What factors do you think differentiate good decision makers from poor ones?

Relate your answer to the six step rational model

DECISION MAKING IN ORGANIZATIONS INTRODUCTION

Managers within organizations make decisions and permeate everything an organization does. Decisions are the means by which organizations turn ideas into action and can have a positive or a negative impact. The conditions under which decisions are made in organizations is shown on the following diagram:-

The Decision Maker Faces Conditions of

Certainty

Risk

Uncertainty

Level of ambiguity and chances or making a bad decision Lower Moderate Higher

Types of Decisions Made in Organizations A choice made from among a set of alternatives is a decision. Decision making is the process of identifying alternatives, evaluating alternatives and selecting an alternative. Organizational decisions can be described in terms of two dimensions: Whether they are programmed or nonprogrammed and Whether they are made under conditions of certainty, risk or uncertainty.

Programmed and Non-programmed Decisions The degree to which decisions are programmed depends upon the number of times sikilar decisions have been made in the past

1. Programmed Decisions are decisions that occur often enough in an organization that standardized rules are used to make them. These standardized rules can take the form of decision guidelines, standard operating procedures or check lists. Programmed decisions help ensure that tasks are performed smoothly and consistently. 2. Non-Programmed Decisions are decision that occure infrequently enough in an organization that standardized rules cannot be used to make them. When making non-programmed decisions, managers must rely on their experience and intuition. Decisions about new products or building new manufacturing facilities are examples of non-programmed decisions. Certain, Risky and Uncertain Decisions The following figure illustrates how to distinguish among certain, risky and uncertain decisions. 1. If at the time a decision is made only a single outcome is likely, the decision is certain. Certain decisions are sure things. Organizations rarely make decisions under conditions of certainty through some decisions come close. 2. If at the time a decision is made, the probabilities of several alternative outcomes are known the decision is risky. For risky decisions several different outcomes are possible and the probability of each outcomes actually occurring is known. Many organizational decisions are made under conditions of risk 3. If at the time a decision is made, the range of possible outcomes is not know and the probability of these different outcomes occurring is not known the decision is uncertain. These decisions are among the hardest to make because managers do not know that the outcomes might be. Managers make then because they believe the

chosen course of action is the right thing to do. Managers try to make uncertain decisions succeed by marshalling the organizations resources. RESPONSIBILITY FOR DECISION MAKING Different types of decisions are made at different levels in the organizational hierarchy. Generally top managers make both non-programm4ed decisions and risky and uncertain decisions. Middle managers oftern hae the task of transforming non-programmed decisions into programmed ones and transforming risky decisions into certain ones. Lower-level managers generally make programmed and certain decisions.

THE DECISIONS MAKING PROCESS The steps in the decision making process are identifying alternative, evaluating alternatives and selecting from among alternatives. The classical model of decision making provides the logic for much decision making. Behavioral aspects of decision making create deviations from this approach. The Rational Decision-Making Model Rational decision making keeps the decision maker focused on facts and logic and helps guard against inappropriate assumptions and pitfalls. The approach is aimed at: Obtain complete and perfect information Eliminate uncertainty Evaluate all information rationally and logically The output from this process is to produce a decision that best serves the interests of the organization. The six stops in the classical decision making model are:1. Recognizing the need for a decision: Decision making is necessary when there is a gap between the actual state of the organization and the desired state. 2. Diagnosing the Problem: Diagnosis allows managers to understand why a gap between actual and desired states exists. In diagnosing the problem, managers usually collect data and information about each plausible explanation for the gap.

3. Developing alternative: Only after identifying the cause of a problem can an organization begin to develop alternative solutions. According to classical decision making theory all possible alternative solutions should be explored. 4. Selecting Alternatives: Managers must decide which alternatives to implement optimal solutions are alternatives that address a particular problem in the most complete way possible but a lowest cost. 5. Implementing Alternatives: Implementation occurs when the ideas and principles represented in a decision are actually put into operation by organizational members. 6. Exercising Control and Follow up: Classical decision making is completed only when organizations exercise control and follow-up.

