Decision making

what is decision making, conditions of decision making, decision making under certainty, decision making under uncertainty, decision making under risk, process of decision making, how to effactive decision making

1. Contains: Introduction of Decision Making What is decision making process Effective decision making Decision making condition Decision making under certainty Decision making under risk Decision making under uncertainity

2. Decision making Decision-making  is the selection of a belief or a course of action among several alternative possibilities. Every decision-making process produces a final choice; it may or may not prompt action. Decision-making is the process of identifying and choosing alternatives based on the values and preferences of the decision- maker.it's very important..

3. Decision making process includes reco g niz i n g and d efining the nat u re o f a decisio n situati o n iden t ifyin g alter n atives choos i n g the ‘ b est’ eff e ctive] alter n ativ e and putti n g it int o prac t ice . [ m ost

4. off emp l oy e es , o r termin atin g a strat e gi c alliance . Sometimes effective decisions must be made to : Optimize some set o f factors such a s profits , sales , emp l oyee welfar e an d mark et share or Min i mize loss , e xpe nse s or employe e tur n ove r or Sele c t bes t method for go i n g out o f bu s in e ss, layi n g

5. Man a gers a b out make both decis i ons pro b l ems (un d esi r a b le o p p ortunities situati o ns) . situations) and (desir a ble Cuttin g costs by 10% Learnin g that the c ompan y has earne d highe r- t h a n- pro j ected profits I t may take a l o ng time befo r e a man a ge r can know for sure if the right decisio n wa s mad e.

6. Decisio n - Making Conditions Deci s i on Certai nty Mak i ng Un d er Deci s i on Risk Mak i ng Un d er Deci s i o n Mak i ng Uncert a inty Un d er

7. Decisio n Mak i n g U nde r Certainty A state of certainty exist s wh en a d ecis i o n m a ker k n ows, wi t h reas o n a bl e certainty, wha t the alter n ativ e s ar e and wh a t co n diti o n s ar e ass o ciat e d wit h ea c h alt e rn a tiv e . Very few org a nizat i o n a l deci s i ons , ho w ever , ar e made unde r these con d itions . The comp l e x and turbul en t en v ir o nme n t in wh i ch busin e sses exis t rar e l y allow s for such decisio ns.

8. Decisio n Mak i n g U nde r R i sk A st a te of risk exist s whe n a decis i o n maker makes decis i on s unde r a cond it i o n in w h ich the avai l ab i l ity o f e ac h alternative a n d its potentia l pa y off s an d cos t s ar e all asso c iated with probabilit y estimat e. De c is i on s such a s these are b a sed o n p a st exper i ences , rele v an t information , the advice o f other s an d one’s ow n judgme n t. De c is i o n is ‘calcula t ed’ o n the basi s of w h ich altern ative ha s the h ighe st probab i l ity o f wor k ing eff e ctivel y . [union negotia t ions, Porsch e’s SUV focus v s high - perfor m ance sports cars]

9. Decisio n Making Unde r Uncertainty A state of uncerta i nt y exist s whe n a decisio n maker does not know al l of the altern a t ives , the risks associate d with each , or the conseq u ence s each altern ative is lik e l y to hav e . Most of the major decisio n making in today’s organizatio ns is done und e r these condition s . T o make ef fective decision s und e r these conditions, managers must secure as much rele v an t informatio n as possibl e and approac h the situation from a log i cal and rational vie w . Intuition, judgmen t and experience al w ay s pla y major roles in the decisio n- making proces s under these conditions .