In order to improve decision-making under these conditions, one may estimate the objective probabilities of an outcome by using, for example, mathematical models. 5.Discuss the characteristics of group decision making. Meaning and Definitions of Decision Making 2. Past experience of a person becomes a good basis for taking decisions. 6. ———————– Our book recommendations on strategic decision making. All problems may not require decision- making but merely the supply of information may be sufficient. A decision represents a course of behaviour chosen from a number of possible alternatives.” The way an executive acts or decides the course of action from among various alternatives is an act of decision-making. Strategic decisions exercise great influence on the functioning and direction of the organization and have long-term implications. 4. The word “decision “is derived from the Latin word “decido”. In a risk situation, factual information may exist but it may be insufficient. So, decisions often tend to be a balancing of the firm’s various interest groups rather than the most optimal solution. Experience should not be followed blindly. There are a number of tools available which help a manager in taking decisions under such conditions. It helps managers by providing scientific basis for solving organizational problems involving interaction of components of the organization. Comments (0) Add to wishlist Delete from wishlist. Managers, generally, complain of insufficient information. Most of the business decisions are taken under risk conditions. These decisions are concerned with routine and repetitive matters arising out of the working of the organization. If decision premises do not come true, then decision itself may be wrong. 3. These can vary from classical, rationalistic, decision making processes to less structured, subjective methods. Managers often do not realize the various traps that exist while taking decisions. Generally, strategic or other important decisions are taken by groups instead of individuals because of risk involved. Process and Steps 7. Decision-making is a focal point at which plans, policies, and objectives are translated into concrete actions. The strategy of taking decisions under different conditions vary. Such decisions require more resources, judgment and skill. Different decisions differ in nature and significance. Decision-making has become a complex problem. Principles 9. Group decisions are generally time consuming but otherwise these are well discussed decisions. Decisions help in solving problems or resolving conflicts. 2. Such decisions will be sound and proper. TOS 7. One of the most important tasks of management is to allocate these resources effectively and efficiently to achieve the company’s goals and objectives. Three key factors that are an impediment to good decisions are information quality, human filters and resistance to change. Your email address will not be published. Under such situations a deterministic model is used, in which all factors are assumed to be exact with the chance playing no role. This site uses Akismet to reduce spam. Some common traps include: Great information about decision making. Elements 8. Non-programmed decisions are related to problems which are unique and non-repetitive. The decision-maker has his own preferences, influences, psychological make-up and these things play a vital role in taking a decision. Prohibited Content 3. The decisions may also emerge from answers to pertinent questions about the problem. The leader of the group or an important manager of a concern sets the precedent and others silently follow that decision. It involves the evaluation of various alternatives available. The effect of a decision is to be felt in future so it requires proper analysis of available material and a prediction for the future. It is a human process involving to a great extent the application of intellectual abilities. It is a human process involving to a great extent the application of intellectual abilities. Meaning of Decision Making: Decision Making is an important function in management, since decision-making is related to problem, an effective decision-making helps to achieve the desired goals or objectives by solving such problems. Such decisions are made under new and unfamiliar circumstances. Such decisions are generally taken as per predetermined rules and procedures and require less application of judgment and skill. The estimates may be based on past experience, other available information or intelligence. A manager may take one decision in a particular set of circumstances and another in … It involves all actions like defining the problem and probing and analyzing the various alternatives, which take place before a final choice is made. Management is committed to every decision it takes. The impact of these decisions is fairly long because expansion, growth, development and profitability of the organization is linked to them. Though past experience is a good basis but present situations should be properly analyzed and assessed before taking a decision. Facts are considered to be the best basis of decision-making. Decision problems necessitate a choice from different alternatives. Let's have a look at the decision making process in detail. The decisions of Board of Directors or Committees come under this category. The past knowledge, training and experience of the decision-maker plays an important role in intuitive decisions. The available information does not answer overall questions about the outcome of the decision. Let us make an in-depth study of Decision-Making:- Techniques and Methods 6. Plagiarism Prevention 4. Decision-makers should mature, experienced, knowledgeable and rational in their approach. 5.Discuss the characteristics of group decision making. 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