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Decision Making Process

Definition
Types of decisions
Programmed Non-Programmed Strategic Tactical

Decision making process

Decision
A decision represents a judgment; a final

resolution of a conflict of needs, means or goals; and a commitment to action made in face of uncertainty, complexity and even irrationally.
In the final analysis, managers are paid for doing only one thing-making decisions. In fact the job of managing is the job of making decisions.

Decision making is a process of identifying a set of feasible alternatives, and from these selecting the best course of action.
James stoner defines DM The process of identifying & selecting a course of action to solve a specific problem.

Types Of Decision Making

Programmed Decisions Non Programmed Decisions Strategic Decisions


Tactical Decisions

Programmed Decisions

Routine and Repetitive in nature


Within the framework of organisational policies and rule.

Programmed decisions are comparatively easy to make as these relate to the problems which are solved by considering internal organisational factor.

Non Programmed Decisions

Relevant for solving unique/unusual problems


For such decisions, the situation is not well structured & the outcomes of various alternatives cannot be arranged in advance. They are novel & non-recurring so readymade solutions are not available. Such decisions are made by managers at higher levels in the organization.

Strategic Decisions

Strategic decisions is a major choice of actions concerning allocation of resources & contribution to the achievement of organisational objectives. Affects the whole or major part of the organisation The strategic decision has 3 elements: Course of action A desired result A commitment which directs some part of organization to undertake the course of action, makes the personnel involved responsible for attaining the objective & allocates resources to them, commitment element.

Tactical Decisions

Derived out of strategic decision Relates to day to day operations of the organisation & has to be taken frequently. E.g. purchase of raw materials, assigning duties to employees etc.. Tactical decision is mostly a programmed one. The out-come of tactical decision is of short-term nature E.g. purchase of raw materials in routine manner will affect production deptt for a short period because raw materials are purchased very frequently in the context of well set policies.

Decision Making Process

Decision Making Process


Defining the problem Generating Alternatives Evaluating Alternatives

Decision Making Process Choosing Alternatives

Follow-up

Implementation

"It is not enough to have a good mind. The main thing is to use it well."

References:
1. Principle & practices of management LM Prasad