Decision-making in Functions of Management.pptx

Decision-making Meaning and Definition, Importance, Types of Decisions, process. Risk and uncertainty, decision trees, Tools and Techniques of Decision making

1. Decision-Making Dr. Madhavi Peddada

2. Definition A decision can be defined as  a course of action purposely chosen from a set of alternatives to achieve organizational or  managerial objectives or goals . According to Drucker –  “What­ever a manager does he does through making decisions.”  According to Terry, decision-making “as the selection of one behaviour alternative from two or more possible alternatives.”

3. Meaning Decision-making is the cognitive process of selecting a course of action from various alternatives. D ecision-making is about discovering and selecting the best alternative among several options. It typically involves considering factors such as the likelihood of success and the alignment of goals, desires, and values. The goal is to make the best choice possible given the available information, even though complete certainty is rarely achievable. This means that decision-making involves some level of risk, with some decisions carrying higher risks than others.

4. Decision Making Decision-making can be defined as the cognitive process of choosing a course of action from multiple alternatives . It involves evaluating these alternatives based on the decision maker's values and preferences, ultimately resulting in a final choice , which can be seen as an opinion.

5. Characteristics Goal-oriented Alternative Analytical-Intellectual Dynamic Process Pervasive Function Continuous Activity Commitment of Resources Human and Social Process Integral Part of Planning

6. Importance Achieving Goals Problem Solving Innovation and Growth Resource Management Risk Management 6. Conflict Resolution 7. Improving Efficiency 8. Personal Development 9. Building Trust and Confidence 10. Adaptability Decision-making is essential for achieving success , managing challenges , and making progress towards desired outcomes

7. Types Strategic Decision-making Tactical Decision-making Operational Decision-making Programmed Decision-making Non-programmed Decision-making Individual Decision-making Group Decision-making Rational Decision-making Intuitive Decision-making Emotional Decision-making Each type of decision-making has its own strengths and weaknesses, and the most appropriate approach depends on the specific situation and context.

8. PROCESS

9. Risk Risk in decision-making refers to the possibility of an outcome that differs from what is expected or desired. It involves situations where the probabilities of different outcomes are known. Uncertainty Uncertainty, on the other hand, refers to situations where the probabilities of different outcomes are unknown. It involves ambiguity and lack of information, making it difficult to predict outcomes accurately. Categorical Interpretation Application of Limiting Factor Adequate Information 4. Considering Others' Views 5. Timeliness Guidelines for Making Effective Decision

10. Tools & Techniques Decision Matrix Pareto Analysis Decision Trees SWOT Analysis Cost-Benefit Analysis Brainstorming Decision Support Systems (DSS ) Scenario Analysis Game Theory Probability and Statistics

11. DECISION TRESS visual representation of a problem, showing all possible actions and outcomes at each stage of decision-making. useful for multi-stage decisions or when several uncertain variables are involved Construction start with a decision point, followed by branches representing possible actions. Outcome points show possible results, followed by branches for each outcome. useful for risk-neutral decision-makers but has limitations in accurately predicting outcomes for one-off decisions and requires accurate probability estimates.

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