective and never allows emotions and non-economic factors to influence his judgment. iii). He is knowledgeable, possesses full information and knows the consequences of different alternatives. iv). He is competent enough to analyse the information in an intelligent manner. v). He has clear goals and knows his priorities very well so as to maximise his gain. vi). He chooses appropriate ways and means to reach his goals. The normal model is idealistic and prescriptive. It tells how decisions should be made and how managers should behave as decision-makers. The rational decision maker operates in a relatively closed system by making simplifying assumptions about the decision-making situation and by ignoring the facts which cannot be quantified, 2. Behavioural Model: Bounded Rationality and Administrative Man According to Herbert Simon normative model is idealistic as managers cannot be completely rational decision- makers in real life. Rationality in decision-making is restricted due to several constraints or limitations. Simon introduced the concept of bounded nationality to describe the actual behaviour of decision-makers. 1. Rational Economic Model: The decision based or rational based logical based our economic game.

2. Satisfying Administrative Models: That is against rational decision maker more economic but this model the decision maker are administrative. It is a satisfactory decision satisfy many people. 3. Psycological Model: Psycological Model based on assumption the human being wants to maximize your gain and minimise the loss. 4. Organization Decision Model: 5. Burocratic Model: Government decision, Cost consuming and Time limit. 6. Political Model: Negotion between loss and benefits (bargaining) between parties General agreement on a larger objectives this model is not analytical effect on the lowest operative is Considered. 7. Incremental Model: In Incremental Model the decision are net sequential, incremental step, Implemental model the minimization of reactive. 8. Garbage Model: Garbage Model the Generally the decision emergency automatically outcome, Urgently and if the decision is wrong then it will auto corrected. It is the sociological aspect. GROUP DECISION-MAKING GROUP DECISION-MAKING Decision-making is an act of choice wherein an individual or a group selects a particular course of action from the available alternatives in a given situation. The basic characteristics of the decision-making process are as follows: It is a human process involving to a great extent the application of intellectual abilities. It is a process of choosing a course of action from among the alternative courses of action. Decision-making in business is always related to certain objectives, It is the end process preceded by deliberation and reasoning. It is always related to a situation. A manager may take one decision in a particular set of circumstances and another in a different set of circumstances. It involves some commitment, may be even for a short period,

Decision-making is at the core of managerial planning. It involves establishing goals, dinning tasks, searching for alternatives an choice of the best alternative. In an organisation, decision-making may be carried out .by both individuals and groups. In modern organisations facing the environmental uncertainties, group decision-making has become almost indispensable. MERITS OF GROUP DECISION-MAKING: Group decisions are likely to be implemented effectively. The group members who have participated in taking the decision jointly are supposed to lend full support to the decision because of their greater commitment to the decision. Group decision-making can be used as a training ground for new members to learn decision-making and communication skills. Thus, it can serve as an instrument of human resource development The knowledge base of the group is greater which can help in taking better decisions. The group members may ha different specialities as in case of crossfunctional teams. The input from the members of the group can eliminate the biases that are generally introduced in the process of individual decision-making. It also reduces the unreliability of individuaPs decisions. The group format allows participation of group members in the decision making process. This can lead to better decisions besides providing satisfaction to the participants. DANGERS OF GROUP DECISION-MAKING: A group may take a decision that is simply a compromise between the various views held by the individual method Group decision-making is a time-consuming process. Usually, a group takes more time in reaching a decision since there are many opinions to be taken into consideration. Group decision-making may be affected by the problem of group. Think. Under this, the desire of the group members for complete consensus may override their motivation to disagree with an alternative or to evaluate other available alternative.

 Group decision making may prove to be more risky than individual. Decision making since it is a collective decision the group may be tempted to take more than warranted by the situation. PROBLEM SOLVING IN DECISION MAKING Simple process for Problem-solving and Decision-making: Problem solving and decision-making are important skills for business and life. Problem-solving often involves decision-making, and decision-making is especially important for management and leadership; There are processes and techniques to improve decision-making and the quality of decisions. Decisionmaking is more natural to certain personalities, so these people should focus more on improving the quality of their decisions. People that are less natural decisionmakers are often able to make quality assessments, but then need to be more decisive in acting upon the assessments made. Problem-solving and decisionmaking are closely linked, and each requires creativity in identifying and developing options, for which the brainstorming technique is particularly useful and the free SWOT analysis template and examples, and PEST analysis template, which help decision-making and problem-solving. SWOT analysis helps assess the strength of a company, a business proposition or idea; PEST analysis helps to assess the potential and suitability of a market. Good decision-making requires a mixture of skills: creative development and identification of options, clarity of judgment, firmness of decision, and effective implementation. For group problem-solving and decisionmaking, or when a consensus is required, workshops help, within which you can incorporate these tools and process as appropriate. Here are some useful methods for effective decision- making and problem-solving: First a simple step-by-step process for effective decision- making and problem-solving. FOUR PSYCHOLOGICAL TYPES OF DECISION MAKERS a) Intuitive: led by intuition; concentrate on the possibilities; avoid the details and tend to look at the bigger picture. b) Thinkers: are analytical, precise, and logical; process a lot of information, often ignoring the emotional or feeling aspects.

