1

Atikur Rahman
Senior Lecturer

MBA (HRM), BBA (MGTS), RU

Department of Business Administration
Faculty of Business Studies, PCIU
 Define Decision Making

Decision making in management is the process of making a choice

between two or more options. This involves evaluating the pros and
cons of various choices and choosing the best option to achieve a
desired outcome. In management, decision making is about acting in a
way that meets organizational goals and objectives.

For example, a business manager may decide to invest in marketing to

attract new customers. This decision could involve analyzing the costs,
benefits, and risks involved with each possible course of action and
choosing the best course of action for the organization.
 Characteristics of Decision
1. Making
Rational-thinking: Rational thinking is a process in managerial
decision making that helps us to make sound decisions. It involves
systematically analyzing options and choosing the best course of action
based on logic and evidence. To think rationally, we must first identify
our goals and objectives.

2. Process: Many people view decision making as a cold, rational

process. However, there is much more to it than simply choosing the
most logical option. In reality, decision making is influenced by a variety
of factors, both conscious and unconscious. For example, our emotions
play a role in the decisions we make, as do our personal values and
beliefs.

3. Selective: A key characteristic of managerial decision making is that

it is selective. That is, deciding involves picking the best options. There
are many factors that influence what gets selected, including the clarity
 Characteristics of Decision
4. Making
Purposive: A purposive approach to decision making is one that is
based on the specific goals and objectives of the individual or
organization. This type of decision making takes into account the
desired outcome of the decision, and considers all of the available
options in order to select the best possible course of action.

5. Positive: Decision making process in management is an essential

skill in any area of life, whether you're choosing what to eat for lunch or
deciding which company to work for. While there are many different
approaches to decision making, there are some common characteristics
that tend to lead to positive outcomes.
 Characteristics of Decision
6. Commitment: If you wantMaking
to make successful decisions, it is crucial
that you have commitment. This means having the drive to see the
decision through, even when it gets tough. It also means being able to
defend your decision to others, even if they do not agree with you.

7. Evaluation: Evaluation is a key characteristic of good decision

making. This involves considering all of the options and weighing their
pros and cons before making a choice. It is important to be as objective
as possible when evaluating the different options, and to look at the
situation from all angles.
 Decision Making Process
1. Establishing Objectives: Establishing objectives is among the
crucial decision making steps in management. Without clear
objectives, it can be difficult to make effective decisions that will help
the organization meet its goals. Establishing objectives involves setting
specific goals that need to be achieved within a certain timeframe.

For example, if you are the CEO of an e-commerce start-up with your
business expanding, you would want to hire the right employees for
various roles. Firstly, you would have to establish your objectives
regarding which parts of your business you would need to hire new
people.
 Decision Making Process
2. Identify the Decision: The next important step in the decision
making process in management is identifying the problem that
needs to be addressed. Once the problem has been identified, the
manager will gather information about possible solutions. This may
involve consulting with others, doing research, or running simulations.
After weighing the pros and cons of each option, the manager will
choose the course of action that they believe is most likely to succeed.

For example, after establishing the objectives regarding which parts of

your business need new recruits, you would have to identify the course
of action with others to recruit the ideal employees for the various job
roles.
 Decision Making Process
3. Gather Appropriate Information: This process of gathering
information is known as information gathering. The different sources of
information that managers can use include surveys, interviews, focus
groups, observation, and secondary data sources such as articles and
reports. After gathering this information, managers must then analyze it
to determine which option is best.

For example, after identifying the course of action for the new recruits,
you, along with your team, have to gather proper information about the
various hiring trends and how to recruit the ideal talents.
 Decision Making Process
4. Identify the Alternatives: One of the most important aspects of
the decision-making process in management is identifying the
alternatives. Without knowing what your options are, it can be difficult
to make an informed decision. There are a number of different ways to
identify the alternatives, but some of the most common methods
include brainstorming, research, and consultation.

