worker/employees in organizations make decisions or make choices that affect their jobs and the organization they work for. This lesson’s focus is on how they make decisions by going through the eight steps of the decision- making process suggested by Robbins and Coulter (2009). TYPES OF DECISION MAKING A decision is a choice among possible alternative actions. Like planning, decision making is a challenge and requires careful consideration for both types of decisions, namely:
STRUCTED OR PROGRAMMED DECISION- a
decision that is repetitive and can be handled by using a routine approach. Such repetitive decision applies resolving structured problems which are straightforward, familiar and easily defined. For example a restaurant customer complains about the dirty utensils the waiter has given him. This is not unusual situation, and therefore standardized solutions to such a problem may be readily available. UNSTRUCTED OR NONPROGRAMMED DECISIONS- applied to the resolution of problems that are new or unusual, and for which information is incomplete. Such non programmed decision are described to be unique, nonrecurring and need custom-made decisions. For example, a hotel manager is asked to make decision regarding to the building of a new hotel branch in another city to meet demands of business there. This is an unstructured problem and therefore needs un structured or non programmed decisions to resolve it. TYPES OF DECISION MAKING CONDITIONS Certainty Conditions- ideal conditions in deciding problems; these are the situations in which a manager can make precise decisions because the results of all alternatives are known. For example, bank interest are made known to clients so it is easier for business managers to decide on the problem of where to deposit their company’s funds . The bank which offers the highest interest rate, therefore, is the obvious choice of the manager when asked to make a decision. STEPS IN DECISION MAKING
1. Define Problem/Issue- the objective has been set, and
there is an obstacle toward to the realization of the objective. As a result, before a problem does exist and becomes an issue there must be an objective identify which problem is threatening. That problem must be identified and isolated. Care must be taken so as not to confuse symptom of the problem from the actual problem at stake. For example, there can be smoke in the factory but what is causing the smoke is the fire. Attacking the smoke is a sheer waste of time because the fire will continue to produce fresh smoke. The only way to put an end to the smoke is to quench the fire relevant means or a combination of means. 2. Collect relevant data- this is where the information gathered in the management function of forecasting will be useful. The assumptions made will be further subjected to analysis so as to determine the relevance to the problem stake. Company records also part of the data which have to be processed. 3. Develop alternative solution- the solution can never be one because if it so then there can be no choice. The idea of choice suggest that at least there must be two solutions to the existing problem. Out of these solutions, there can be a choice. 4. Assess the con sequences- the manager Should be determine the required resources needed in selecting an option. He should find out if such resources do exist and if they can be put to alternative use that can bring better benefits. He must ensure that the organization can handle the option and that such option is capable of tackling the problem effectively. 5. Select the Optimum Solution- the solutions having been worked out and ranked in order of preference, the next stage is to choose. And the choice should be the most feasible one after taking several factors into consideration the objective and the problem at stake. RISK OR UNCERTAINLY CONDITIONS- are more common condition in deciding problems. Risk or uncertainty conditions compel the decision maker to do estimates regarding the possible occurrence of certain outcomes that may affect his or her chosen solution to a problem. Historical data his or her own experiences and other secondary information may be used as bases for decisions to be made by the decision maker under such risk conditions. For example, a manager is asked to invest some of their company funds in the money market offered by a financial institution. Risk factors must be considered, because of the certainty conditions involved, before making a decision- whether to invest or not in the said money market. 6. Implement Solution- while implementing, there should be built-in motivational system that will enable problem to be tackled satisfactorily. Job plan should be developed spelling out the necessary activities to be done, who is to do them, how they are going to be done and at what time. 7. Measure Result- while implementing, there must be control and feedback. To achieve this, there should be regular reports on performance. The reports should then be compared with the objective. If there is a deviation, this means that there is no effective solution yet to the problem. Such as deviation should be quickly corrected.