c) Feelers: are interested in the feelings of others; dislike intellectual analysis and follow their own likes and dislikes; enjoy working with people and are capable of great loyalty. d) Sensors: see things as they are ; have great respect for facts; have an enormous capacity for detail and seldom make errors; are good at putting things in context. DECISION MAKERS & INFLUENCER In the context of industrial goods marketing, there is much theory, and even more opinion, expressed about how the various ?decision and influencers (those who can only influence, not decide, the final decision) interact. Decisions are frequently taken by groups, rather than individuals, and the official buyer often does not have authority to make the decision. DECISION MAKING IN DIFFERENT AREAS Decision making in business and management: In general, business and management systems should be set up to allow decision making at the lowest possible level. Several decision making models or practices for business include: SWOT Analysis - Evaluation by the decision making individual or organization of Strengths, Weaknesses, Opportunities and Threats with respect to desired end state or objective. Analytic Hierarchy Process - procedure for multi-level goal hierarchy. Buyer decision processes - transaction before, during; and after a purchase. Complex systems - common behavioral and structural features that can be modeled. Corporate finance The investment decision The financing decision The dividend decision working capital management decisions

 Cost-benefit analysis - process of weighing th total expected costs vs. the total expected benefits. Control- Ethics, a decision making framework that balances the tensions of accountability and best outcome. Decision trees: -Program Evaluation and Review Technique (PERT) -critical path analysis -critical chain analysis Force field analysis - analyzing forces that either drive or hinder movement toward a goal. Grid Analysis - analysis done by comparing the weighted averages of ranked criteria to options. A way of comparing both objective and subjective data. Hope and fear (or colloquially greed and fear) as emotions that motivate business and financial players, and often bear a higher weight that the rational analysis of fundamentals, as discovered by neuro economics research. Linear programming - optimization problems in which the objective function and the constraints are all linear. Mm-max criterion. Model (economics)- theoretical construct of economic processes of variables and their relationships. Monte Carlo method - class of computational algorithms for simulating systems. Morphological analysis - all possible solutions to a multi-dimensional problem complex optimization -constrained optimization. Paired Comparison Analysis - paired choice analysis. Pareto Analysis - selection of a limited of number of tasks that produce significant overall effect. Robust decision - making the best possible choice when information is incomplete, uncertain, evolving and inconsistent. Satisfying - In decision-making, satisfying explains the tendency to select the first option that meets a given need or select the option that seems to address most needs rather than the optimal solution.

 Scenario analysis - process of analyzing possible future events. Six Thinking Hats - symbolic process for parallel thinking. Strategic planning process - applying the objectives, SWOTs, strategies, programs process. Decision Making & Information System (MIS): Management Information System (MIS) is the system of organising the information networks and flows within the organisation. It invol.ves systematic generation of information from, both internal and external sources. MIS is meant for assisting managers in their decision-making function and not s a substitute for managerial system. Information is the basic input for decision-making. The quality and timeliness of information determines the effectiveness of decision-making. It is for this reason that decision-making is sometimes considered as the .processing and conversion of information into action. Information is required at almost every stage of the decision- making process. Information helps managers in defining and diagnosing the problem, in developing and evaluating alternative courses of action and in selecting. the best alternative. However, info is not a substitute for managerial skills and judgment in decision-making. The most widely used model of the decision-making process was developed by Herbert A. Simon, a Nobel Prize-winning economist and scholar of management decision making. His model is a conceptual framework that divides the decisionmaking process into intelligence, design, and choice activities [ Other researchers have emphasized that since managerial decision making is typically a problemsolving, the implementation decision is as important to its success as the steps that lead up to making it [ Therefore, we can use a model of decision making that consists of four stages: 1. Intelligence activities: Search the environment and identify events and conditions requiring decisions. 2. Design activities: Develop and evaluate possible courses of action. 3. Choice activities: Select a particular course of action. 4. Implementation activities: Implement the decision and monitor its success.

