Decision Making
Decision Making
Decision Making
Decision Criteria
A large number of decisions have to be made in organization every day, but they are all very
different in nature. Decisions will vary with respect to the following factors:
Types of decisions
Some problems are straightforward. The decision maker’s goal is clear, the problem is
familiar and information about the problem is easily defined and complete. Example might
include when a customer returns a purchase to a store, such situation is called structured
problem because they are straight forward, familiar, and easily defined.
A rule is an explicit statement that tells a manager what can or cannot be done. Rules are
frequently used because they’re simple to follow and ensure consistency. E.g. rules about
lateness and absenteeism permit supervisors to make disciplinary decisions rapidly and
fairly.
A policy establishes general parameters for the decision maker rather than specifically
stating what should or should not be done. Policies typically contain an ambiguous term
that leaves interpretation up to the decision maker. E.g. customer always comes first and
should always be satisfied.
Unstructured problems are problems that are new or unusual and for which information is
ambiguous or incomplete. When problems are unstructured, managers must rely on non-
programmed decision making in order to develop unique solutions.
Non-programmed decisions are unique and nonrecurring and involve custom made
solutions. Lower level managers mostly rely on programmed decisions because they
confront familiar and repetitive problems. As managers move up the organizational
hierarchy, the problems they confront become more unstructured. Because lower level
managers handle the routine decisions and let upper level managers deal with the unusual
or difficult decisions. Also, upper level managers delegate routine decisions to their
subordinates so they can deal with more difficult issues.
Evaluating decision
effectiveness
1. Sometimes managers choose the alternative which requires the minimum amount of
time, effort and money. They look at problems superficially and implement minor
changes to existing policies. This may be the result of some or all of these factors:
incompetent subordinates
lack of adequate support staff and physical resources
lack of training or ability to do the job
lack of direction from top management
poorly defined job specifications
lack of feedback
2. Barrier arises when panic sets in because of the pressures of both the problem and lack
of time. The stress may make the manager unable to appraise the problem objectively.
1. Managers can become more effective at decision making if they acquire relevant
information.
2. Managers need to set priorities so that they can concentrate their efforts on the
important tasks. Time management and the setting of priorities are two important skills
that managers should acquire.
3. Managers need to proceed methodically and carefully, taking one step at a time. Time
and effort must be taken to study the problem carefully and the manager must keep in
mind the mistakes that others have made so as to avoid.
No two groups will ever function in the same way while involved in the process of decision
making. Some are proactive groups while there are other groups, which need a driving force
or a facilitator to facilitate the process. There are several methods of group decision-making.
Here are some of the common methods employed in the process of decision-making:
•Authoritarian Style
The authoritarian style is like a dictatorship, in which the decision ultimately rests in the
hands of one person. This style of decision-making is applicable in the presence of a
powerful person who dictates the entire process of decision-making and has the final
authority on the outcome. This style, although in use at various places, tends to have more
disadvantages than advantages because the people whose opinions are disregarded might
have negative feelings about the entire process. A variation of this method is the minority
control method wherein the group discusses the issues but the power of decision-making
rests not in the hands of one but a small group of people within the group.
•Brainstorming
This group decision-making method is best when the decision-making has to be started from
scratch, which means creating the various options and then weighing them. This is an
excellent method for group decisions, which is very popular owing to the complete creative
freedom it offers to all the participants. There can be a facilitator to facilitate the entire
discussion just to ensure that the people don’t digress. The facilitator can merely help to
start off the conversation, provide subtle hints and nudges when the participants get stuck
and thus help to make effective and creative group decisions. The positive aspect of this
method is that it values the opinion of every individual member and the final decision is
reached by consensus.
This is a group decision-making process, which is convenient to use when the group has
certain set of defined options before it and needs to pick out the optimum solution. A voting
system allows every participant to cast his/her vote for the option that he/she thinks is the
best. The option that gathers the maximum number of votes is selected. This method
however does not value the individual opinion of each and every participant in the group. A
variation of this method is the majority method wherein a majority of people within the
group has the power to pass the final decision.
Like any other process, the process of taking group decisions has its own sets of advantages
and disadvantages. Here are the advantages and disadvantages of group decisions:
1. Group decisions help to combine individual strengths of the group members and
hence has a set of varied skill sets applied in the decision making process.
2. Individual opinions can be biased or affected with pre-conceives notions are
restricted perspectives, group decision help to get a broader perspective owing
to differences of perception between individual in the group.
3. A group decision always means enhanced collective understanding of the course
of action to be taken after the decision is taken.
4. A group decision gains greater group commitment since everyone has his/her
share in the decision making.
5. Group decisions imbibe a strong sense of team spirit amongst the group
members and help the group to think together in terms of success as well as
failure.
1. One of the major disadvantages of group decision making is that it is more time
consuming than the process of individual decision making.
2. Group decisions take longer to be finalized since there are many opinions to be
considered and valued.
3. In case of authoritarian or minority group decision making, the people whose
opinions are not considered tend to be left out from the decision making process
and hence the team spirit ceases to grow.
4. The responsibility and accountability of the decisions are not equally shared in some
cases which lead to a split in the group and hence hamper the overall efficiency of
the group.
5. While involved in a group decision making process it is always better to study the
advantages and disadvantages of group decisions and hence formulate a group-
decision making process that suits your group and gives you the optimum results.
Tutorial questions: