Question: “Decision Making is the primary task of the managers.” – Explain.

Answer: Decision Making- A Primary Task Of The Managers, yes it's true. A manager is faced constantly with choices in which a good decision will advance the fortunes of the enterprise and a bad decision will not. The manager who understands the nature and principles of decision making will cope with this problem more effectively than the manager who does not. If there is one universal mark of an effective manager, it is decision-making. All matters relating to planning, organizing, staffing, directing and controlling are settled through decisions made by managers. Decisions are required both to solve problems as well as to take advantage of opportunities. Based on the decision making a manager gives direction to the behaviour of his subordinates. Consciously or unconsciously, every executive has to take several decisions everyday irrespective of the nature of job and the level of authority. Managers are chiefly concerned with making decisions that will influence the actions of others. A manager is by profession a decision-maker. Thus, decision making is the heart of management planning. It is the vehicle for carrying out managerial workload and discharging managerial responsibilities. Question: Discuss the steps involved in the decision making process. Answer: Decision making is the process of choosing a particular course of action from among the alternatives available. Arriving at a decision implies that a manager has gone through a series of systematically relate steps. These steps of the decision making process includes: 1. Identify the problem 2. Develop alternative solutions 3. Evaluate alternative solution 4. Make a choice

1: Decision Making Process Step 1 (Identify the problem): The first step towards a decision-making process is to define the problem. Obviously, there would be no need to make a decision without having a problem. So, the first thing one has to do to identify the problem. Step 2 (Develop alternative solutions): After the problem has been defined, diagnosed on the basis of relevant information, the manager has to determine available alternative courses of action that could be used to solve the problem at hand. Only realistic alternatives should be considered. It is equally important to take into account time and cost constraints and psychological barriers that will restrict that number of alternatives. Step 3 (Evaluate alternative solution): After develop the alternatives, the next step in the decision-making process is to analyze the problem in depth. This is necessary to classify the problem in order to know who must take the decision and who must be informed about the decision taken. Here, the following four factors should be kept in mind:  Futurity of the decision,  The scope of its impact,  Number of qualitative considerations involved, and  Uniqueness of the decision.

Management planning and decision making

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Acceptance of the decision by group members is always desirable and useful for its effective implementation. However a manager can use the following factors as his guideline to make a choice that is to make a decision:  Concentrate on differences  Identify your “must’’ & “should”  No compromise with “must”  Relate recourse requirement to resource available  Consider time as a great factor Management planning and decision making Page 2 .Step 4 (Make a choice): Final step in the decision-making process is to select an alternative that seems to be most rational for solving the problem. The alternative thus selected must be communicated to those who are likely to be affected by it.

Management planning and decision making Page 3 2. Policies: Policies also are plans in that they are general statements or understandings which guide or channel thinking and action in decision making. the financial operating budget is often called a “profit plan”. A primary programme may call for many derivative programmes. Establishing objectives: The second step in planning is to establish objectives for the entire enterprise and then for each subordinate work unit. may or may not be part of a procedure. Objects or Goals: Objects or goals are the ends toward which activity is aimed. rather than to thinking. procedures. Policies delimit an area within which a decision is to be made and assure that the decision will be consistent with a contributive to objective. policies. steps to be taken. are chosen from among alternatives. rules. They are usually the simplest type of plan. Strategies: While the term sill usually has a competitive implication. however. Setting realistic objectives depends on this awareness. . Every organization should have a mission or purpose.Question: List and explain various types of plans we find in a business organization. Rules are frequently confused with policies or procedures. They represent not only the end point of planning but also the end toward which organizing. Budgets: Budget as a plan is a statement of expected results expressed in numerical terms. They are truly guides to action. Answer: The nature of plans may be expressed as a hierarchy. however. and they detail the exact manner in which a certain activity must be accomplished. Being aware of opportunities: Although it precedes actual planning and is therefore not strictly a part of the planning process and awareness of opportunities in the external environment as well as within the organization is the real starting point for planning. It may be referred to as a “Numberized” programme. Programmes: Programmes are a complex of goals. managers increasingly use it to reflect broad areas of an enterprise’s operation. Rules: Rules are plans in that they are required actions which. Purpose or Missions: The mission or purpose identifies the basic purpose of function or tasks of an enterprise or agency or any part of it. A rule. As a matter of fact. one must study the feasibility of possible courses of action at each stage. staffing. as shown in Figure. Question: What are the steps involved in the planning process? Answer: The practical steps listed below and in practice. like other plans. This is to be done for the long term as well as for the short range. Thus one seldom finds that a programme of any importance in enterprise planning stands by itself. leading and controlling are aimed. 1. task assignments. resources to be employed and other elements necessary to carry out operating budgets. Procedure: Procedures are plans in that they establish a customary method of handling future activities.

Determining alternative: The fourth step in planning is to search for and examine alternative courses of action. There are almost invariably derivative plans required to support the basic plan. the fifth step is to evaluate them by weighing the various factors in the light of premises and goals. Evaluating alternative courses: Having sought out alternative courses and examined their strong and weak points. The overall budgets of an enterprise represent the sum total of income and expenses with resultant profit or surplus and budgets of major balance sheet items such as cash and capital expenditures. Numbering plans by budgeting: After decisions are made and plans are set. There is seldom a plan for which reasonable alternatives do not exist and quite often an alternative that is not obvious proves to be the best. the final step to give the meaning is to numberise them by converting them to budgets.3. Occasionally an analysis and evaluation of alternative courses will disclose that two or more are advisable and the manager may decide to follow several courses rather than the one best course. Formulating derivative plans: At the point where decision is made. Premises are assumptions about the environment in which the plan is to be carried out. 7. 8. Management planning and decision making Page 4 . applicable basic policies and existing company plans. circulate and obtain agreement to utilize critical planning premises such as forecasts. 4. 6. If done well budget becomes a means of adding together the various plans and also important standard against which planning progress can be measured. planning is seldom complete and a seventh step is indicated. Selecting a course: This is the point at which the plan is adopted the real point of decision making. Developing premises: The next logical step in planning is to establish. 5. especially those not immediately apparent.