Topic of Presentation

STRATEGY
DECISION
MAKING
DECISION MAKING
 The decision maker
 The decision problem
 The environment in which the decision is to
be made.
 Alternative course of action.
 Final choice of alternative.
 Routine decisions are made repititively following
certain established rules, procedures and
policies. These are taken by middle or lower
level managers.
 For ex: purchase of raw material.

 Strategic decisions relate to policy matters and

so require a thorough fact finding and analysis of
the possible alternatives.

 For Example: change in product mix, expansion

of business, change in personnel policies etc
 Policy
decisions are of vital importance and
are taken by the top level management . For
ex : employee bonus.

 Operating decisions are taken by lower

managers in order to put into action the
policy decision. For ex : Calculation of
bonus.
 PROGRAMMED DECISION – A programmed
decision is one that is fairly structured or
recurs with some frequency.
 NON PROGRAMMED DECISIONS – Non-
programmed decisions are relatively
unstructured and may occur much less often
.They are made in response to situations that
are unique ,are poorly defined and largely
unstructured.
 Organisational decisions are those which a
manager takes in his official capacity.
 Personal decisions are related to the
manager as an individual.
A decision when its is taken by an individual
in an organisation is an individual decision.
 Group decisions are such decisions which are
taken by a group of an organisation say
BODs or a committee.
 Diagnosing
and defining
the problem Analysing
the
Putting the problem
decision
into action
Follow up
Collection
of data
Selecting
the best
alternative
Developing
Review of
alternatives
key factors
 Non- Quantitative
Quantitative base
Base Or
or Modern
Traditional Technique
Technique
OPINION

INTUITION

EXPERIENCE
 Intuition
is taking a decision on the basis of
your inner feeling having pre-cognitive
ability.

 Opinionis consideration for an opinion given

by a group for problem solving.

 Experienceis taking decision on the basis of

your past experiences in business situations.
OPERATIONAL
RESEARCH (OR)

DECISION TREE

Delphi Technique
 OPERATIONAL RESEARCH (OR)

 Operational Research Technique: OR is the

application of Scientific method, tools and
techniques to Operations of system with
Optimum solution to the problem. It forms
an Analytical, Objective and Quantitative
basis for arriving at a decision.It also consists
of four techniques …
 InvolvesMinimization and Maximization of a
Linear Function of some Primary Variable
subject to certain Restrictions known as
Constraints.

 LPis applicable in problem areas as

Production, Transportation, Warehouse
Location, Utilization of Production Units.
 Itis the technique of stimulating the
probable outcome before taking action.
 Example-Inventory control, development of a
new product line.
 Appliedto situations where the Rational
Opponent is involved so that resulting effects
are dependent on the specific strategies
selected by Decision Maker and Opponent.

 Whiledeciding the Business Strategy, an

attempt is made to Maximize Profit with
Minimum Loss for Self and do other way
round for Opponent.
 Group Decision Technique and used in Long or Medium Range
Forecasting. Steps :

 Panel of Experts in drawn from within and outside Organization.

 Each Expert makes anonymous forecasts.

 Each Expert is provided Composite feedback about various

Experts’ answers.

 Each Expert is free to change his opinion on basis of feed back.

 Process is reached till Consensus is reached.
A Graphic method by which a decision maker
can readily visualize alternatives together
with Risks, possible Outcomes and
Information Needs involved in each Chance.

 Some decisions involve a series of steps, with

each step depending upon the preceding step
and so on. Often Uncertainty surrounds each
step and so we face lot of Uncertainty in
totality.