DECISION-MAKING

Presented by: Group no. - 3

WHAT IS DECISION-MAKING?
 Decision making is a matter of planning organisational
objectives and the steps that will be used to achieve
them. It is a part of every manager’s job because he
must constantly choose what is to be done, who is to
do it, and when is to be done.
 It must be regarded as a step in planning, even when
done quickly and with little thought or when it
influences actions only for a few minutes.
DEFINITION OF DECISION-
MAKING

 According to George R. Terry, “Decision making is the

selection based on some criteria from two or more
possible alternatives”.

 According to Stephen P. Robbins, “decision making is

defined as the selection of a preferred course of action
from two or more alternatives.”
TYPES OF DECISION-MAKING
There are 5 types of decisions discussed below:

policy and organizational

routine and operating and personal
strategic decisions decisions decisions

programmed and
individual and
non-programmed
group decisions
decisions
ROUTINE AND STRATEGIC
DECISIONS
 Routine decisions are made repetitively following
certain established rules, procedures and policies. They
do not require any special effort by the manager and
can be taken by the managers at middle level and lower
level management.
 On the other hand, strategic decisions relate to policy
matters. They require a through fact finding and
analysis of the possible alternatives. Finding the
correct problem in such decisions. The managers are
more concerned about the decisions as they influence
decision making at the lower level.
POLICY AND OPERATING
DECISIONS
 Policy decisions are of vital importance and are taken
by the top management as these decisions affect the
entire enterprise.

 On the other hand, operating decisions are taken by

the lower management in order to put into actions the
policy decisions. For example, the bonus issue is a
policy is an operating decision taken at lower levels.
ORGANIZATIONAL AND
PERSONAL DECISION

 Organizational decisions are those which a manager

takes in his official capacity and can be delegated.

 But personal decisions relate to the manager as an

individual and not as a member of the organization and
cannot be delegated.
PROGRAMMED AND NON-
PROGRAMMED DECISIONS

 The programmed decisions are of routine and

repetitive nature which are dealt according to specific
procedures.
 For example, if an employee absents himself from the
work without any intimation, the supervisor need not
refer this matter to chief executive as he can deal it
with the employee according to a standard procedure.
 The non-programmed decisions arise because of
unstructured problems and there is no standard
procedure for handling such problems. It requires
thorough study of the problem and scientific analysis
of the situational factors.
 For instance, if number of employees absent
themselves from the work without any intimation, such
a problem and decision should be taken by the chief
executive.
INDIVIDUAL AND GROUP
DECISIONS

 When a decision is taken by an individual in the

organisation, it is known as individual decision. Such
decisions are taken in small organizations.

 Group or collective decisions refer to those decisions

which are taken by a group of organizational members,
like board of directors or a committee.
IMPORTANCE OF DECISION-
MAKING

• Implementation of managerial function

• Pervasiveness
• Evaluation of managerial performance
• Helpful in planning and policies
• Selection of best alternatives
• Successful operation of business
STEPS IN DECISION-MAKING
Steps involved in decision-making are discussed as:
1. Identification of the problem
2. Analyzing the problem

3. Collection of data
4. Developing alternatives

5. Selecting the best alternative

6. Putting the decision into practice

7. Follow-up
8. feedback
APPROACHES
There are 4 types of approaches:

1. Logical system approach

2. Quantitative approach
3. Contingency approach
4. Qualitative approach
THANK YOU