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Programmed decisions are those that are made in accordance with some policy, rule or
procedure so that they do not have to be handled de navo each time they occur. In the
case of non-programmed decisions, since each manager may bring his own personal
beliefs, attitudes and value judgements to bear on the decision process. It is possible for
two managers to arrive at distinctly different solutions to the same probl em, each
claiming that he is acting rationally.

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a) Degree of Purity of Decision - A decision which has a long -range impact, like
replacement of men by machinery or diversification of the existing product lines must be
rated as a very major decision.
b) Impact of the decision on other functional areas - If a decision affects only one function it
is a minor decision. Thus the decision to shift from bound ledger to loose leaf ledger may be
made by the accountant himself si nce it affects no one except his department.

c) Qualitative factors that enter the decision ± A decision which involves certain subjective
factors is an important decision.

d) Recurrrance of decisions - Decision which are rare and have no precedents a s guides
may be regarded as major decisions and may have to be made at a high level.
""" &        - Routine, tactical or housekeeping decisions are
those which are supportive of rather than central to the company¶s operations.
"'"    (    - Decisions may be taken either by an individual or by
a group.

Simple and complex Decisions - when variables to be considered for solving a problem are
few, the decision is simple, when they are many the decision is com plex.

Steps in rational decision making:

a) Recognising the problem

b) Deciding priorities among problems.
c) Diagonosing the problem.
d) Developing alternative solutions or courses of action.
e) Measuring and comparing the consequences of alternative
solutions.
f) Converting the decision into effective action and follow up
action.

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The three models are: 1) the econologic model or the economic man, 2) the bounded
rationally model or the administrative man; and 3) the implicit favorit e model or the
gamesman. You will notice that each model differs on the assumptions it makes about the
person or persons making the decision.
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 The econologic model represent the earliest attempt to model decision pro cess. Briefly,
this model rests on two assumptions: (1) It assumes people are economically rational;
and (2) that people attempt to maximize outcomes in an orderly and sequential process.
Economic rationality, a basic concept in many models of decision -making, exist when
people attempt to maximize objectively measure advantage, such as money or units of
goods produced. That is, it is assumed that people will select the decision or course of
action that has the greatest advantage or payoff from among the many alternatives. It is
also assumed that they go about this search in a planned, orderly, and logical fashion.

Following are the steps in decision making process:

1. Discover the symptoms of the problem or difficulty

2. Determine the goal to be achieved or define the problem to be solved
3. Develop a criterion against which alternative solutions can be evaluated.
4. Identify all alternative courses of action.
5. Consider the consequences of each alternatives as well as the likelihood of
occurrence of each.
6. Choose the best alternative by comparing the consequences of each alternative (
step 5) with the decision criterion 9step 3) and
7. Act or implement the decision
The economic man model represents a useful prescription of how decisions should be
made, but it does not adequately portray how decisions are actually made. If you look
closely in this prescriptive model you shall be able to recognize some of the assumptions it
makes about the capabilities of human beings.

First, people have the capability to gather all necessary information for a decision ie., people
can have complete information.

Second, people can mentally store this information in some stable form ie., they can
accurately recall any information any time they like.

Third, people can manipulate all this information in a series of complex calculations design to
provide expected values; and

Fourth, people can rank the consequences in a consistent fashion for the purpose of
identifying the preferred alterna tive.

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An alternative model, one not bound by the above assumptions, has been presented by
Simon. This is the bounded rationality model, also known as the administrative man model.

As the name impl ies, this model does not assume individual rationality in the decision
process. Instead, it assumes that people, while they may seek the best solution, usually
settle for much less because the decisions they confront typ9ically demand greater
information processing capabilities than they possess. They seek a kind of bounded (or
limited) rationality in decisions.

The concept of bounded rationality attempts to describe decision process in terms of here
mechanisms:

Sequential attention to alternative solut ion: People examine possible solutions to a problem
sequentially. Instead of identifying all possible solutions and selecting the best as suggested
in the econologic model), the various alternatives are identified and evaluated one at a time.
If the first solution fails to work it is discarded and the next solution is considered. When an
acceptable (that is, good enough and not necessarily µthe best¶) solution is found, the search
is discontinued.

Use of heuristics: A heuristic is a rule which guides the search for alternatives into areas that
have a high probability for yielding satisfactory solutions. For instance, some companies
continually select management graduates from certain institutions because in the past such
graduates have performed well for the company. According to the bounded rationality
model, decision makers use heuristics to reduce large problems to manageable proportions
so that decisions can be made rapidly. They look for obvious solutions or previous solutions
that worked in similar situations.

Satisfying: Whereas the econologic model focuses on the decision maker as an optimizer,
this model sees him or her as a satisfier. An alternative is optimal if: 91) here exists a set of
criteria that permits all alternatives to be compared: and (2) the alternative in question is
preferred, by these criteria, to all other alternative. An alternative is satisfactory if (i) there
exist a set of criteria that describes minimally satisfactory alternatives; and (2) the alternative
in question meet s or exceeds all these criteria.