BEHAVIOURAL ASPECTS OF DECISION MAKING The classical decision making model is very logical, very linear, in its approach. Limits on the information process capacities of decision makers sometimes make it impossible to use the classical model. Moreover, decision making in organizations is oftern influences by a variety of social and psychological phenomena. The administrative model describes how decisions often actually are made based on the assumptions that managers have incomplete and imperfect information are constrained by bounded rationality and ten to satisfied when making decision. 1. Bounded rationality describes the limited capacity of decision makers to process information. Most organizational decisions are made under conditions of bounded rationality. In general the more complex decision is or the longer time frame of knowing the consequences, the more decision makers are limited by bounded rationality. 2. Optimizing is searching for optical solution, satisfying is searching for satisfactory solutions. Typically organizations search not for optimal solutions but for satisfactory solutions. Costs and time factors are considered as organizations decide whether to satisfied or optimize. 3. Three powerful social and psychological factors limit the application of classical decision making is organizations. Escalation of commitment is a psychological pr5cess whereby decision makers become increasingly committed to their chosen course of action even as the ineffectiveness of

that action becomes more apparent. Organizational politics is a set of individual or group activities carried out for the purpose of acquiring, developing and using power to influence the outcomes of decisions. Managerial intuition is the ability of decision makers to make successful decisions while drawing on incomplete, inconclusive and contradictory information. GROUP DECION MAKING Any decision making process that is performed by the several individuals is group decision making. Advantages of Group Decision Making: Including more individuals in the decision making process can increase the amount of information and experience available. Group decision- making tends to generate more alternatives, possibly allowing the organization to optimize more. Communication and understanding are also increased when group decisionmaking is used. This, in turn, increases the likelihood of the decisions being accepted and supported. Disadvantages of Group Decision Making The amount of time needed for making a group decision is a bing drawback. Group decision making can also force compromises when strong, decisive actions might be needed, finally, group decision making can encourage groupthink, which is a phenomenon that emerges in a group when the group members desire for consensus and cohesion outweighs their desire to make the best possible decision. TECHNIQUES FOR GROUP DECION MAKING Several specific group decision making techniques can be employed by organizations. 1. Interacting Group Techniques: An interacting group is a decision making group in which members openly and freely discuss, argue about, or agree on the best alternative. It is the least structured of the group techniques. 2. Nominal Group Technique: More structure than the interacting group is the nominal group. Group members do not talk freely with another. A group

leader facilitates the decision process by describing the decision situation and asking for input from the participants. Alternatives are ranked and a decision is chosen. 3. Role-assigning Technique: The role assignment approach lies between the extremes of the interacting and nominal group techniques. Two particularly important roes are the devils advocate and the group facilitator. The responsibility of the group facilitator is to ensure that every group member feels free to express opinions, even controversial ones and that no one person dominates the group. 4. A Delphi Technique: This is used for developing a consensus of expert opinion. The Delphi procedure solicits input from a panel of experts who contribute individually. Their opinions are combined and averaged. These results are feedback to the experts and the process continues until a solution is reached.

HISTORY AND COMPANY PROFILE Pakistan Telecom Mobile Limited (PTML) is a wholly owned subsidiary of Pakistan Telecommunication Corporation Limited (PTCL) that started its operations in January 2001 under the brand name Ufone. As a result of PTCLs privatization, Ufone became a part of the Emirates Telecommunication Corporation Group (Etisalat) in 2006. Since its inception, Ufone has focused on the people of Pakistan, empowering them with the most relevant communication modes and services that enable them to do a lot more than just talk, at a price that suits them the most. Along with the claim of lowest call rates, clear sound and best network, Ufone offers its customers simplified tariffs with no hidden charges. With a strong and uniquely humorous communication direction that has now become Ufones signature across all advertising media, Ufone gives its customers many reasons to smile. This customer focus and best offering has allowed Ufone to build a subscriber base of over 20 million in less than a decade. Ufone has network coverage in 10,000 locations and across all major highways of Pakistan. Ufone currently

caters for International Roaming to more than 260 live operators in more than 150 countries. Ufone also offers Pakistans largest GPRS & BlackBerry Roaming coverage available with more than 150 Live Operators across 105 countries. More recently, Ufone has become a focused and intensive leader in VAS, constantly introducing innovative services, which have been the first of their kind in the Pakistani cellular industry. MISSION STATEMENT Our mission is to provide best services with best coverage that would eventually generate profit for the company and its stakeholders

