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2 . as does the ability to admit one was wrong and change one¶s mind. managers will respond by µplaying it safe¶ to minimise the risk of criticism which diminishes the business¶ effectiveness in responding to market changes.making is a conscious & human process. which concludes with a choice of one behavioral activity from among one or more alternatives with the intention of moving toward some desired state of affairs´ Shell et al Managers can be trained to make better decisions. various techniques which help to make information clearer and better analysed.´ Lopez ³Decision. DEFINITION ³A decision represents a judgement. They also need a supportive environment where they won¶t be unfairly criticised for making wrong decisions (as we all do sometimes) and will receive proper support from their colleague and superiors. A climate of criticism and fear stifles risk-taking and creativity. Consultation ie seeking the views and expertise of other people also helps. The question then is µhow is a good decision made? One part of the answer is good information. and a commitment to action made in face uncertainty.Introduction Decision-making is a crucial part of good business. and experience in interpreting information. There are also aids to decision-making. involving both individual & social phenomenon based upon factual & value premises. a final resolution of a conflict of needs. complexity and even irrationally. means or goals. It may also mean managers spend too much time trying to pass the blame around rather than getting on with running the business. and to add numerical and objective precision to decision-making (where appropriate) to reduce the amount of subjectivity.

Three aspects of human behaviors are involved in decision-making ‡ Cognition. All these factors go into decision making that is choosing the most desired alternative out of several. mood and temperament. feeling. The Board of Directors may make the grand strategic decisions about investment and direction of future growth.Programmed Decisions 2. and enlightened management.Non ± Programmed Decisions 3. ‡ Conation. From this point of view decision fall into four categories1.Tactical Decisions 5. responses to customers and improvements to business practice. good training. Types of Business Decisions The every organization is involved in a complicated pattern of decision ranging from setting of organizational objectives to specific decision about day-to-day operations.the action of the mind implied by such words as willing. ‡ Affection.Decision-making increasingly happens at all levels of a business. Some of these decisions have long-term effect while others have only short-term effect. and managers may make the more tactical decisions about how their own department may contribute most effectively to the overall business objectives.activities of the mind associated with knowledge.the aspect of mind associated with emotion. But quite ordinary employees are increasingly expected to make decisions about the conduct of their own tasks.Strategic Decisions 4.Operational Decisions 3 . This needs careful recruitment and selection. desire & aversion.

As such. Programmed Decisions These are standard decisions which always follow the same routine. Each decision is not quite the same as any previous decision.  Easy to make as these relate to the problems which are solved by considering internal organisational factors. 3.  These policies and rules are established well in advance to solve recurring problems in the organisation. Therefore it can be defined as follows- 4 . These are non-standard and non-routine. They could even be written as computer program  Programmed Decisions are routine and repetitive and are made within the framework of organisational policies and rules.  They are non recurring in nature ie. they can be written down into a series of fixed steps which anyone can follow.  Suitable at the level where the environment affecting decision making is static and well structured 2. the situation is not well structured and the outcomes of various alternatives cannot be arranged in advance.programmed decisions are relevant for solving unique/unusual problems in which various alternatives cannot be decided in advance.1. Non-Programmed Decisions. Strategic Decisions.  For such decisions .have long consequences and made at higher levels of management. These affect the long-term direction of the business eg whether to take over Company A or Company B strategic decision concept is based on strategy which is a major action plan in an organization.  Non.  These decisions are of high importance .  Most of the factors affecting decisions lie outside the organisation. Readymade solutions are not available.

These are medium-term decisions about how to implement strategy eg what kind of marketing to have. 5 . 4.  A strategic decision may involve major departure from earlier ones concerning some organizational practices. procedures.Purchase of raw material.³strategic decision is a major choice of actions concerning allocation of resources & contribution to the achievement of organizational objectives. for exp.´ Characteristics of Strategic Decision :  It affects whole or major part of the organization. Characteristics: It is related to day-to-day operation of the organization and has to be taken very frequently.  It contributes directly to the achievement of organizational objectives. rules. while other decision are derived from these. change in personnel etc. Change in product mix. assigning duties to employees etc.  The authority for making tactical decisions can be delegated to lower level managers.  These are mostly programmed decision.  The outcome of tactical decision is of short-term nature & affects a narrow part of organization. or how many extra staff to recruit. It relates to day-to-day working of the organization & is made in the context of well set policies & procedures. expansion of business. Eg. The decision is programmed through the prescription of policies. It is derived out of strategic decision.etc. Tactical Decisions.

