Individual decision making

DECISION MAKING
Individual decision making
Decision –making is the “selection of a course of action from among alternatives; it is the core of planning.” - Koontz and Weihrich
Decision-making means selecting a course of action out of alternative courses to solve a problem. Decisions may be major or minor, strategic or operational, long-term or short-term. They are made for each functional area at each level. The importance of decisions, however, varies at each level.
Decision making is a modest attempt to match environmental opportunities with organisation’s strengths. It is based on forecasts and assumptions about environmental factors.
FEATURES OF �DECISION MAKING
Identify the Problem
Diagnose the Problem
Establish Objectives
Collect Information
Generate Alternatives
Evaluate Alternatives
Select the Alternatives
Implement the Alternative
Monitor the Implementation
TYPES OF DECISIONS
TECHNIQUES OF DECISION MAKING
Linear programming
Simulation
Probability theory
Decision tree
Queuing theory
Gaming theory
Network theory
Modern techniques for making programmed decisions:
Creative Techniques
i. Brainstorming
ii. Nominal Group Technique

1. TRINITY INSTITUTE OF PROFESSIONAL
STUDIES

Sector – 9, Dwarka Institutional Area, New Delhi-75
Affiliated Institution of G.G.S.IP.U, Delhi
ORGANISATIONAL
BEHAVIOUR (OB)
BBA201
INDIVIDUAL DECISION MAKING
PINKI BHARDWAJ
ASSISTANT PROFESSOR

2. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
Decision –making is the “selection of a course of action from among
alternatives; it is the core of planning.” - Koontz and Weihrich
Decision-making means selecting a course of action out of alternative
courses to solve a problem. Decisions may be major or minor, strategic
or operational, long-term or short-term. They are made for each
functional area at each level. The importance of decisions, however,
varies at each level.
Decision making is a modest attempt to match environmental
opportunities with organisation’s strengths. It is based on forecasts and
assumptions about environmental factors.
DECISION MAKING

3. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
FEATURES OF
DECISION MAKING
Decision –making has the following features:
1.Decision-making is goal-oriented. The purpose of decision is to
achieve a goal; sectional, departmental and organisational.
2.It is required for every managerial function though it is closely
related to planning.
3.It is a process of choice; choosing a course of action out of various
courses to solve a specific problem.
4.Problem-solving is the basis for decision making as decisions are
made to solve problems.
5.Decisions are made to solve organisational problems and exploit
environmental opportunities.
6.It is a pervasive process.

4. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
FEATURES OF
DECISION MAKING
7.Decisions are made at all levels in the organisation; though nature
and importance of decisions vary at different levels.
8.It is required for every situation-certainty, risk and uncertainty.
9.It is situational in nature. Different situations require different
decisions.
10.It is a continuous process. Managers continuously evaluate
organisational activities and find problems that require decision
making.
11.It is an intellectual process. Managers use judgement, knowledge
and creativity to develop solutions to the problem.
12.A manager is oriented towards making decisions rather than
performing the actions personally; actions are carried out by
others.

5. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
PROCESS OF DECISION MAKING

6. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
TYPES OF DECISIONS
Decisions can broadly be grouped into two categories:
1. Programmed Decisions: Decisions related to structured situations,
where the problem is more or less routine and repetitive in nature are
known as programmed decisions.
2. Non- Programmed Decisions: These decisions are taken in
unstructured situations which reflect novel, ill-defined and complex
problems. The problems are non-recurring or exceptional in nature.
These decisions involve fair degree of uncertainty since outcomes of
decisions are not always known.
Different types of programmed and non- programmed decisions is
given below:
1. Organisational and personal decisions: these decisions reflect use of
authority. Decisions taken in interest of the organisation are

7. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
TYPES OF DECISIONS
organisational decisions and decisions taken for personal interests are
personal decisions.
2. Operational and strategic Decisions: These decisions reflect scope of
decision making processes. Operational decisions are taken as a matter
of routine. They relate to daily operations and aim to achieve short
term objectives of the firm. Decisions related to important and non-
recurring problems are called strategic decisions. They relate to the
long term goals of the company, define relationship of the organisation
with the environment and are risky in nature.
3. Research and crisis-intuitive Decisions: These decisions reflect
urgency of decision-making. Decisions which involve regular survey
of the market are research decisions and decisions made under
situations of crisis or emergency are crisis- intuitive decisions.

8. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
TYPES OF DECISIONS
4. Opportunity and Problem-solving decisions: these decisions reflect
foresightedness. Managers forecast opportunities to promote
organisational growth. The decision to grow and diversify in the market
is an opportunity decisions. Problem solving decisions solves a specific
problem.

9. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
TECHNIQUES OF DECISION
MAKING
Traditional Techniques: These techniques are divided into two groups:
1.Traditional techniques to make programmed decisions.
a.Habits
b.Operating procedures
c.Organisation Structure
2.Traditional techniques for making non-programmed decisions: managers
solve unstructured, novel and non-repetitive problems through judgement,
intuition and creativity.
Modern Techniques:
1.Modern techniques for making programmed decisions:
a.Break-even technique
b.Inventory models

10. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
TECHNIQUES OF DECISION
MAKING
c.Linear programming
d.Simulation
e.Probability theory
f.Decision tree
g.Queuing theory
h.Gaming theory
i.Network theory
2.Modern techniques for making programmed decisions:
a.Creative Techniques
i. Brainstorming
ii. Nominal Group Technique

11. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
TECHNIQUES OF DECISION
MAKING
iii Delphi technique
b. Participative techniques
c. Heuristic techniques