DECISION MAKING PROCESS IN MANAGEMENT

A STUDY AND PRACTICAL ANALYSIS OF SIMULATION AND MARKOV CHAIN

1. A Discussion on Management Decision Making Process & Method PREPARED BY: SOUMYA PATTNAIK SAMBIT KUMAR SAHU SUPRIYA MOHANTY AMAR SINGH GOGE SUSMITA MOHAPATRA UNDER THE GUIDANCE OF : Prof. (Dr.) SREEKUMAR

2. CONTENT WHAT IS MANAGEMENT? DEFINATION CLASSICAL THEORY BEHVIOURAL THEORY MODERN THEORY DECISION MAKING PROCESS OF DECISION MAKING METHODS OF DECISION MAKING APPROCHES TO PROBLEM SOLVING MATHEMATICAL PROBLEM ON SIMULATION AND MARKOV ON REAL-LIFE EXAMPLE FUTURE SCOPE OF SIMULATION AND MARKOV CONCLUSION

3. WHAT IS MANAGEMENT? Process of planning, leading & controlling the work of a organization & resources to reach the started organization goals. It is said by Paul Hawken, (an US entrepreneur and author) that Good management is the art of making problems so interesting and their solutions so constructive that everyone wants to get to work and deal with them.

4. DEFINITIONS According to Peter Ducker Management is a multi-purpose organ that manages businesses & manages managers & manages workers & work. According to Mary Parker Follet Management is the getting things done through people. According to Henry Fayol manage is to forecast and to plan, to organize, to command, to co-ordinate & to control.

5. CLASSICAL THEORY

6. ABOUT SCIENTIFIC MANAGEMENT This implies the art of knowing what is to be done. Under this approach scientific technology are applied in the recruitment selection and training of workers . This is also used in talking various industrial problems .

7. ADMINISTRATIVE MANAGEMENT Administrative Management is concerned about the design and management of an organization in the lesson . This theory generally calls for a formalized administrative structure , a clear division of labor and delegation of power .

8. BUREAUCRACY According to the bureaucratic theory of Max Weber , bureaucracy is the basis for the systematic formation of any organization and is designed to ensure efficiency and economic effectiveness.

9. BEHAVIOURAL THEORY Behave: to act in a particular way of a thing : to function , to react or to move

10. BEHAVIORAL SCIENCE APPROACH Abraham Maslow , Douglas McGregor and other researchers used techniques that were about different attitudes , behaviour and functions of individuals and groups in various organization. This approach assumes that social and psychological features of an employee on individuals basis and a part of a work group need to be given prime importance.

11. HUMAN RELATION MOVEMENT Application of behavioral science to management theories. Stemmed from Hawthorne studies is based on the idea that a manager’s concern for workers will lead to their increased satisfaction and improved performance.

12. MODERN THEORY

13. QUANTITATIVE APPROACH Focused(knowing what you are looking for) Explanatory(testing theories/models) Objectives(removes the researcher bias) Statistical (analysis of number) Scientific (use of experimental methods) SYSTEM APPROACH A system approach is set of interrelated parts arranged in manner that produces a unified whole.

14. CONTIGENCY APPROACH Contingent (meaning):subject to chance; unpredictable The essence of contingency approach to leadership is that leaders are most effective when they make their behavior contingent upon situational forces, including group member characteristics. SOCIAL SYSTEM APPROACH The patterned series of interrelationships existing between individuals, groups, and institutions and forming a coherent whole . Coherent-logically and well organized DECISION MAKING APPROACH This theory states that how decision should be made to achieve the desired outcomes

15. DECISION MAKING Decision making is an integral part of management. The decision maker selects one strategy over others depending on same criteria like: utility, sales, cost or rate of return. The specific combination of goals is not entirely depending on the decision maker. That is, the value system is usually modified by other interested groups like, stock holders, employers, unions, creditors, government, etc.