This four-stage decision-making process includes the ability to cycle back to a previous stage if the decision maker is dissatisfied with the intelligence gathered, the alternatives developed, or the success of implementation activities. Also note that each of these stages of decision making has unique information requirements, which we will now explore. 1. Information for the intelligence Stage: Information systems can help in the intelligence stage by providing information about internal and external conditions that might require decision making by appropriate managers. Thus, information systems can be used to scan the operations of an organization or the activities taking place in the business environment. hiformation systems can also scan the external environment to identify potential decision situations. Sales analysis reports can be furnished to managers periodically, when exceptional sales situations occur, or on demand. These help managers identify the status of sales performance, sales trends and exceptional sales conditions for the firm. Information from market research studies and external databases could also help managers identify changes in consumer preferences or competitive products. An important information system capability is needed in this stage. Managers should have the-ability to make ad hoc inquiries, that is, unique, unscheduled, situation specific information requests. The prespecified reports typically provided by information reporting systems periodically, on an exception basis, or even on demand may not besatisfactory. Such information products may not give a manager enough information to recognize whether a problem or opportunity exists.

A MODEL OF DECISION MAKING PROCESS

2. Information for the Design Stage: The design stage of decision making involves developing and evaluating alternative courses of action. A major consideration introduced by Simon for this stage (as well as for the other stages) is whether the decision situation is programmable or nonprogrammable, or, more popularly, structured or unstructured. The amount .of structure in typical decisions faced by each level of management, based on the work of G. Anthony Gorry and Michael Scott Morion [ Their work emphasized that many of the changes in managers information needs can be attributed to the degree of decision structure at each level of management. Decisions at the operational level tend to be more structured, those at the tactical level more semistructured, and those at the strategic level more unstructured. Therefore, information systems must be designed to produce a variety of information products to meet the changing decision needs of managers at different levels of an organization. The inventory reorder decisions faced by most businesses are frequently quantified and automated. Inventory control software includes decision algorithms that outline the computations to perform and the steps to take when quantities in

inventory are running low. Computing economic order points and quantities is a typical example. Thus, one way that information systems can support structured decisions is by quantifying and automating a decision-making process. In other cases, prespecified information products such as periodic reports can provide most of the information needed by a decision maker faced with a structured decision situation. Decision support systems and expert .systems can give managers such assistance. Models of business operations can be developed with decision support software, including advanced statistical, management science, and modeling packages, or less-complex spreadsheet programs. These packages and models can then be used to manipulate information collected in the intelligence stage to develop and evaluate a variety of alternatives. A sales analysis display generated by a popular executive information system with DSS capabilities. 3. Information for the Choice Stage: Information systems should help managers select a proper course of action from the alternatives developed during the design stage. Of course, this assumes that enough information was gathered during the intelligence phase and that a sufficient number of alternatives were developed and evaluated during the design stage. If not, the manager may choose to return to those stages for more data or alternatives. However given the time and resource constraints of the real world, most decision maker; will choose to satisfied rather than optimize when faced with a decision situation. That is, they will rarely act as rational economic beings who insist that all relevant information be gathered, that all rational alternatives be considered, and that only the optimum alternative be chosen. Instead, they will act with what Simon calls bounded rationality. That is, they will be satisfied to make a decision based on incomplete information and a limited number of alternatives if it meets some of their subjective preferences and produces an acceptable level of results. In any case, information systems can help managers in the choice stage in several ways. Manager can be provided with summarized and organized information emphasizing the main points (such as major assumptions resource requirements, and expected results) of each decision alternative. Various financial and marketing ratios and other methods can-also be used to prioritize alternatives and thus help managers select the best course of action.

4. Information for the Implementation Stage: The implementation stage involves accomplishing activities that implement the decision alternative selected during the choice stage. It also involves monitoring the success of the decision after it is implemented. Information systems can help managers monitor the successful implementation of a decision. They can provide feedback about business operations affected by the decision that was made. This helps a manager assess a decisions success or faijure and determine whether follow- up decisions are needed. If a decision to cut promotion costs is made. a sales manager can monitor the decisions effects on sales activity. If a larger drop in sales occurs than was expected, the manager must then decide what actions to take to correct the problem. The decision making process then begins all over again, Decision Making in Ones Personal Life: Some of the decision making techniques that we use in everyday life include: 1. listing the advantages and disadvantages of each option, popularized by Benjamin Franklin. 2. flipping a coin, cutting a deck of playing cards, and other random or coincidence methods. 3. accepting the first option that seems like it might achieve the desired result. 4. prayer, tarot cards, astrology, augurs, revelation, or other forms of divination. 5. acquiesce to a person in authority or an expert. DECISION MAKING SOFTWARE Due to the large number of considerations involved in many decisions, computerbased decision support system (DSS) have been developed to assist decision makers in considering the implications of various courses of thinking. They can help reduce the risk of human errors. DSSs which try to realize some human/cognitive decision making functions are called Intelligent Decision Support Systems (IDSS)