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This model deals primarily with non -programmed decisions. The non -programmed decisions
are decisions that are novel or unstructured, like seeking one¶s first job. Programmed
decisions, in contrast, are more routine or repetitious in nature, like the procedures for
admitting students to a secondary school.
The implicit favorite model developed by Soelberg (1967) emerged when he
observed the job choice process of graduating business students and noted that, in many
cases the students identified implicit factories very early in the recruiting and choice process.
However, they continued their search for addi tional alternatives and quickly selected the best
alternative candidate, known as the confirmation candidate. This was done through
perceptual distortion of information about the two alternatives and thorough weighing
systems designed to highlight the pos itive features of the implicit favourite. Finally after a
decision rule was derived that clearly favoured the implicit favourite, the decision was
announced. Ironically, Soelberg noted that the implicit favourite was typically superior to the
confirmation candidate on only or two dimensions. Even so, the decision makers generally
characterized their decision rules as being multi -dimensional nature.
How it can be improved:
These conditions of knowledge are often referred to as the environment of decision
making. This environment may be of three types 1) certainity, 2) risk and 3) uncertainity.
Certainity: The decision maker can specify the consequences of a particular decision or act.
Certainity about future events is difficult and managerial decisions must be made in
awareness that future conditions may vary widely from those contemplated when the
decision is being made.
Risk: In decision making under the condition of risk, the consequences of a particular
decision cannot be specified with certainity but can be specified with known probability
values.
Uncertainity: More prevalent than either conditions of centainity or risk are conditions of
uncertainity. Uncertainity exists when the decision maker does not know the probabilities
associated with the possible outcomes though he has been able to identify the possible
outcomes and the related pay offs.

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 vodrej Consumer Products Ltd.(vCPL) is a major player in the Indian FMCv market
with leadership in personal, hair, household and fabric care segments. The company
employs 950 people and has three state -of-the-art manufacturing facilities at Malanpur
(M.P.) vuwahati (Assam) and Baddi ( H.P.). Our focus is on providing our customers with
innovative, value for money solutions for meeting their daily needs and improving the quality
of their life. This is achieved through the brands the company markets.

We are among the largest marketer of toilet soaps in the country with leading brands
such as CINTHOL , FAIRvLOW , vODREJ NO 1 . Our FAIRvLOW brand, India's first
Fairness soap, has created marketing history as one of the most succesful innovations.

We are the leader in the hair colour category in India and have a vast product range
from vODREJ RENEW COLOURSOFT LIQUID HAIR COLOURS, vODREJ LIQUID &
POWDER HAIR DYES to vODREJ KESH KALA OIL, NUPUR based Hair Dyes.

We are also the preferred supplier for contract manufacturing of toilet soaps be some
of the most well-known brands in the country. We are supported in our endeavour by a
state-of-the-art Research Centre based in Mumbai.

Established in 1990 by Brian Boyce and Vicki Dryden Wyatt, .  0 * was
acquired by the vodrej vroup in October 2005. Keyline operates in the toiletries a nd
personal care sector, and its portfolio includes a number of important niche brands, some of
which are household names such as Cuticura, Aapri, Erasmic and Nulon. vodrej Consumer
Products Ltd. (vCPL), one of India's leading Fast Moving Consumer voods (F MCv)
companies acquired (% ( c  +1 on October 1, 2007.

They selected a six step decision making process that synthesized the decision
making models used in existing training, not just ethics training. The model is descriptive of
how people i ntuitively make decisions and makes the steps explicit. The six steps of this
natural, intuitive decision -making process are:

j Step 1: Define the problem

j Step 2: Identify available alternative solutions to the problem
j Step 3: Evaluate the identified alter natives
j Step 4: Make the decision
j Step 5: Implement the decision
j Step 6: Evaluate the decision

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The most significant step in any decision making process is describing why a decision is
called for and identifying the most desired outcome(s) of the decision making process. One
way of deciding if a problem exists is to couch the problem is terms of what one wanted or
expected and the actual situation. In this way a problem is defined as the difference between
expected and/or desired outcomes and actual outcomes.

This careful attention to definition in terms of outcomes allows one to clearly state the
problem. This is a critical consideration because how one defines a problem determines how
one defines causes and where one sear ches for solutions.
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The key to this step is to not limit yourself to obvious alternatives or what has worked in the
past but to be open to new and better alternatives. How many alternatives s hould you
identify? Ideally, all of them. Realistically, we teach that the decision maker should consider
more than five in most cases, more than three at the barest minimum. This gets away from
the trap of seeing "both sides of the situation" and limiting one's alternatives to two opposing
choices; either this or that.

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As you evaluate each alternative, you should be looking at the likely positive and negative
cones for each. It is unusual to find one alternative that would completely resolve the
problem and is heads and shoulders better than all others. Differences in the "value" of
respective alternatives are typically small, relative and a function of the decision maker's
personal perceptions, biases and predis positions.

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When acting alone this is the natural next step after selecting the best alternative. When the
decision maker is working in a team environment, this is where a proposal is made to the
team, complete with a clear definit ion of the problem, a clear list of the alternatives that were
considered and a clear rationale for the proposed solution.

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While this might seem obvious, it is necessary to make the point that deciding on the best
alternative is not the same as doing something. The action itself is the first real, tangible step
in changing the situation. It is not enough to think about it or talk about it or even decide to
do it. A decision only counts when it is implemented. As Lou verstner ( CEO of IBM) said,
"There are no more prizes for predicting rain. There are only prizes for building arks."

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Every decision is intended to fix a problem. The final test of any decision is whether or not
the problem was fixed.