UNIT 5

Decision Making

1
• Decision making can be regarded as the
mental processes resulting in the selection of
a course of action among several alternatives.
Every decision making process produces a final
choice. The output can be an action or an
opinion of choice.
2
 Definition
• Decision :

A decision represents a course of behaviour chosen from a

number of possible alternatives.”
• Decision Making:
George Terry says, “Decision-making is the selection based on
some criteria from two or more possible alternatives.”

3
 Characteristics of Decision Making

• 1. Decision-making is based on rational thinking.

• 2. It is a process of selecting the best from among
alternatives available.
• 3. It involves the evaluation of various alternatives
available.
• 4. Decision-making is the end product because it is
preceded by discussions and deliberations.
• 5. Decision-making is aimed to achieve organizational
goals.
• 6. It also involves certain commitment
 Techniques or Basis for Decision-Making:

• Intuition
• Facts
• Experience
• Considered Opinions
• Operations Research
• Linear Programming
1.Organisational and Personal Decisions

• Organisational decisions are those which

managers undertake under certain conditions
relating to organisation. Sometimes taken
independently and sometimes delegated to
other colleagues.
• Personal decisions are to be taken by the
managers on their own. Others need not to be
consulted.
2. Tactical(Routine) & Strategic(Ba
sic)
Decisions Tactical (Routine) Decisions
• Concerned with routine & repetitive problems
• neither require collection of new data nor conferring with the
people. Thus can be taken without much deliberation.
• Has short term implications
• May be complicated but are always one dimensional.
• More experience & judgement is needed.
Strategic(Basic) Decisions
• Require thorough fact finding analysis of the possible alternatives.
• Finding the correct problem in such decisions assume more
importance.
• Has long term implications
 3. Programmed & Non-Programmed
Decisions
Professor Herbert Simon has given this
classification. He has utilised computer
terminology in classifying decisions.
Programmed decision may also be called as
Routine Decision and Non programmed as
Strategic Decisions
 4. Policy & Operative Decisions
• Policy decisions determine the the basic
policies of the organisations & are taken at top
level management. These are important in
nature & have long term impact.
• Operative decisions on other hand, are less
important & related with day-today operations
of the business. Middle and lower
management take these decisions
 5. Individual & Group Decisions
• It is based on the number of persons involved in
decision-making.
• Generally individual decision are less important &
programmed one.
• Group decisions are taken by a group of persons.
These are generally important decisions & relate to
policy matters. The decisions are taken after a
thorough discussion among persons who are
assigned this work.
DECISION MAKING PROCESS

14
• “Culture is the sum total of integrated learned
behaviour patterns which are characteristics
of the members of a society and which are
therefore not the result of biological
inheritance.”
 Characteristics of Culture:

• Culture is a Pattern of Learned Behaviour

• Culture is the Products of Behaviour:
• Culture includes Attitudes, Values Knowledge
• Culture is shared by the Members of Society:
• Culture is Pervasive:
• Culture is a way of Life:
• Culture is a human Product:
• Culture is transmitted among members of Society:
• Culture is Continually Changing:
• Culture is an integrated system:
 Classifications of culture:
• Famous Sociologist W.F. Ogburndivide culture into two types such as
material and non-material culture.
• Material Culture:
• Material culture consists of products of human activity which is concrete,
tangible and observable. Material culture is invented for human
convenience. They contribute to the progress of society. It changes faster.

• Non-material Culture:
• Non-material culture consists of intangible and abstract things like
customs, values, good will habits, beliefs, language etc. Non-material
culture is something internal and they do not have physical existence.
Non-material culture changes very slowly. It is created taking the
psychological basis of man and reflects the inward nature of man.
What is organizational culture?
• Organizational culture is the set of values,
beliefs, attitudes, systems, and rules that
outline and influence employee behavior
within an organization.
• The culture reflects how employees,
customers, vendors, and stakeholders
experience the organization and its brand.
 What is the importance of culture to your company?

• Improve recruitment efforts – The workers consider

a company’s culture before applying
• Improve employee retention – culture is one of the
main reasons that employees stay in their job
• Improve brand identity –The employees wanting to
change their job due to poor company culture
• Improve engagement – companies with a positive
culture have higher employee engagement rate
How do you improve organizational culture?

• Connect employee work to a purpose

• Create positive employee experiences
• Be transparent and authentic
• Schedule regular and meaningful 1:1s
• Encourage frequent employee recognition
Hofstede’s Cultural Dimensions
Theory
• Psychologist Dr. Geert Hofstede published his
cultural dimensions model at the end of the
1970s, based on a decade of research.

• Hofstede studied people who worked for IBM in

more than 50 countries.
• Initially, he identified four dimensions that
could distinguish one culture from another.
Later, he added fifth and sixth dimensions, in
cooperation with Drs Michael H. Bond and
Michael Minkov.
 1. Power Distance Index (PDI)
• This refers to the degree of inequality that exists –
and is accepted – between people with and
without power.
• A high PDI score indicates that a society accepts an
unequal, hierarchical distribution of power, and
that people understand "their place" in the system.
• A low PDI score means that power is shared and is
widely dispersed, and that society members do not
accept situations where power is distributed
unequally.
2. Individualism Versus Collectivism (IDV)

• This index explores the “degree to which

people in a society are integrated into groups.”
Individualistic societies have loose ties that
often only relate an individual to his/her
immediate family.
• In a collectivist society, however, people are
supposed to be loyal to the group to which
they belong
 3. Masculinity Versus Femininity (MAS)
• Masculinity is defined as “a preference in society for
achievement, heroism, assertiveness, and material rewards
for success.” Its counterpart represents “a preference for
cooperation, modesty, caring for the weak and quality of
life.”
• High MAS
• Strong egos – feelings of pride and importance are
attributed to status.
• Money and achievement are important.
• Low MAS
• Relationship oriented/consensual.
• More focus on quality of life.
 4. Uncertainty Avoidance Index (UAI)

• In societies that score highly for Uncertainty

Avoidance, people attempt to make life as
predictable and controllable as possible.
• A low uncertainty avoidance index indicates a
high tolerance for uncertainty and ambiguity.
The unknown is more openly accepted.
 5. Long- Versus Short-Term Orientation

• The long-term orientation vs. short-term orientation

dimension considers the extent to which society
views its time horizon.
• Societies that emphasize long-term orientation
prioritize future outcomes, postponing immediate
success for achievements over the long term.
• Short-term orientation shows focus on the near
future, involve delivering short-term success, and
place a stronger emphasis on the present than the
future. Short-term orientation emphasizes quick
results and respect for tradition.
 6. Indulgence Versus Restraint (IVR)
• This considers the extent and tendency for a
society to fulfill its desires. In other words, this
dimension revolves around how societies can
control their impulses and desires.
• Indulgence indicates that society allows relatively
free gratification related to enjoying life and
having fun.
• Restraint indicates that society suppresses
gratification of needs and regulates it through
social norms.
 Management Challenges

• 1. Change in Technology.
• 2. Change in Sociological Forces.
• 3. Change in Ecology.
• 4. Change in Globalisation of Managemen
• 5. Change in Government and Business Relations.
• 6. Change in the Extent and Nature of Complexity of
Decisions.
• 7. Obsolescence of present Managerial Experience.
• 8. Social Responsibilities and Ethical Values.
Thank You