MANAGEMENT THEORY AND PRACTICE
Q1. Explain Decision Making Process and various types of Decision with examples?
Ans. Decision making is six step process.
1) IDENTIFYING AND DIAGNOSING THE PROBLEM.
The first stage of decision making is identifying and diagnosing a problem or opportunity. Once a problem has been recognized, the decision maker begins to look for the causes of the problem. This requires gathering information, exploring possible causes, eliminating as many causes as possible, and then focusing on most probable causes. For eg, a manager who observes a high level of employee turn over first gathers information to diagnose the problem and then attempts to understand why the turnover is occurring. If the real cause of turn over is work and family conflicts due to inflexible work schedules and the manager assumes that it is caused by inadequate compensation and raised employee pay as a solution, the manager may not have solve the problem. 2) GENERATING ALTERNATING SOLUTION.
The second step is to generate possible solution to the problem based on the previous causes. Some problems can be solved using programmed solution, when there are ready made answers. Novel situation requires non programmed decisions because there are no policies or procedures available to provide directions. Many companies use groups to generate solution for non programmed decisions because they provide a greater diversely of opinions and more innovative solutions than do people working individually. 3) EVALUATING ALTERNATIVES
The third stage requires the decision maker to examine the solutions using a set of decision criteria. The decision criteria should be related to the performance goals of the organization and its subunits and can include cost, profits, timeliness, whether the decision will work, and fairness. For eg. A technical engineering problem can be solved by gathering data and mathematical techniques. Decision acceptance is based on people’s feelings. Decision acceptance happens when people affected by a decision agree with what is to be done. 4) CHOOSING THE BEST ALTERNATIVE
The next stage of decision making is the selection of the best alternative by either optimizing or satisfying. Optimizing involves selecting the best alternative from among multiple criteria. For example, assume the decision criteria used to select an individual to fill a vacancy consists of technical job knowledge, previous work experience, and leadership skills. Further assume that it will take six months to be able to generate a large enough applicant pool to be able to find the best person to fill the job. The optimizing solution is available when the benefits of reaching the solution outweigh the cost.
5) IMPLEMENTING THE DECISION
Putting the alternative solution into practice and making sure it works is the next step of decision-making. Implementation requires the decision maker to put the solution into practice. Decision making without implementation is simply an intellectual exercise. For example, a managers decision to hire a minority group employee to fill a job vacancy under a corporate diversity plant may not be effectively implemented if other employees resent and avoid working with the employee.
6) EVALUATING THE DECISION
The final stage is the decision-making process is to evaluate the results. Decision makers gather information and try to learn if the implemented decision achieved its goals. The availability of accurate and timely information and feedback permits the decision maker to make a thorough evaluation and to determine weather modifications are needed. An executive collecting productivity data on a new manufacturing plant would be foolish to immediately judge its effectiveness without giving plant management time to eliminate the production bottlenecks that are typical in new manufacturing plants. It would be better to suspend judgment until plant personnel...
Please join StudyMode to read the full document