DECISION MAKING IS TO

SOLVE THE PROBLEMS / ISSUES

 Q?
WHO MAKE DECISIONS IN FORMAL
BUSINESS COMPANIES
•LEADER?
•FOLLOWER?
•ADMINISTRATOR?
•WORKER?
•MANAGER?
A- MANAGER CUM LEADER
Q -ARE YOU QUALIFIED TO

BE CALLED AS A
MANAGER?
 Q ?????
HOW CAN WE MAKE SOUND, INFORMED,
VIABLE AND EFFECTIVE DECISIONS?

DOES THE MANAGEMENRS BEAR THE

CONSEQUENCES / IMPACT / CONSEQUENCES OF
HIS / HER DECISIONS MAKING?
IMPLICATIONS OF DECISION MAKING IN REAL LIFE IN ORGANIZATION
/ ENTERPRISE
“Every manager make decision and every worker follows the decision”

•Every manager work ON – THE – SYSTEM - manager make decisions

•Every worker work IN-THE-SYSTEM – every worker follow the decisions
•Every manager apply managerial functions (planning, organizing…..) on every
SYSTEM of an organization / enterprise
•Every organization / enterprise has its own SYSTEM but their operational model
is the same
Note: 85% OF THE DECISION LIABILITIES GOES TO MANAGEMENT.
 A SYSTEM MODEL
External environment –uncontrolled conditions

PROCESSING /
INPUT OUTPUT
TRANSFORMATION

EVERY MANAGER WORK ON A SYSTEM TO PERFORM

MANAGERIAL FUNCTIONS
 EVERY MANAGERS MAKE DECISION AT EVERY STEP OF
THEIR MANAGERIAL FUNCTIONS

1.PLANNING - MAKE DECISIONS *****

2.ORGANIZING - MAKE DECISIONS
3.STAFFING - MAKE DECISIONS
4.LEADING - MAKE DECISIONS
5.CONTROLLING - MAKE DECISIONS
Note: PLANNING IS THE MOST IMPORTANT AS MOST OF THE DECISIONS
ARE MADE HERE.
A SYSTEM MODEL WHERE MANAGER HAS TO MAKE DECISION
- Applying Managerial Functions to Input of a SYSTEM Model

Planning

Organizing

Staffing

INPUT PROCESSING OUTPUT

Leading

controlling
 A SYSTEM MODEL
- Applying system to Planning Process of Managerial Functions

Planning
Input Output

Organizing

Staffing

INPUT PROCESSING OUTPUT

Leading

controlling
 A SYSTEM MODEL
- Applying system Model to Organizing Process of Managerial Functions

Planning

Organizing
Input Output

Staffing

INPUT PROCESSING OUTPUT

Leading

controlling
 A SYSTEM MODEL
- Applying Managerial Functions to Processing of a system Model

Planning

Organizing

Staffing

INPUT PROCESSING OUTPUT

Leading

controlling
 A SYSTEM MODEL
- Applying system Model to Planning process of a system

Planning
Input Output

Organizing

Staffing

INPUT PROCESSING OUTPUT

Leading

controlling
 A SYSTEM MODEL
- Applying SYSTEM Model to Organizing Process of Managerial Functions

Planning

Organizing
Input Output

Staffing

INPUT PROCESSING OUTPUT

Leading

controlling
 A SYSTEM MODEL
- Applying Managerial Functions to OUTPUT process of SYSTEM Model

Planning

Organizing

Staffing

INPUT PROCESSING OUTPUT

Leading

controlling
 A SYSTEM MODEL
- Applying SYSTEM Model to Planning Process of Managerial Functions

Planning
Input Output

Organizing

Staffing

INPUT PROCESSING OUTPUT

Leading

controlling
 A SYSTEM MODEL
- Applying SYSTEM Model to Planning Process of Managerial Functions

Planning
Input Output

Organizing

Staffing

INPUT PROCESSING OUTPUT

Leading

controlling
 A SYSTEM MODEL
- Applying SYSTEM Model to Planning Process of Managerial Functions

Planning
Output

Input Organizing

Staffing

INPUT PROCESSING OUTPUT

Leading

controlling
APPLYING SYSTEM MODEL AND MANAGERIAL FUNCTIONS TO ALL TYPES OF INDUSTRIES

Planning
Input Output

Organizing

Staffing

Secondary Tertiary
Primary Industries
Industries
Industries
Leading

controlling

All business are linked together and work in tandem.

