PRESENTED BY:

WHAT IS DECISION MAKING??

In its simplest sense, decision-

making is the act of choosing
between two or more alternatives.
 CHARACTERISTIC OF DECISION MAKING
Following are the characteristics of decision-making:

 1. Decision-making is based on rational thinking. The

manager tries to foresee various possible effects of a
decision before deciding a particular one.

 2. It is a process of selecting the best from among

alternatives available.

 3. It involves the evaluation of various alternatives

available. The selection of best alternative will be
made only when pros and cons of all of them are
discussed and evaluated.
 4. Decision-making is the end product because it
is preceded by discussions and deliberations.
 5. Decision-making is aimed to achieve
organizational goals.
 6. It also involves certain commitment.
Management is committed to every decision it
takes.
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:
 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.
 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.
 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.
 DECISION MAKING STEPS

 Identify the decision

 Gather information

 Identify alternatives.

 Weigh the evidence

 Choose among alternatives.

 Take action.

 Review your decision.

DECISION TYPES:

 Individual & Group Decision

 Organizational & Personal Decision

 Routine & Strategic Decision

 Policy & Operating Decision

 Programmed & Non-Programmed

 INDIVIDUAL: When is taken by individual in the
organization.

 GROUP: It refers to the decision which are taken

by group of organizational members.

 ORGANIZATIONAL: These are those which a

manager takes in his official capacity.
 PERSONAL: These are those which a manager
takes in his official capacity.
 ROUTINE: These are made repetitively following
certain established rules.
 STRATEGIC: Made on the problems which are
important. Require thorough fact finding analysis
of the possible alternatives.
 POLICY: Determine the basic policies of the
organizations & are taken at top level
management.

 OPERATING: are less important & related with

day-today operations of the business. Middle and
lower management take these decisions since
these involve actual execution and supervision.
 Programmed: Decisions that are simple and
routine and have a pre established decision
making plan.

 Non-Programmed: Decisions that are new and

complicated and require thought and creativity.
MODERN APPROACH TO PROBLEM SOLUTION

BRAINSTORMING:
 -is a method for generating ideas to solve a design
problem. It usually involves a group, under the
direction of a facilitator. The strength of brainstorming
is the potential participants have in drawing
associations between their ideas in a free-thinking
environment, thereby broadening the solution space.
 Delphi method
is a forecasting process framework based on the
results of multiple rounds of questionnaires sent
to a panel of experts. Several rounds of
questionnaires are sent out to the group of
experts, and the anonymous responses are
aggregated and shared with the group after each
round.
FACTORS AFFECTING IN DECISION MAKING:

 Whenever we are involved in making decisions a

number of factors can affect the process we follow
and ultimately the decision we make. They can be
organized into three major groups:
 Perception Issues
 Organizational Issues
PERCEPTION ISSUES: Perception can be described as
the way in which individuals interpret their environment.
Perception can be influenced by the following:
 The perceiver, the types of personal characteristics
that can affect an individual's perception include:
 Background and experience
 Personal values
 Personal expectations
 Personal interests
 The situation: Time, location and other situational
factors can influence our perception of an object.
ISSUES WITHIN THE ORGANIZATION: A number of
organizational issues can impact on the decision
making process. These issues include:
 Policies and procedures
 Organizational hierarchy
 Organizational politics
 POLICIES AND PROCEDURES :Many
organizations have formalized policies and
procedures which have been developed to resolve
common problems and to guide managers when
making decisions.
 ORGANISATIONAL HIERARCHY : Organizational
hierarchy refers to the management structure of
the organization. Most organizations have
different levels of management which carry with
them different degrees of authority.
 ORGANISATIONAL POLITICS : Organizational
politics refers to behavior displayed by individuals
and groups which is designed to influence others.
Personal factors
 Personal Demographics: age, gender, stages in
life cycle, education, occupation, economic
position, etc.
 Personal psychographics: includes lifestyle,
attitudes, self-concept, concern about status,
value systems, beliefs etc.
Cultural factors
Culture: combined resulted of factors like religion,
traditions, taboos, language, education,
upbringing, established pattern of social behavior,
values (core & secondary)etc.
Social class: it is determined by the education
level, wealth, occupation, profession &
designation, location of residence, values, and
behavior of its members.
 Social Factors Influence of reference group:
Intimate groups: e.g. family, friends, peer groups,
close colleagues & close-knit organizations.
Face-to-face & frequent interactions are
characteristic feature of the group.
Secondary groups(including Opinion leaders):
based on occupation, profession place of
residence, etc., of the members.
 Information
information, should be authentic, reliable,
adequate and must be available at time. So
enough time must be there to analyze the
problem.
It reduces the uncertainty.
Too much information or information over-load
creates confusion & delay in decision making.
 Psychological factors
Motivation: it all begins with needs.
Perception: According to consistency theory one
mostly listen to things that support one’s existing
belief system.
Learning Process: People do change their beliefs,
faiths, likes & dislike which happens through
learning .
 RISK AVERSION on PUBLIC MANAGERS

 RISK: possibility of loss or injury.

 AVERSE: having an active feeling of repugnance,

dislike, or distaste.
Some of the issues related to RISK AVERSION of PUBLIC
MANAGERS

1.Operating in Silos

2.Bureaucratic Innovation

3.The Perceived Management of

Change