decision making steps and process in pom.pptx

decision making steps and process in pom

1. DECISION MAKING STEPS AND PROCESS By Logesh.A 91762214028

2. DECISION MAKING: Decision making is the fundamental process of evaluating different choices and selecting a specific course of action

3. DECISION MAKING STEPS AND PROCESS

4. IDENTIFYING THE PROBLEMS: The decision-making process begins by recognizing a problem that requires resolution. This problem may arise due to a gap between the present state and the desired state of affairs or as a result of environmental changes presenting threats or opportunities. Managers need to continuously monitor the situation to swiftly identify and define the real problem. Properly defining the problem is crucial for a clear decision-making environment, and it requires imagination, experience, and judgment to detect managerial decision needs effectively.

5. DIAGNOSING THE PROBLEMS Diagnosing the real problem involves analyzing its elements, magnitude, urgency, course, and its relation with other problems. Managers must gather all relevant facts and analyze them carefully to diagnose the problem accurately. The critical aspect of problem diagnosis is determining the actual causes or sources of the problem, ensuring that symptoms are not mistaken for the real issue. For instance, addressing manufacturing costs may not solve the problem if the real issue lies in poor engineering design. The problem can be analyzed based on its nature (routine or strategic), impact, futurity, periodicity, and relevant limiting or strategic factors.

6. DISCOVER ALTERNATIVES The next step in the decision-making process is to explore various possible alternatives. Rushing to adopt the first feasible solution is not advisable for executives. Identifying available courses of action may not always be apparent, and decision-makers must employ their ingenuity and creativity to recognize and relate them. Having a reasonably wide range of alternatives grants managers more freedom in their choices. However, it is prudent for management to focus on discovering critical or strategic alternatives relevant to the problem at hand, following the principle of the limiting factor.

7. EVALUATE ALTERNATIVES After discovering the alternatives, the next step is to evaluate them. This process involves measuring the positive and negative consequences of each option, considering costs and benefits. Judgement and knowledge are vital in assessing the net benefit of each alternative. Both quantitative and qualitative factors should be taken into account, including risk, available resources, and timing. Management should establish evaluation criteria to weigh the options effectively, considering factors like risk, economy of effort, timing, and limitation of resources within the organisation.

8. SELECT BEST SOLUTION After evaluating the alternatives, the optimal choice is selected. The optimum alternative maximizes results under the given conditions. This step is crucial in decision-making and sets successful managers apart from unsuccessful ones. Past experience, experimentation, research, and analysis contribute to selecting the best alternative

9. IMPLEMENT AND FOLLOW After making a decision, the implementation process begins with communication and obtaining feedback. Procedures, time frames, and necessary resources are established for implementation. Continuous monitoring ensures progress and desired outcomes. Responsibility for specific tasks is assigned to individuals if needed. Periodic progress reports help in assessing the decision’s Effectiveness. Herbert Simon’s decision-making process includes three phases: intelligence activity (identifying and diagnosing the problem, defining objectives, and collecting information), decision activity (generating and evaluating alternatives), and choice activity (selecting the best course of action, followed by implementation).

10. NATURE OF DECISION MAKING Goal-oriented: Effective decision-making hinges on setting clear goals and selecting strategies to achieve them, while remaining unbiased and avoiding personal prejudices that may affect judgment.
Dynamic Process: Decision-making is a dynamic process as it involves a time dimension and time lag. The techniques used for choice vary with the type of problem involved and the time available.
Continuous or ongoing process: It is a continuous and ongoing process as managers have to take a series of decisions.
Intellectual or Rational process: As decisions are products of reasoning, deliberation and evaluation, decision-making is an intellectual and rational process.
Set of Alternatives: Decision-making implies a set of alternatives as a decision problem arises only when there are two or more alternatives. No decision is to be made if there is only one alternative