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Decision Making by Dr Bashaar Ulfat

Decision Making by Dr Bashaar Ulfat

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Published by ulfat
Prepared and Edited by Dr. Mohammad Bashaar Ulfat
MD, MBA
Prepared and Edited by Dr. Mohammad Bashaar Ulfat
MD, MBA

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Published by: ulfat on Aug 06, 2007
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01/30/2013

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Decision MakingBy: Dr. Mohammad Bashaar UlfatMD, MBAQ1.What is the process of decision making? Discuss how does decision making fitinto managerial activity?Decision-making is a process of choosing among alternative courses of action inorder to attain goals and objectives. Nobel laureate Herbert Simon wrote that thewhole process of managerial decision-making is synonymous with the practice ofmanagement.1 Decision-making is at the core of all managerial functions. Planning,for example, involves deciding what should be done? When? How? Where? and By whom?Other managerial functions, such as organizing, implementing, and controlling relyheavily on decision-making.Today’s fast changing and global environment dictates that a successful enterprisehas a rich decision-making process. This means not only gathering and processingdata, but also making decisions with the support of state-of-the-art decisionmethods. Decision-making is the very foundation of an enterprise, and sounddecision-making is absolutely necessary for gaining and maintaining a competitiveadvantage.In many enterprises the decision process entails great time and effort ingathering and analyzing information. Much less time and effort go into evaluatingalternative courses of action. The results of the analyses (there are often many,for example financial, marketing, operations, and so on) are intuitivelysynthesized to reach a decision. Research has shown that although the vastmajority of everyday decisions made intuitively are adequate, perception alone isnot sufficient for making complex, crucial decisions. Organizations that usemodern decision support methods can gain and maintain a competitive edge inleading and managing global business relationships that are influenced by fastchanging technologies and complicated by complex interrelationships betweenbusiness and governments.An individual can solve problems more realistically when he/she uses a decision-making process. This process, when understood and applied, can assist you inmaking study and vocational decision(s) and future decisions, about your life.One thing to remember is that you are in charge of any decisions to be made. Youmay seek help and advice from other people and other sources, but the finaldecision must be made by you.There are several steps involved in the decision-making process:1. Reaching a decision-point (Defining the problem)2. Exploration of the problem (Gathering information)3. Evaluation of information (Weighing the evidence)4. Choice of a plan of action (Choosing possible alternatives)5. Taking action on your plan6. Clarification and review of plans (Outgoing - Ongoing)1. Reaching a Decision Point (Defining the Problem)A decision point is reached when you become aware of a specific problem and seethe need to make a decision. Before you can solve a problem however, you have toknow what the problem is. You must be able to interpret the entire picture sothat the problem is clearly understood. For example, if you want to plan and
 
establish an educational plan to reach a career goal you might work towardarriving at well-considered answers to the following questions:1. For what kind of career am I best suited?2. For what kind of an alternative career am I best suited?3. For what kind of education and training am I best suited?4. For what kind of alternative education or training am I best suited?2. Exploration of the Problem (Gathering Information)This is the initial activity of decision-making in which you think about all ofthe possibilities related to the problem and the decision. You must look for allthe alternatives open to you before you make a decision. This is done bycollecting relevant information. Some areas important to vocational decision-making which should be investigated are:1. Physical attributes and health2. Leisure experiences3. Work experiences4. Opinions of parents and others5. Values and standards6. Study - the amount of time and efficiency of your studying7. Marital plans8. Financial needs9. Social status needs10. Academic ability and achievement11. Personality traits12. Interests13. Occupational and education facts (information about occupation, requirementsof different kinds of jobs, educational level necessary, etc.)3. Evaluation of Information (Weighing the Evidence)You should consider all of the alternatives open and how they are related to you.This step is the one in which each bit of information gathered is consideredseparately and then as a whole. You should be able to evaluate where you standconcerning the above individual areas and to the total picture.4. Choice of Plan of Action (Choosing Possible Alternatives)In this step you choose between the alternatives open to you, remembering thatthe information you gathered will vary in importance to you. In this step youshould be able to answer the following questions:1. What is the best vocational choice you can make?2. What is the second best choice?3. What is the best educational course to follow?5. Taking ActionIn this step you take action on the plans you made in step number 4. How can youimplement these plans (educationally, training, etc.)?6. Clarification and Review of PlansIn this step you make periodic examinations of your choice and plans. You shouldcontinually check to make sure your decision is the best one possible at the time.You may have to review your decision due to new information and new experiences.Therefore, at times, you may see the need to alter your plans. Also, reviewing
 
will help you see that the decision-making process leads to sound plans and youwill have logical reasons why you decided upon the educational and careerobjectives that you did.The Need for Better Decision-making:Few people today would doubt the importance of relevant information when makingvital decisions. Yet many people are unaware of the need for a logical approach tothe decision itself. They consider it sufficient to collect data, analyze thedata, and then simply “think hard” in order to arrive at a good decision. They useseat of the pants approaches or simplistic strategies for analyzing theirdecisions. In his book, Crucial Decisions, Irving Janis provided evidence that “Apoor-quality decision-making process (which characterizes simplistic strategies)is more likely than a high-quality process to lead to undesirable outcomes(including disastrous fiascoes).” He asserted “When all vital decisions are madeon the basis of a simplistic strategy, the gross misperceptions andmiscalculations that remain uncorrected are likely to lead to disaster sooner orlater — usually sooner rather than later.”3 There are some who have alreadyrecognized the need for what Janis called vigilant decision-making. Janis stated:“When executives are asked how they go about making the most consequentialdecisions, some of them acknowledge that when they believe the stakes are reallyvery high, they do not stick to the seat-of-the pants approach that theyordinarily use in daily decision-making. In fact, their accounts of what they doin such circumstances are not very different from the analytic problem-solvingapproach recommended in most standard textbooks in management sciences.” One ofthe difficulties in using the analytical problem solving approaches found inmanagement science textbooks, however, is that they are predominantly quantitativeapproaches — incapable of incorporating the qualitative factors so important invital decisions. We will, in this book, look at and resolve the quandary posed bythe need to synthesize quantitative and qualitative factors in a decision process.Decision-making is undoubtedly the most difficult and most essential task amanager performs4. Executives rate decision-making ability as the most importantbusiness skill, but few people have the training they need to make good decisionsconsistently.Some of these techniques are counter intuitive and therefore extremely difficultto learn by trial and error. Experienced golfers love to watch athletic baseballplayers’ step up to the tee and swing as hard as they can, only to miss the ballcompletely. A golf instructor can quickly teach the athletic baseball player whatis not intuitive — that the left arm (for a right-hander) should be kept almoststraight, unlike during a baseball swing, and that swinging easier will usuallymake the golf ball go further. Techniques like ‘keeping your head down’ (or ‘eyeson the ball’), work well in several sports, like golf, tennis and baseball. Butsomeone who has not played any of these sports will intuitively ‘lift’ their headto see where the ball is going before the swing is completed.Every decision making process produces a final choice. It can be an action or anopinion. It begins when we need to do something but we do not know what.Therefore, decision making is a reasoning process which can be rational orirrational, and can be based on explicit assumptions or tacit assumptions.Common examples include shopping, deciding what to eat, when to sleep, anddeciding whom or what to vote for in an election or referendum.Decision making is said to be a psychological construct. This means that althoughwe can never "see" a decision, we can infer from observable behaviour that adecision has been made. Therefore, we conclude that a psychological event that wecall "decision making" has occurred. It is a construction that imputes commitmentto action. That is, based on observable actions, we assume that people have made acommitment to affect the action.

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