DECISION MAKING PROCESS

Decision making is the cognitive process of selecting a course of

action from among multiple alternatives.
Cognitive process is
the mental process of knowing, including aspects such as awareness, perception,
reasoning, and judgment.
• Every decision-making process produces a final choice. It can be an action or
an opinion.
• It begins when we need to do something but we do not know what.
A decision-making is
a reasoning process which can be rational or irrational, and can be based on explicit
assumptions or tacit assumptions

TYPES OF PROBLEMS
STRUCTURED
Well-structured problems are constrained problems with convergent solutions that engage the
application of a limited number of rules and principles within well-defined parameters
UNSTRUCTURED
Problems possess multiple solutions, solution paths, fewer parameters which are less manipulate
able, and contain uncertainty about which concepts, rules, and principles are necessary for the
solution or how they are organized and which solution is best
SIMI STRUCTURED
a gray area lies between the structured and unstructured range. Here part of the decision can be
specified allowing for certain factors out of control

TYPE OF DECISION
STRUCTURED
Where problem is recurring and repetitive, the common factors can be identified in order to
identify a particular course of action. Due to which defined set of procedure can be devised for
their solution. Hence,
 • Procedures for obtaining the best solution are standardized
• Objectives are clearly defined
• Clearly specified inputs and outputs

UN-STRUCTURED DECISIONS
When problems are non-routine, critical and novel in nature, they require individual judgment,
evaluation and insight varying on case-to-case basis. There is no well understood or agreed upon
procedure for handling these problems.

SIMI-STRUCTURED
Decisions in the middle between structured and unstructured decisions, requiring some human
judgment and at the same time with some agreement on the solution method

DECISION-MAKING STEPS
STEP 1: Identify the solution
You realize that you need to make a decision. Try to clearly define the nature of the decision you
must make. This first step is very important
STEP 2: Gather relevant info
Collect some pertinent information before you make your decision: what information is needed,
the best sources of information, and how to get it.
STEP 3: Identify the alternatives
As you collect information, you will probably identify several possible paths of action, or
alternatives. You can also use your imagination and additional information to construct new
alternatives. In this step, you will list all possible and desirable alternatives

STEP 4: Weigh the evidence

Draw on your information and emotions to imagine what it would be like if you carried out each
of the alternatives to the end.
STEP 5: Choose among alternatives
Once you have weighed all the evidence, you are ready to select the alternative that seems to be
best one for you. You may even choose a combination of alternatives.
STEP 6: Take action
You’re now ready to take some positive action by beginning to implement the alternative you
chose in Step 5.
STEP 7: Review your decision & its consequences
In this final step, consider the results of your decision and evaluate whether or not it has resolved
the need you identified in Step 1. If the decision has not met the identified need, you may want to
repeat certain steps of the process to make a new decision. For example, you might want to gather
more detailed or somewhat different information or explore additional alternatives.

DECISION IN MANAGEMENT FUNCTION

Decision-making is not the only, but the basic function of management that contributes most to
the success or failure of the organization.
The manager is the one who makes decisions and decision-making is the essence of planning

4 TYPES OF DECISION- MAKING STYLES

1. Directive
The directive decision-making style uses quick, decisive thinking to come to a solution. A
directive decision-maker has a low tolerance for unclear or ambiguous ideas.
2. Analytical
Analytical decision-makers carefully analyze data to come up with a solution. They're careful
and adaptable thinkers
3. Conceptual
Those who make decisions with a conceptual style are big picture thinkers who are willing to
take risks.
4. Behavioral
A behavioral style of decision-making focuses on relationships more than the task. It evaluates
the feelings of others as part of their decision-making process.
 CASE-ANALYSIS APPROACH

Case Method of Analysis

The case method of analysis involves studying actual business situations—written as an in-depth
presentation of a company, its market, and its strategic decisions—in order to improve a
manager's or a student's problem-solving ability.