Decision making is a very important thing for every organization, they need some management thing during work or run any organization, there are some advantages and disadvantages which they face during the run organization. decision is one of the major things which we need to take in the right time to make the organization better. we are going to know some key points about that.
A decision is usually required to solve a problem. Though the decision problem are of diverse nature, the following steps are considered to arrive at proper decisions.
• Identification of the problem.
• Selection of alternate solution
• Evaluation of the impact of each alternative on the organizational objects
• Application of best course of action.
The problem of managerial decisions are usually more complex as compared to decision involved in engineering and other technical application. This is because managerial decisions affect many more people inside and outside the organization and these usually these are made in dynamic and uncertain environments. For example, the problem may be an inability to increase market share for a product. The solution may be to sell more in the market by introducing promotion strategies. In the present-day scenario, this strategy may work. But the promotion strategy may not work because of market saturation or because of a more aggressive strategy by some competitors. In that case, the strategy has to be changed. Even it may be required to redefine the problem itself. The problem may be viewed as developing a strategy to increase profit reducing production cost. A may be found out. With the passage of time. A competitor may out into the market share of the company. company may think of reducing the price of the product. Management will have to find the optional price of the product to maintain or increase share without affecting the profitability. Thus, the optional strategy or the problem itself may change with time and the prevailing situation.
Some of the characteristics of managerial problems are given below.
• The problem is often ill-defined and unstructured.
• Managerial problem are usually much wider in scope as compared to technical problems. The decision affect many people who have their own objectives and interests and view the problem from a different perspective. The conflict of interests of individuals or groups needs to be considered while taking the managerial decision.
• The collection of information for arriving at the decision is also difficult as it is difficult to identify information that is relevant to the problem. The problem itself is dynamic and therefore, changes with time.
• The alternate decision are difficult to identify and even if this can be identified, the consequences of each alternative can not be evaluated easily as most often they change with time. In fact, there is very rarely the best solution to a management problem. Most often they are based upon compromises.
• Even after a decision is made cooperation of all concerns is needed for the successful implementation of the decision.
Some of the steps involved in systematic managerial decision making are given hereunder.
• Identification of the prime cause of the problem(for example, if the sales is low, it could be because of high production cost and high market price, untrained sales forces, lack of customer awareness or because of decreasing demand for the product itself).
• Finalization of the decision (which is to be taken by an individual or a group. In the later case identify the group of managers to be associated with the process of decision making).
• Definition of an alternate solution to the problem ( the alternate solution may be based on facts and figures to substantiate them or individual opinions. All opinions, if possible, maybe tested by evidence.
• Collection of information for evaluating the alternatives.
• Selection of a set of alternative ( they seem to attractive. This is because most often there is no unique best solution to the problem. The decision arrived at will be implemented with the cooperation of a number of persons the option may be modified for the general acceptance of those will get it implemented. This may require some compromises. The modified solutions may be evaluated to identify one that needs the least compromise with the organizational objective).
• The procedure of implementing a decision must be decided(the decision is usually as good as it is implemented. It will properly be implemented if all concern are committed to it. The solution itself may be reviewed to get the total commitment of all individuals who will implemented the decision. The decision may not be popular. But it must have the commitment from the management )
Model of decision making
There are large number of mathematical techniques for selecting the optimal strategy form a number of alternate available options. Some of them are linear and non-linear Programming models. Queuing Models. Inventory Models, Decision Trees, etc Some other models for managerial decision making are Vroom-Yetton model and kepner-tregoe model.
The vroom-Yetton Model
The vroom-Yetton model discusses a set of possible decision making style ranging from completly autocratic (A1) to completely democratic (GII), with styles all, C1 and CII lying-in between the two extremes. The salient features of the styles are given below.
- In style A1, the manager makes the decision entirely on his own.
- In style All, the manager collects information from other , but makes decision himself.
- In style All, the manager discusses the problem individually with others, but the final decision is his/her . in style CII, the manager discusss the problem with others and gets the collective responsive before arriving at a decision.
- In style GII, the manager discusses the problem with group of workers and allows the group to take decision . Here the manager extends complete freedom to the group and makes no effort to influence the group.
The kepner-tregoe Model specifies a series of steps to be followed for arriving at decision . some of steps are given below.
- Identify the problem
- Identify the conditions under which it is more predominant
- Identify the condition under which it is not predominant
Look for causes responsible for the conditions that make the problem more predominant and suggest how these can changed for solving the problem
Analyze what would have happened for what will happen if the suggested changes are implemented
If the causes identified can explain the problem and, without much assumptions, the suggestions point to a feasible solution, it should be implemented.
I hope this will helps thank you.