16. PROCESS OF DECISION MAKING feedback Source:FIG1 : Decision making process; L.M PRASAD PAGE -179 PRINCIPLE AND PRACTICE OF MANAGEMENT

17. METHODS OR TOOLS OF DECISION MAKING Simulation Method- There are many problems in real life we can’t specify the problem or repressed it mathematically due to stochastic nature. Thus in such situation stimulation is of an use when all else fail because it solve the complexity in the problem formulation, conflicting idea needed to properly describe the problem under this is also call as method of last result . Markov Analysis- A stochastic (or random) system is called a Markov Process if the occurrence of a future state depends on the immediately preceding state & only on it.

18. WHY DECISION MAKING PROCESS IS REQUIRED Making choices by identifying a decision. Also for gathering information, and assessing alternative resolutions. Using a step-by-step decision-making process. Thoughtful decisions by organizing relevant information and defining alternatives  

19. APPROACHES TO PROBLEM SOLVING SOURCE : MANAGEMENT THEORY AND PRACTICE P. SUBBA RAO , HIMALAYA PUBLISHING HOUSE ISRO 9001:2008 CERTIFIED (2 ND REVISED EDITION 2014) PAGE:134

20. SIMULATION People arrive at the Rourkela Railway station to buy tickets according to the following distribution. (DATE-13-10-18) Inter-arrival Time (Min.) Frequency 2 10 3 20 4 40 5 20 6 10 Contd.

21. Inter-arrival Time  (Min.) Frequency Probability Cumulative Probability tag. No. 2 10 0.10 0.10 0 - 09 3 20 0.20 0.30 10 - 29 4 40 0.40 0.70 30 - 69 5 20 0.20 0.90 70 - 89 6 10 0.10 1.00 90 - 99

22. Sl.no R. no Inter arrival time Arrival time Service starts Service ends Waiting Time Server Waiting Time Person 1 17 3 10.03 10.03 10.08 3 - 2 86 5 10.08 10.08 10.13 - - 3 84 5 10.13 10.13 10.18 - - 4 79 5 10.18 10.18 10.23 - - 5 33 4 10.22 10.23 10.28 - 1 6 55 4 10.26 10.28 10.33 - 2 7 6 2 10.28 10.33 10.38 - 5 8 42 4 10.32 10.38 10.43 - 6 9 93 6 10.38 10.43 10.48 - 5 10 38 4 10.42 10.48 10.53 - 6 11 58 4 10.46 10.53 10.58 - 7 12 71 5 10.51 10.58 11.03 - 7 Total             39

23. Average waiting time before service. = Total waiting time (person)/Total no. of arrivals  = 39/12 = 3.25 minutes. Average time a person spends in the system. = Service time + Average waiting time before service = 5 + 3.25 = 8.25 minutes. MARKOV EXAMPLE: (CHAIN METHOD) The transition probability matrix for three months period concerning two brands of face wash is as under: TO FROM Himalaya face wash Clean and clear face wash Himalaya face wash 0.7 0.3 Clean and clear face wash 0.4 0.6 Fig: referred table: from s kalavathy; operations research 4 th edition CONTD.

24. 0.7 0.7 0.3 0.7 0.3 0.4 0.6 0.3 3 0.6 0.4 0.6 6 0.4 0.3 0.7

25. STEADY – STATE METHOD Let say, Himalaya = h Clean and clear = c As we know probability 1 + probability 2 = 1 Therefore, here h + c =1 equation 1 Now, If h = 0.7h + 0.4c h= 0.7h + 0.4 (1-h) h = 0.4/0.7 h = 0.571 Putting the value of “h” in equation 1 we get: h + c = 1 0.571 + c = 1 c = 0.428 So, h + c = 0.571 + 0.428 = 0.999 which is nearly equal to 1 .

