Decision Making Condition and Decision Making Tree

Decision Making Condition
and Decision making tree
By
Surya kanta Acahrya
Susmita Mohapatra
Swabhiman Pradhan
JyotiPrakash Sahu
Priyadarshini Behera
Contents
1. Meaning and Definition
2. Characteristics of Decision Making
3. Types Of Decision
4. Decision Making Conditions
5. Decision Tree
6. Conclusion
Meaning And Definition of decision making
“Decision making is a process involving information,

choice of alternative actions, implementations and
evaluation that is directed to the achievement of
certain stated goals.”
Meaning- Decision-making means the selection of a

course of action from among two or more possible
alternatives in order to arrive at a best solution for a
given problem.
Characteristics of Decision Making
Characteristics of Decision Making
 1.Process of selecting course of action
Decision making is choosing among two or more
alternative courses of action. Thus, it is the process of
selection of one solution out of many available.
 2. Looks for Best possible path
Decision making involves evaluating all options
and choosing the best one for achieving the
organizational objective .
 3. Looks for Best possible path
Decision-making is a mental as well as intellectual
activity/process and requires knowledge, skills,
experience and maturity on the part of decision-maker.
It is essentially a human activity.
Characteristics of Decision Making (cont.…)
Characteristics of Decision Making (cont.…)
 4. Involves a level of commitment
It involves certain level of commitment.
Management is committed to every decision it takes.
 5. Based on reliable information/feedback
Good decisions are always based on reliable
information. The quality of decision-making at all
levels can be improved with the support of an
effective and efficient management information
system (MIS).
 6. Pervasive Process
Decision-making process is all pervasive. This
means managers working at all levels have to take
decisions on matters within their jurisdiction.
Types of Decisions
Types of Decisions
 Programmed and Non-programmed Decisions
The programmed decisions are basically of a routine type
for which systematic procedures have been devised so that
the problem may not be treated as a unique case each time it
crops up.
The non-programmed decisions are complex and deserve
a specific treatment. For example, if all the professors in a
department stop their teaching work the problem cannot be
solved by set procedural rules. It becomes a problem which
requires a thorough study of the causes of such a situation
and after analyzing all factors a solution can be found through
problem solving process.
 Major and minor Decision
Another classification of decisions is major and minor.
Decision pertaining to purchase of new factory premises is a
major decision. Major decisions are taken by top
management. Purchase of office stationery is a minor decision
which can be taken by office superintendent.
Types of Decisions(cont.…)
 Routine and Strategic Decision
Routine decisions are related to the general functioning
of the organization. They do not require much evaluation
and analysis and can be taken quickly. Ample powers are
delegated to lower ranks to take these decisions within the
broad policy structure of the organization.
Strategic decisions are important which affect
objectives, organizational goals and other important policy
matters. These decisions usually involve huge investments
or funds. These decisions are taken at the higher level of
management.
 Policy decisions
Policy decisions are taken by top management or
administration of an organization. They relate to major issues and
policies such as the nature of the financial structure, marketing
policies, outline of organization structure..
 Organizational and personal decisions
When an individual takes decision as an executive in
the official capacity, it is known as organizational
decision whereas if decision is taken by the executive in
the personal capacity (thereby affecting his personal
life), it is known as personal decision.
 Individual and group decisions

When the decision is taken by a single individual, it is
known as individual decision. Usually these decisions re taken
within the broad policy framework of the organization.
Group decisions are taken by group of individuals
constituted in the form of a standing committee. Generally
very important and pertinent matters are taken up. The main
aim in taking group decisions is the involvement of maximum
number of individuals in the process of decisionmaking.
Decision
Decisionmaking
makingconditions
conditions
Decision Making face three particular conditions they are; uncertainty,

certainty, and risk. These conditions determine the probability of an error
in decision making.
Decision
Decision
making under
certainty
making under
uncertainty
Decision
making
under risk
Decision
Decisionmaking
makingunder
undercertainty
certainty
Under conditions of certainty, the manager has enough

information to know the outcome of the decision before it
is made.
Knowledge of the alternative options---
Knowledge of the outcomes ---
For Example- Purchasing food at a food booth.

Decision
Decisionmaking
makingunder
underRisk
Risk
Under a state of risk, the decision maker has incomplete

information about outcome but has a good idea about
different alternatives.
Knowledge of the alternative options---
Knowledge of the outcomes ---X
For Example-Investing at stock market.

Decision
Decisionmaking
makingunder
underUncertainty
Uncertainty
Under a state of uncertainty, the decision maker has

incomplete information about outcome and as well as on
the different alternatives.
Knowledge of the alternative options---X
Knowledge of the outcomes ---X
For Example- Launching a new product

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Decision Making Condition

and Decision making tree

2. Characteristics of Decision Making

4. Decision Making Conditions

“Decision making is a process involving information,

Meaning- Decision-making means the selection of a

 Individual and group decisions

Decision Making face three particular conditions they are; uncertainty,

Under conditions of certainty, the manager has enough

For Example- Purchasing food at a food booth.

Under a state of risk, the decision maker has incomplete

For Example-Investing at stock market.

Under a state of uncertainty, the decision maker has

For Example- Launching a new product

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