GROWTH RATE As mobile users in the country have reached over 28 million at a very rapid pace, Ufone has maintained itself as the 2nd largest cellular operator in Pakistan with a subscriber base of around 6.5 million and a market share of nearly 25%. Ufone has seen a subscriber growth rate of over 200% in the last year, and since the start of 2005 Ufone added nearly 5 million subscribers onto its network. A remarkable achievement indeed, especially considering the fact that two new international players also intered into the market in 2005. Subsequently the growth in subscriber base caused a healthy trend in revenues which has doubled.

Role Of Ufone Managers in Decision Making Decision making is nonlinear, recursive process. That is mose decisions are made by moving back and forth between the choice of criteria(the characteristics we want our choice to meet) and the identification of alternatives (the possibilities we can choose from among). The alternatives available influence the alternatives we will consider. There will always to some risk some cost of failure when taking decisions. These risks can be reduced, but no eliminated, by following these steps when taking decision. These steps are sometimes called the decision making process. 1. Establish the Objectives of Organization

It is not possible to take good decision unless it is clear what the aims of the firms are. 2. Identify and Analyse the Problem to be Solved. All decision are taken to solve a problem. In our examples above, Jonas had the problem of how to spend the next few years of his life. Paul had the problem how top most profitably use a plot of land. Manager needs to know what they are trying to solve before deciding on a solution. For example sales manager is worried about falling sales. The decision is taken to lower prices. This has not effect on demand but lowers the firms profit margin. Only later does the manager discover that sales fell due to advertisement not appearing in paper when they were planned to. The wrong decision had been taken. The problem had not been correctly analyzed. 3. Collect Data on All the Possible Alternative Solution It is too easy to jump at the first solution thought of mamangers must collect data about all possible options before making afinal choice. This data must include the limits (or constraints) on what is possible. There is no point in suggesting that the business stores should open all day on Sunday, to boost sales, if this is actually against the law. 4. Implementing Decision Make the final decision and put it in to effect. This is called implementing decision. The managers job is not finished even when this has been done. It is important ot check to see that the decision has been put into effect and that it is working according to the plan. 5. Review and Evaluation of the Decision Look back to see whether the right decision was made. This is called review and evaluation of the decision. This is sometimes very hard to do especially if the wrong decision was made. But by looking back and evaluating what happened, lessons for the future can be learned. The Components of Decision Making The Decision Environment

Every decision is made within a decision environment, which is defined as the collection of information, alternatives, values and preferences available at the time of the decision. An ideal decision environment would include all possible information, all of it accurate and every possible alternative. However, both information and alternatives are constrained because the time and effort to gain information or identify alternatives are limited. The itme constraint simply means that a decision must be made by a certain time. The effort constraint reflects the limits of manpower, money and priorities. (You wouldnt want to spend three hours and half a tank of gas trying to find the very best parking place at the mall). Since decision must be made within this constrained environment, we can say that the major challenge of decision making is uncertainty and a major goal of decision analysis is to reduce uncertainty. We can almost never have all information needed to make a decision with certainty, some most decision involve an undeniable amount of risk. The fact that decisions must be made within a limiting decision environment suggest two things. First, it explains why hindsight is so much more accurate and better at making decisions that foresight. As time passes, the decision environment continues to grow and expand. New information and new alternatives appear even after the decision must be made. Armed with new information after the fact, the hindsight can many times look back and make a much better decision that the original maker, because the decision environment has continued to expand. The second thing suggested by the decision within an environment idea follows from the above point. Since the decision environment continues to expand as time passes, it is often advisable to put off making a decision until close to the deadline. Information and alternatives continue to grow as time passes so to have access to the most information and to the best alternatives, do not make the decision too soon. Now since we are dealing with real life, it is obvious that some alternatives might no longer be available if too much itme passes; that is a tension we have to work with, a tension that helps to shape the cutoff date for the decision. Delaying a decision as long as reasonably possible, than, provides three benefits:1. The decision environment will be larger, providing more information. There is also time for more thoughtful and extended analysis. 2. Now alternatives might be recognized or created.