26. FUTURE SCOPE In simulation: From the Business Advantage resource group, 55% of design users are aware of simulation but only 34% use simulation in their designs. However, according to the report, simulation is ranked 4th out of the 15 most important CAD trends. Engineers can now build simulation apps with the help of cloud computing and storage. Instead of shifting their focus from current projects, engineers could let their colleagues run an app to perform an analysis on their own, and then suggest a design change based on the app results . CONTD.

27. One of the most common words you hear from manufacturers today is “innovation,” but what that might mean is specific to each one. In any case, innovation is likely a placeholder for a dramatic change in how products function, the process in which they were designed, the materials and/or manufacturing process used in their construction or perhaps the sales model in which consumer access them. Each of these axes of innovation mean that a company has to move away from its comfort zones , areas of experience and instinct that have been used to drive their traditional business. Simulation enables a cost-effective examination of “what if” scenarios, system interactions, and malleable topologies that traditional design processes would not have time to consider.

28. In markov process Markov Chains Method is used intensively for research conducted on such social topics as the brand selection of customers, income distribution, immigration as a geographic structure, and the occupational mobility Markov Chains Model is frequently used for topics such as “brand loyalty” and “brand switching dynamics”.

29. CONCLUSION We have used simulation here for determining the railway station survey that what are the average waiting time before and after service. Here it is a simple problem where we have used simulation. But in large companies simulation can be used in many of purpose especially for designing. This enables a cost-effective examination of “what if” scenarios, system interactions, and malleable topologies that traditional design processes would not have time to consider. We have also used Markov chain as a forecasting tool that could be used to determine market environment in the future. This would in no small way assist marketing managers to compare the intensiveness gained in a particular period of time with product life cycle and also allow them to measure the effect of structural changes such as promotions and price cuts.

30. It is evident that when consumers cannot derive satisfaction from a product, they switch to other brands. This makes a product to lose market to others which eventually reduces the profit level of the product that loses market to others. For the level of switching and market share to be minimized, producers of products must be consumer oriented in totality and maintain quality of their products. Marketing managers should not also allow their products to be out of market to avoid irreversible substitute. It was observed that the switching of the face wash by one customer can also determine the same with a variety of customer of different groups , it is obvious that the Markov chain is an important technique in showing the tendency of a customer to be brand loyal in a long period of time and in determining the market share of the brands. CONTD .

31. In this study it was observed that in forming the tendency of customers on becoming brand loyal, the advertising of the brand play an important role. Hence by taking these two tools we can make a proper and suitable decision which can effectively help an organization to make befitting decision for a particular situation.

32. HOW YOUR EVERDAY DECISION FOREVER SHAPE YOUR LIFE

33. REFERENCE James A.F Stoner, R. Edward Freeman, Danel R. Gilbert Jr. Development of management thought. LM PRASAD REPRINTED 2016. James A.F Stoner , R. Edward Freeman , Danel R. Gilbert Jr. PAGE-39 LM PRASAD REPRINTED 2016. PAGE-69,PAGE-51, PAGE-179, PAGE-187 SD SHARMA KedarNath Ram Nath & Co Publishers. 13 th edition PAGE-540 SD SHARMA 13 th edition PAGE-527 OPERATIONS RESEARCH 4 th edition S.KALAVATHY Vikas publishing house pvt.ltd. Management- Theory and practice P.SUBBA RAO , HIMALAYA PUBLISHING HOUSE 2 nd revised edition (2014) PAGE-134 https://onlinelibrary.wiley.com/doi/10.1002/9781118881866.ch2 https://www.managementstudyguide.com/what-is-decision-making.htm https://www.researchgate.net/publication/276294845_Systems_Theory_and_Systems_Approach_to_Leadership https://books.google.co.in/books?hl=en&lr=&id=C69EDwAAQBAJ&oi=fnd&pg=PP1&dq=quantitative+approach+to+management+researchers&ots=uaam5Q5knY&sig=W8p31OwiTVdYpzWdwjzxoCnW4z8#v=onepage&q=quantitative%20approach%20to%20management%20researchers&f=false