Each one is dependent and useful for other
APPLYING SYSTEM MODEL AND MANAGERIAL FUNCTIONS TO ALL TYPES OF INDUSTRIES

Planning
Input Output

Organizing

Staffing

Secondary Tertiary
Primary Industries
Industries
Industries Leading

controlling
APPLYING SYSTEM MODEL AND MANAGERIAL FUNCTIONS TO ALL TYPES OF INDUSTRIES

Planning Output
Input

Organizing

Staffing

Secondary Tertiary
Primary Industries
Industries
Industries Leading

controllin
g
DECISION MAKING LEVELS AND TYPES OF DECISIONS

STRATEGIC
TOP LEVEL DECISIONS

TACTICAL DECISIONS
MIDDLE LEVEL

LOWER LEVEL OPERATIONAL DECISIONS

 THE SCOPE AND PLANNING TIME IS LARGER AT STRATEGIC LEVEL, REDUCES AT TACTICAL LEVEL, AND
FURTHER REDUCES AT OPERATIONAL LEVEL. THE STRENGTH IS IN REVERSE ORDER
TYPES OF DECISIONS AND ITS LEVELS
 DECISION MAKING

According to Koontz and O'Donnel, “Decision-making

is the actual selection from among alternatives of a
course of action.”

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

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

CONTINUE
In psychology, “decision-making is regarded as the
cognitive process resulting in the selection of a belief
or a course of action among several possible
alternative options”

CONTINUE
Decision making is the process of making choices by
identifying a decision, gathering information, and assessing
alternative resolutions.
Using a step-by-step decision-making process can help you
make more deliberate, thoughtful decisions by organizing
relevant information and defining alternatives.
This approach increases the chances that you will choose the
CONTINUE
most satisfying alternative possible.
Decision making refers to making choices among
alternative courses of action—which may also
include in-action (that is, taken no action is also
an option of generating an alternatives). While it
can be argued that management is decision
making, half of the decisions made by managers
within organizations fail. (85 % of the
responsibility of a failure go to managers, only
15% is contributed to workers).
CONTINUE
 CHARACTERISTICS OF DECISION-MAKING

1. The manager tries to foresee various possible effects of

a decision before deciding a particular one.

2. It is a process of selecting the best from among

alternatives available.

3. It involves the evaluation of various alternatives

available.
 WHY IS DECISION-MAKING IMPORTANT?

Our daily life decisions give us opportunities to

become better at what we do. Most of our decisions
are made out of habit. However, by bringing our
choices in the conscious domain, we can evaluate
them, assess their impact and indulge in self-
reflection. Such steps eventually lead to better
decisions and outcomes.
 GENERATING ALTERNATIVES
MEN VS WOMEN CAPABILITIES
•WHO GENERATE MORE ALTERNATIVES FOR DECISION MAKING?
•WHO USES MULTIPLES OR SINGLE APPROACH / PROCESSOR TO
MAKE DECISION?
•TELLING DECISION MAKING STORIES OF AN ENGLISH GIRL,
KARAK SINGH AND EX CHIEF JUSTICE OF PAKISTAN????
•IF YOUR DECISION GOES WRONG WHO SHOULD BE BLAMED
•/HELD RESPONSIBLE FOR IT
HOW MANY DECISIONS YOU TAKE PER DAY AND WHAT
ARE ITS LEVELS

STRATEGIC
TOP LEVEL DECISIONS

TACTICAL DECISIONS
MIDDLE LEVEL

LOWER LEVEL OPERATIONAL DECISIONS

 THE SCOPE AND PLANNING TIME IS LARGER AT STRATEGIC LEVEL, REDUCES AT TACTICAL LEVEL, AND
FURTHER REDUCES AT OPERATIONAL LEVEL. THE STRENGTH IS IN REVERSE ORDER
CONSEQUENCES OF A DECISION IN ISLAM
 DECISION MAKING IS FOR FUTURE

Q - CAN THE FUTURE BE PREDICTED PERFECTLY

Q – WHAT IS CALCULATED RISK?

Q – WHAT IS THEORY OF PROBABILITY – HA # 1

DECISION MAKING TREES

CONTINUE
MOST OF THE DECISIONS ARE TAKEN IN PLANNING STAGE OF MANAGERIAL FUNCTIONS. HENCE,
PLANNING SHOULD BE GIVEN TWICE THE TIME OF EXECUTION
RATIONALITY MEAN USING COMMON SENSE, WHICH IS MOSTLY
UNCOMMON
LIMITATIONS, BOUNDS, NON-AVALABILITY, RESTRICTIONS
Decisions are Commonly Made in Real Organizations
FACTORS
ANALYSIS
7 - STEPS IN DECISION MAKING PROCESS

Tore Audun Høie

[email protected]
 7 STEPS OF DECISION MAKING PROCESS
Step 1: Identify the decision???? (aim or purpose). You realize that you
need to make a decision (always for an aim or purpose or objective).
Step 2: Gather relevant information. (scan the environment).
Step 3: Identify the alternatives. (generate the alternative.)
Step 4: Weigh the evidence. (merits and demerits of each option /
alternative).
Step 5: Choose among alternatives. (prioritize the alternatives - till this
point, it is a planning process)
Step 6: Take action. (Implement the plan.)
Step 7: Review your decision & its consequences. (improvement for next
cycle or decision)
Note: planning should take twice the time of implementation)
Step 1: Identify the decision ( problem /issue)
You realize that you need to make a decision. Try to clearly
define the nature of the decision you must make. This first step is
very important.

