Decision making in Management

Decision Making
*definition
*process
*principles
*elements

1. DECISION MAKING Definitions,Elements,Process,Principles

2. What is Decision-Making?? According to George R Terry “Decision Making is the selection based on some criteria from two or more possible alternatives”

3. Elements of Decision-Making A decision is taken according to the environment of business Decisions are taken when they are needed Employees are also involved in Decision-Making Psychology of an individual is involved in Decision-Making Best decision-making requires intelligence,experience,and insight into a problem A problem is fully analysed and available alternatives are considered before taking decisions Centralisation and Decentralisation of authority affect decision making indirectly

4. Process of Decision-Making

5. Principles of Decision-Making

6. 1.Marginal theory of decision-making Here the manager adopts the principle of law of diminishing returns. For instance, a toy manufacturer should only produce toys until marginal expense is equal to marginal benefit. By breaking down decisions into measurable, smaller pieces, the toy manager can optimize profits

7. 2.Mathematical theory in decision-making Mathematical theory gives scientific approach to manager while taking decisions. Venture theory, game theory, probability theory and waiting theory are some of the mathematical theories

8. 3.Psychological Theory A manager takes a decision on the basics of his aspiration, technological skill,personality,social status and organisation status. Though the manager is expected to take decision confined to the scope of his responsibility and authority, there is an impact of psychology over the decision

9. 4.Principle of Alternatives Decision is a selection process. All the alternatives are evaluated and screened in the order of their usefulness.Finbally the best alter-native is selected according to the circumstances of the purpose

10. 5.Principle of limiting Factors The fundamentals of a problem are studied. An reference or conclusion is drawn on the basics of study. The manager takes a decision with the help of conclusion or interference. The decision may be based on a limiting factor. The limiting factor may be time, cost or resources Decision are supposed to be good and the limiting factor is considered while taking a decision

11. 6.Principle of Participation This principle is based on human behaviour and human relationship. Each and every person wants to be treated as an important person. So the management may allow employees to have a say in the process of decision making