For example, after gathering the appropriate information on how to

recruit the ideal talents, identify what alternatives you can offer to
attract talents. Like can you offer remote working or a hybrid working
model?
 Decision Making Process
5. Choose Among the Alternatives: One of the most important
decisions that a manager has to make is which alternative to choose.
There are multiple ways to approach this, such as by first considering all
available alternatives, then assessing each against an explicit set of
criteria. Finally, choosing one alternative over another could depend on
other factors such as political considerations and the influence of
stakeholders.

For example, after considering all the alternatives and research

regarding hiring new recruits, choose the alternative which is the most
profitable for your business.
 Decision Making Process
6. Take Action: There are many approaches to decision making, but
one of the most popular is the "take action" approach. This approach
involves taking decisive action in response to a problem, without
overthinking or second-guessing yourself. While this approach can lead
to quick results, it also carries the risk of making impulsive decisions
that may not be in the best interest of the company.

For example, after choosing the most profitable ways to hire new
talents, take the course of action of searching and interviewing the
individuals.

7. Review the Decision: Finally, after a decision has been made, it is

important to review the results and make any necessary adjustments.

For example, after hiring the new recruits, review the whole process to
see where you can make some changes to make the process more
 Types of Decision Making
Programmed and Non-Programmed Decision-making: Non-
programmed decisions making in operation management are unique
and not repetitive. Typically, they are made in response to an
unforeseen event or opportunity. Programmed decisions, on the other
hand, are routine and often based on established rules or procedures.
Because they are more predictable, programmed decisions are typically
less risky and easier to make. However, non-programmed decisions
often require more creativity and judgment, and can be more difficult to
reverse if they turn out to be wrong.

Planned and Unplanned Decision-making: There are two types of

decision making in management: planned and unplanned. Planned
decisions are those that are made in advance, after considering all the
options and their possible outcomes. Unplanned decisions, on the other
hand, are those that are made on the spot, without any prior
consideration. Both types of decision making in management have their
 Decision Making Conditions
Managers make several decisions during the course of business
activities. Sometimes they are sure about the future conditions but
sometimes they have difficulty estimating the future conditions. It is
important for the manager to know in which condition the decision is to
be made. A decision made relating to the situation helps to adjust to
that situation. There are three conditions of decision-making. They are:

• Certainty
• Risk
• Uncertainty
 Decision Making Conditions
Condition of Certainty: Certainty condition of decision making is a
situation where a decision-maker is conformed to what will happen when
a decision is being made. It is a condition where the future is 100
percent sure. The future situation is conformed because of the
availability of reliable information and their cause and effect are known.
Due to known conditions, there are no conflicts in decision-making.
Similarly, it saves time in decision-making.

As we know, to make a decision we choose the best course of action

from available alternatives. Here one best alternative is selected and its
outcomes are also known which provides the optimum outcomes. This
condition exists in routine decisions such as day-to-day activities,
payment of wages, salaries, etc. Another example is when a person is
going to buy a car, he can collect all the relevant information about that
car, and he gets confirmed what type of car he is buying.
 Decision Making Conditions
Condition of Risk: In the condition of risk, the decision-maker is aware
of alternatives but not of their outcomes or consequences. Here the
future condition can not be estimated correctly. It is a condition where
the future is sure but less than 100 percent. There are chances of both
conditions either the decision which is made leads to success or leads to
failure. In other words, there is a 50/50 between success and failure.

Due to the incomplete information, it is difficult to predict future

conditions for the manager. So to get full information he can collect the
required information through research, knowledge, experience, and
other available information. After collecting the information it can be
analyzed through judgment and statistical analysis and the alternative
which has the highest expected outcome can be selected.
 Decision Making Conditions
Condition of Uncertainty: Uncertainty is a situation where the
decision-maker has very little information available about the
alternatives. Which is not enough to take an action plan. Due to the
unavailable information, the manager is unaware of the situation he is
facing, he is unknown of the consequences associated with the
alternatives. Uncertainty arises due to lack of information, the
introduction of a new product or service, adoption of new technology,
etc. It creates difficult to understand the environment, predict the future
and make a decision.

Thus to make a good decision a manager must collect the relevant

information as much as possible. Because of not enough information
statistical analysis is not possible here. Qualitative tools such as
judgment, intuition, and experience play a vital role in the collection of
information in an uncertain situation.