Step 2: Gather relevant information

Collect some pertinent information before you make your
decision: what information is needed, the best sources of
information, and how to get it. This step involves both internal
and external “work.” Some information is internal: you’ll seek it
through a process of self-assessment. Other information is
external: you’ll find it online, in books, from other people, and
from other sources. CONTINUE
Step 3: Identify the alternatives
As you collect information, you will probably identify several possible paths
of action, or alternatives. You can also use your imagination and additional
information to construct new alternatives. In this step, you will list all possible
and desirable alternatives.

Step 4: Weigh the evidence

Draw on your information and emotions to imagine what it would be like if

you carried out each of the alternatives to the end. Evaluate whether the need
identified in Step 1 would be met or resolved through the use of each
alternative. As you go through this difficult internal process, you’ll begin to
favor certain alternatives: those that seem to have a higher potential (merits)
for reaching your goal. Finally, place the alternatives in a priority order, based
upon your own value system. CONTINUE
Step 5: Choose among alternatives

Once you have weighed (merits and demerits) all the evidence, you
are ready to select the alternative that seems to be best one for you.
You may even choose a combination of alternatives. Your choice in
Step 5 may very likely be the same or similar to the alternative you
placed at the top of your list at the end of Step 4.

Step 6: Take action

You’re now ready to take some positive action by beginning to

implement the alternative you chose in Step 5. (Resources are must
for action) CONTINUE
Step 7: Review your decision & its consequences
In this final step, consider the results of your decision
and evaluate whether or not it has resolved the need
you identified in Step 1. If the decision has not met the
identified need, you may want to repeat certain steps of
the process to make a new decision. For example, you
might want to gather more detailed or somewhat
different information or explore additional alternatives.
Output is compared with inputs
CONTINUE
ANOTHER VIEW OF THE DECISION MAKING PROCESS
THE 4 STYLES (STRATEGIES) OF DECISION MAKING
These are strategies which leaders and individuals employ to make
choices.

1.Analytical
2.Directive
3.Conceptual
4.Behavioural
 1. DIRECTIVE STYLE OF DECISION MAKING

Directive style decision making describes people who

prefer structure and are motivated by the results their
decisions will bring them.
If you are a directive style decision maker, you likely
make decisions quickly and have a "decide and move
forward" mentality. You don't like dwelling in
possibility and prefer to take action.
 2. BEHAVIORAL STYLE OF DECISION MAKING
Behavioral style decision making describes people who prefer structure
and stability and are motivated to maintain harmony.
If you are a behavioral style decision maker, your relationships are
probably the most important thing in your life. You are likely to put the
needs and opinions of family, friends, and colleagues above your own.
It may seem difficult to balance the desire for structure and other
people's thoughts and feelings, but behavioral style decision-makers
accomplish this by seeking input and gauging reactions from people in
the decision-making process.
 3. ANALYTICAL STYLE OF DECISION MAKING

Analytical style decision making describes people who feel comfortable with ambiguity
but are motivated to find the best or most comprehensive solution. If you are an
analytical style decision maker, you likely take a long time to process big life decisions.
Your comfort with ambiguity doesn't mean that you are a risk-taker or would be likely
to decide without knowing how it would work out. That would stress you out a lot!

Instead, your comfort with ambiguity means that you enjoy considering all options
before making a decision. You think of creative solutions and are willing to give most
prospects a chance. However, you only like to move forward once you are as close to
certain as possible that that choice is best.
 4. CONCEPTUAL STYLE OF DECISION MAKING
If you are a conceptual style decision maker, you likely day-dream often and
quickly come up with creative ideas when needed. You see how most things connect
and affect each other. You desire to come up with holistic solutions.
Your comfort in ambiguity helps you to think bigger, and feel more hopeful that
your ideas will work out, than people with other decision-making styles.
Your strengths are recognizing underlying problems and coming up with creative,
integrated options to pursue.
But many conceptual style decision-makers find their weaknesses tend to be taking
action on a decision, adequately planning for what a choice will involve and follow-
through.
 FOUR STAGES OF CREATIVE DECISION
MAKING PROCESS
1. Preparation - experience/ opportunity to
build knowledge base
2. Incubation - reflective, often unconscious
thought
3. Illumination - insight into problem
4. Verification - thinking, sharing, testing the
decision
MAKING CREATIVE DECISIONS
DIMENSIONS OF CREATIVITY