5. Figure 1: Levels of Decision-Making Figure 2: The Decision-Making Process Phases of Decision Making Managers and leaders have to take many decisions. So what 7 steps you can take to be a more effective decision maker? y SPECIFIC OBECTIVES y IDENTIFICATION OF PROBLEM y y y y y SEARCH FOR ALTERNATIVES EVALUATION OF ALTERNATIVES CHOICE OF BEST ALTERNATIVE ACTION RESULTS 6 . Some of these will be routine and easy while others will be more challenging. Operational Decisions. These are short-term decisions (also called administrative decisions) about how to implement the tactics eg which firm to use to make deliveries.

If there is no way of solving problem . A problem can be identified much clearly. but it also avoids bottlenecks in operation if as alternatives are available if a particular decision goes wrong. A problem is a felt need.The energy and time of managers are limited. Two Basis:1)Constraints on Alternatives 7 . Specific Objective The starting point in any analysis of decision making involves the determination of whether a decision need to be made. The objectives. will provide clue in identifying the problem and its possible solution. a question thrown forward for solution. if set precisely and specifically on the subject matter of decision.1. no question of decision arises. Setting of specific objective itself is an earlier decision. if managers go through diagnosis and analysis of the problem.Problem Identification It is the real beginning of Decision Making.Various alternatives not only serves the purpose of most satisfactory one.Search for Alternatives A decision maker seeks possible solutions of a problem with keeping in mind the situation in which the problem exists. 3.Most of them prefer to work on plans that have good prospects of being carried out.Evaluation Of Alternatives All alternatives available cannot be taken for detailed evaluation because of the obvious limitations of the managers. 4. 2.

Choice of best Alternative The evaluation of various Alternatives presents a clear picture as how each one of them contributes to the objective under question. converting the decision into something operationally effective. Constraints on Decision-Making Internal Constraints These are constraints that come from within the business itself. These results must correspond with objectives .Availability of finance.Rank alternatives and choose the best one that fits with the organisational objectives. 7. Basis: Experience  Experimentation  Research and analysis 6.Existing Business Policy. .must ensure that the objective have been achieved by the chosen alternative.2)Grouping of Alternatives of similar Nature 5.Results When the decision put into action. Certain decisions will be rejected because they cost too much . it brings certain results.So.Action The actual process of Decision making ends with the choice of alternative but it is continuous process . It is not always practical to re-write business policy to accommodate one decision 8 .

Good decisionmaking comes from:1. Rivalries and vested interests also come into it. Emotional responses come before rational responses. Good information in the first place.. A decision cannot be taken if it assumes higher skills than employees actually have. People simply take different views on the same facts. . 5. People are people.Competitors¶ behaviour. Human factors. and it is very difficult to get people to make rational decisions about things they feel very strongly about. Training of managers in decision-making skills. 4. External Constraints These come from the business environment outside the business. or if the decision is so unpopular no-one will work properly on it. and their likely response to decisions your business makes . Risk and attitudes to risk.Lack of technology . Business Thinkers -John Pierpoint Morgan & Good Management Self-Assessment Interdependence 9 . Management skills in analysing information and handling its shortcomings. Experience and natural ability in decision-making. 6.People¶s abilities and feelings. and people also simply make mistakes. 3.National & EU legislation .Economic climate Quality of Decision-Making Some managers and businesses make better decisions than others. See Developing Managers 2.

The effects of any decision will depend critically on the reactions of other groups in the market. F. REFRENCES 1. their suppliers and their customers. These have to be. taken into account before decisions are made.Businesses are highly interdependent on each other.Management ( Sixth Edition ) By James A. Decisions are not taken in isolation. as far as possible. Edward 2.Principles and Practice of Management By L M Prasad 10 . Stoner. R.