THE ENVIRONMENT OF DECISION MAKING The environment in which decisions are made and implemented may be of the following types: 1. Certainty: Under conditions of certainty, full information is available .on all the factors relevant to the decision. The decision-maker knows exactly the outcome of each alternative. The information reliable and is easy to get. The future is highly predict able. It is therefore possible to choose the best alternative. For example, a manager who decides to invest Rs. one lakh in 10 percent ten year Government bonds knows that the investment will earn exactly 10 percent interest and will mature at the expiry of ten years. Relatively very few managerial decisions are made in an environment of certainty. Deterministic decision models are used in such an environment. 2. Risk: In an environment characterized by risk, some information about the decision situation is available but it is not fully reliable. The decision-maker may be able to develop alternative course of action but their outcomes are not certain. Only the probabilities of various outcomes are known. In the absence of full and reliable information future conditions cannot be predict accurately. Probabilities to different outcomes can be assigned on the basis of available information and personal experience. For instance, a life insurance company can predict the percentage of people of a certain age dying each year. On the basis of such prediction. It decides the amount of premium to be collected to pay claims and still earn a profit. 3. Uncertainty: Under conditions of uncertainty everything is in a state of flux. Information is neither available nor reliable. Several random forces operate in the environment making it unpredictable. The decision-maker does not know the outcomes of alternative courses of action and he cannot determine the probability of potential outcomes. Judgment, past experience and intuition play a vital role in decisionmaking.

In the real world, the environment of decision-making may contain all the three elements. The decision-maker may have full information on certain factors, partial information on a few and no information on others. With the availability of additional information, uncertainty may become risk and risk may become certainty. At the same time new situations may become risk may emerge about which very little is known. Thus certainty, risk and uncertainly constitute a continuum. ROLE OF CREATIVITY IN DECISION MAKING Creativity is the human faulty of generating new, novel, unique and improved ideal insights or approaches to do things, to solve problems, to make decisions and to resolve crises or conflicts. It is the ability to think originally. It is not a superhuman or supernatural ability but a reflecting process. It is a distinct human attributed that calls for an open mind, rich imagination and courage to think in an unconventional manner. Creativity is different from innovation. Creativity is the process of generating new idea while innovation involves the translation of the idea into a new product or service. Creativity is widespread but innovation is rare. Innovation requires much more time and resources than creativity. However, creativity and innovation an sequentially related to each other. An effective organisation requires both creative and innovative people to achieve its goals Creative ideas are of no use until they an converted into useful products and services. Similarly, innovations are not possible without creative ideas. Creative flourishes best in a dynamic and tolerant atmosphere. Individuals differ in their ability to be creative. Creative people can be bothersome because they generate a high degree of conflict and controversy in the organisation. They appear irrational because they do not believe in conventional wisdom. Creativity may be counter productive when decisions must be made quickly to overcome some urgent crisis. In such situations, experience, commonsense and decisiveness are more important. Creativity has a limited role when the external environment policy, trade union militancy, competitive pressures and so on. The creative approach to decision-making is characterised by the following features.

 It does not take things for granted. It challenges the obvious facts of the problem. The problem is redefined and restructured in new ways. It looks at problems and alternatives from new perspectives It raises novel questions and seeks answers to them. It questions and rejects the conventional and established ways of doing things. It breaks new grounds and seeks novel methods to get results. It deviates from rational, orderly and step by step procedure of decisionmaking. It puts forth wild and reflective ideas which are apparently unrealistic and irresponsible. They question authority and upset routine. They tend to be more flexible and independent. Creativity plays a vital role in decision-making and problem-solving. It helps individuals and groups to arrive at better decision. Several human and organizational problems are open ended, complex and unstructured. These are not amenable to stereotyped and scientific approaches, and require a creative techniques. Creative approaches are more effective in solving problem of rising costs, declining sales deteriorating quality, low motivation and morale, industrial unrest, poor image and so on. Creativity is especially helpful in perceiving problem and in generating alternative courses of action. Creative people are enterprising and come out with of beat ideas by deviating from the beaten track. Creativity enables an organisation to find new and better ways of accomplishing its goals. It also enables the organisation to anticipate change. This has become very important as new technologies, products and methods of operation make old one obsolete. Thus, creativity is a vital ingredient successful decision-making. Creativity by itself enough in decision-making unless the creative ideas are capable of being implemented. Creative decisions are good to the extent that they help improve the results. Creative decisions should be feasible. Creativity is not necessarily a divine gift. It can be stimulated through training and experience. It however requires a proper atmosphere .to flourish. Creative faculty gets when unquestioned conformity and obedience are insisted upon. Managers inhibit creativity by imposing rigid procedure and rules, by creating fear of criticism and so on. In order to foster creativity, managers should encourage new

ideas, permit pen communication tolerate reasonable mistake, recognize and reward creative efforts, and overcome resistance to change.

CONCLUSION Decision making is the process of deliberately selecting a course of action from available alternatives for achieving the desired objective. Decision making a ubiquitous function because it is inherent in all managerial functions, Programmed and non-programmed, strategic and tactical, individual and group decisions.