DECISION MAKING

 Decision-Making- all managers and

worker/employees in organizations make
decisions or make choices that affect their jobs
and the organization they work for. This
lesson’s focus is on how they make decisions by
going through the eight steps of the decision-
making process suggested by Robbins and
Coulter (2009).
 TYPES OF DECISION MAKING
A decision is a choice among possible alternative actions.
Like planning, decision making is a challenge and requires
careful consideration for both types of decisions, namely:

 STRUCTED OR PROGRAMMED DECISION- a

decision that is repetitive and can be handled by using a
routine approach.
Such repetitive decision applies resolving structured
problems which are straightforward, familiar and easily
defined. For example a restaurant customer complains about
the dirty utensils the waiter has given him. This is not unusual
situation, and therefore standardized solutions to such a
problem may be readily available.
  UNSTRUCTED OR NONPROGRAMMED
DECISIONS- applied to the resolution of
problems that are new or unusual, and for which
information is incomplete.
Such non programmed decision are described to
be unique, nonrecurring and need custom-made
decisions.
For example, a hotel manager is asked to make
decision regarding to the building of a new hotel
branch in another city to meet demands of business
there. This is an unstructured problem and therefore
needs un structured or non programmed decisions to
resolve it.
 TYPES OF
DECISION MAKING CONDITIONS
 Certainty Conditions- ideal conditions in
deciding problems; these are the situations in
which a manager can make precise decisions
because the results of all alternatives are known.
For example, bank interest are made known to
clients so it is easier for business managers to
decide on the problem of where to deposit their
company’s funds . The bank which offers the highest
interest rate, therefore, is the obvious choice of the
manager when asked to make a decision.
 STEPS IN DECISION MAKING

1. Define Problem/Issue- the objective has been set, and

there is an obstacle toward to the realization of the
objective. As a result, before a problem does exist and
becomes an issue there must be an objective identify
which problem is threatening. That problem must be
identified and isolated. Care must be taken so as not to
confuse symptom of the problem from the actual
problem at stake.
For example, there can be smoke in the factory but what
is causing the smoke is the fire. Attacking the smoke is a
sheer waste of time because the fire will continue to produce
fresh smoke. The only way to put an end to the smoke is to
quench the fire relevant means or a combination of means.
2. Collect relevant data- this is where the
information gathered in the management function of
forecasting will be useful. The assumptions made
will be further subjected to analysis so as to
determine the relevance to the problem stake.
Company records also part of the data which have
to be processed.
3. Develop alternative solution- the solution can
never be one because if it so then there can be no
choice. The idea of choice suggest that at least there
must be two solutions to the existing problem. Out
of these solutions, there can be a choice.
4. Assess the con sequences- the manager
Should be determine the required resources needed
in selecting an option. He should find out if such
resources do exist and if they can be put to
alternative use that can bring better benefits. He
must ensure that the organization can handle the
option and that such option is capable of tackling
the problem effectively.
5. Select the Optimum Solution- the solutions
having been worked out and ranked in order of
preference, the next stage is to choose. And the
choice should be the most feasible one after taking
several factors into consideration the objective and
the problem at stake.
 RISK OR UNCERTAINLY CONDITIONS- are
more common condition in deciding problems.
Risk or uncertainty conditions compel the decision
maker to do estimates regarding the possible occurrence
of certain outcomes that may affect his or her chosen
solution to a problem. Historical data his or her own
experiences and other secondary information may be
used as bases for decisions to be made by the decision
maker under such risk conditions.
For example, a manager is asked to invest some of their
company funds in the money market offered by a
financial institution. Risk factors must be considered,
because of the certainty conditions involved, before
making a decision- whether to invest or not in the said
money market.
6. Implement Solution- while implementing, there
should be built-in motivational system that will
enable problem to be tackled satisfactorily. Job plan
should be developed spelling out the necessary
activities to be done, who is to do them, how they
are going to be done and at what time.
7. Measure Result- while implementing, there
must be control and feedback. To achieve this, there
should be regular reports on performance. The
reports should then be compared with the objective.
If there is a deviation, this means that there is no
effective solution yet to the problem. Such as
deviation should be quickly corrected.