3. The decision makers preferences might change. With further thought, wisdom and maturity, you may decide not to buy car X and instead to by car Y. Manager is considered as the Boundary Spanners because managers play a vital role in an organization. The success of any organization depends on the strategies of the manager of that organization. In any successful organization managers always remain in search of finding the way to accomplish his specific purpose. Managers not only work in favorable environment but also handles the unfavourable conditions of that organization because he has to face a number of internal and external factors hich affect directly the goals of that organization. Therefore managers are considers as boundary spanners. Different organization have different environment (many organization influenced by the following external factors which impose the uncertainly). 1. 2. 3. 4. 5. 6. 7. Customers Competitors Suppliers Government Pressure Group Political Economics Conditions

CHALLENGES FACE MANAGEMENT Ufone face many challenges with the ever growing needs of telecommunication. It must remain profitable with the decreasing economical situation if Pakistan. It must grow as well in these dark times if it has to remain IN the market. Ufone face very strong competition from its competitors. It must offer lowest rates with better quality service. New features and services should be introduced to make its customers loyal, happy and satisfied. STRUCTURE OF THE ORGANIZATION In Ufone the hierarchy is very lean, in general the whole setup is centralized, all the matters are to be reported to the main company and all the policies and targets are approved. At the higher level. But at the department level the structure is decentralized. Ufone has following functional departments:-

Technical Customer Operations Finance Administration & Procurement Human Resource Coordination (Govt. Relations) Marketing

Current CEO & President of UFone is Mr. Mubashir UFones Head office is in F-7 Markaz, Islamabad.

SWOT ANALYSIS SWOT analysis is an overall evaluation of the companys Strength. Weaknesses, Opportunities and Threats.

STRENGTH Strengths include internal capabilities, resources and positive situational factors that may help the company to serve its customers and achieve its objectives. The strengths of Ufone are as follows: Ufones differentiation is its biggest strength. Ufone offers lowest off-net call rates that differentiate it from its competitors. Ufone is offering more and better Value Added Services (VAS) than its competitors e.g. Walkie Talkie.

WEAKNESSES Weaknesses include internal limitations and negative situational factors that may interfere with the companys performance. The weaknesses of Ufone are as follow: Ufone has less professionalism within the organizational members

 As Ufone is a subsidiary of PTCL, which was formerly under government management, Ufone still has a shadow of a government organization.

OPPORTUNITIES Opportunities are favourable factors or trends in the external environment that the co9mapny may be able to exploit to its advantage. UFone has following opportunities in its way: Ufones biggest opportunity lyng ahead in near future is the phase of conversion of their GM technology into 3G (satellite based) technology.

THREATS Threats are unfavourable external factors or trends that may present challenges to performance.

CONCLUSION By keenly analyzing the marketing of UFone, we group member agree that Ufone is not a safe player in the market. It is penetrating its market by taking risks and aggressively promoting and advertising itself. It holds second largest market share and is seeking to become the market leader anyway possible. We came through very unconventional strategies and ad-campaigns while working on this report. We believe that mobile services are the toughest market to enter and survive. And iun this tough market UFone isnt only surviving but grouwing at an exceptional rate. Ufone is using humorous theme in its adds. Which has become its benchmark. People enjoy watching, discussing and following Ufone ads the most. And it is the biggest achievement of Ufone in recent times. We wish a very best of luck to Ufone. May it progress in this field and achieve its desired goals (AMEEN).