CHAPTER 2:

DECISION MAKING
THE FUNDAMENTAL PROCESS OF MANAGEMENT
EFFECTIVE DECISION

DECISION IS A JUDGEMENT. IT IS AT BEST A CHOICE BETWEEN ALMOST RIGHT

AND PROBABLY WRONG.
EFFECTIVE MANAGERS

EFFECTIVE MANAGER ARE EXPECTED TO MAKE EFFECTIVE DECISION WITH

SIGNIFICANT IMPACT ON THE ENTIRE ORGANIZATION, ITS PERFORMANCE AND
RESULTS, DEFINES THE MANAGER.
DECISION PROCESS

MOST SUCCESSFUL DECISION MAKING FOLLOWS A PROCESS THAT CONSIST OF

THE FOLLOWING STEPS:
1. IDENTIFY THE PROBLEM
2. SPECIFY OBJECTIVES AND DECISION CRITERIA
3. DEVELOP ALTERNATIVES
4. ANALYZE AND COMPARE ALTERNATIVE
5. SELECT THE BEST ALTERNATIVE
6. IMPLEMENT THE CHOSEN ALTERNATIVE
7. MONITOR RESULTS TO ENSURE THAT THE DESIRED RESULTS ARE ACHIVED
DECISION CRITERIA

1. CAPITAL
2. TIME
3. PROFITS
4. MAINTENANCE
5. RETURN OF INVESTMENT
6. INCREASE IN COST
7. RISKS
 REASONS WHY MANAGER INSIST ON DISAGREEMENT BEFORE
DECISION MAKING

1. IT IS ONLY THE SAFEGUARD AGAINST THE DECISION MAKERS BECOMING THE

HOSTAGE OF THE ORGANIZATION.
2. DISAGREEMENT ALONE CAN PROVIDE ALTERNATIVES TO A DECISION. A
DECISION W/O AN ALTRNATIVE IS LIKE A DEPERATE GAMBLERS THROW, NO
MATTER HOW CAREFULLY THOUGHT THROUGH IT MIGHT BE, THERE IS ALWAYS A
POSSIBILITY THAT THE DECISION WILL PROVE WRONG EITHER BECAUSE IT WAS
WRONG AT THE START OR BECAUSE OF A CHANGE IN CIRCUMSTANCES THAT
MAKES IT WRONG.
3. DISAGREEMENT IS NEEDED TO STIMULATE THE IMAGINATION. BUT
IMAGINATION ON HIGHER LEVEL IS NOT IN ABUNDANT SUPPLY.
REASONS FOR POOR DECISIONS

SOMETIMES THE BEST EFFORT OF THE MANAGER, A DECISION TURNS OUT TO BE

POOR DUE TO UNFORESEEABLE CIRCUMSTANCES. ALTHOUGH SUCH
OCCURRENCES ARE NOT VERY COMMON, BUT MORE OFTEN, FAILURE CAN BE
TRACED ON SOME COMBINATION OF THE FF. REASON:
1. ERRORS MADE IN THE DECISION PROCESS
2. BOUNDED RATIONALITY-A TERN W/C REFERS TO THE LIMIT AS CONTROL ON
THE MAKING DECISION BECAUSE OF COST, HUMAN ABILITIES, TIME,
TECHNOLOGY AND AVAILABILTY OF INFORMATION.
3.SUB-OPTIMIZATION- IS THE RESULT FROM EACH DIFFERENTDEPARTMENTS
ATTEMPT TO REACHING A SOLUTION THAT IS OPTIMUM FOR THEIR DEPARTMENT.
ELEMENTS OF DECISION PROCESS
FIVE ELEMENTS IN THE PROCESS OF DECISION MAKING:
1. SEE IF THE PROBLEM WAS GENERIC AND COULD ONLY BE SOLVED THROUGH A
DECISION ESTABLISHED BY A RULE OR PRINCIPLE
2. DEFINE THE SPECIFICATION WHICH THEANSWER TO THE PROBLEM HAD TO
SATISFY, THAT IS, OF BOUNDERY CONDITIONS.
3. THE THINKING THROUGH WHAT IS RIGHT, THAT IS, THE SOLUTION WHICH
SATISFY THE SPECIFICATIONS BEFORE ATTENTION IS GIVEN TO THE
COMPROMISES, ADAPTATION, AND CONCESSIONS NEEDED TO MAKE THE
DECISION ACCEPTABLE.
4. THE BUILDING INTO THE DECISION OF THE ACTION TO CARRY IT OUT.
5. THE FEEDBACK, WHICH TESTS THE VALIDITY AND EFFECTIVENESS OF THE
DECISION AGAINST THE ACTUAL COURSE OF EVENTS.
BUDGETING THE TIME

EFFECTIVE MANAGER KNOW THAT TIME IS THE LIMITING FACTOR. HE DOES NOT
START W/ HIS WORK. HE START W/ HIS TIME. AND HE DOES NOT START OUT W/
PLANNING.
TIME IS A UNIQUE RESOURCE. ITS SUPPLY IS TOTALLY INELASTIC. NO MATTER
HOW HIGH THE DEMAND, THE SUPPLY WILL NOT GO UP. THERE IS NO PRICE
FOR IT. MOREOVER, TIME IS TOTALLY PERISHABLE AND CANNOT BE STORED.
YESTERDAYS TIME IS GONE FOREVER AND WILL NEVER COME BACK. TIME IS
THEREFORE EXCEEEDDING SHORT SUPPLY.
BUDGETING THE TIME

MEETINGS. ANOTHER COMMON TIME WASTER IS MAL-ORGANIZATION. ITS

SYMPTOM IS AN EXCESS OF MEETINGS. MEETINGS ARE DEFINED AS CONCESSION
TO DEFFICIENT ORGANIZATION FOR ONE EITHER MEETS OR ONE WORKS.
FIRST THING FIRST

THE ONE SECRET OF EFFECTIVENESS IS CONCENTRATION. EFFECTIVE

MANAGERS DO FIRST THING FIRST AND THEY DO ONE THING AT A TIME.
EMPLOYEE DISCIPLINE

DISCIPLINE IS A MEANS THAT MANAGEMENT USES TO BRING EMPLOYEE

BEHAVIOR UNDERCONTROL.
DISCIPLINE IS AN EMPLOYERS ACTION AGAINST AN EMPLOYEE FOR INFRACTION
OF COMPANY POLICIES OR RULES.
PRINCIPLES OF DISCIPLINE
1. DISCIPLINARY ACTION SHOULD NOT BE TAKEN UNLESS THERE IS OBVIOUS
NECESSITY FOR IT.
2. THE REASON FOR DISCIPLINARY ACTION SHOULD BE MADE CLEAR.
3. GIVE THE MAN A CHANCE TO PRESENT HIS SIDE OF THE STORY, AND DO NOT
ARGUE.
4. THERE SHOULD BE NO FAVORITISM OR DISCRIMINATION IN ANY DISCIPLINARY
ACTION.
5. REPRIMAND SHOULD BE GIVEN AS SOON AS POSSIBLE AFTER THE
OCCURRENCE OF THE ACT. RIGHT TIMING IS IMPORTANT, BUT FIRST HAVE ALL
THE FACTS.
6. FORGIVE AND FORGET. WHEN DISCIPLINARY ACTION HAS BEEN GIVEN , THE
SUPERVISOR SHOULD RESUME A NORMAL ATTITUDE TOWARD THE OFFENDING
EMPLOYEE.