Volume : 2/ Issue :1/ Jan- June 2013
REVIEW ARTICAL
Management Sciences
DECISION MAKING TECHNIQUES
BH.Srinivas Reddy*
eddy MHM Course Co
Co-ordinator,
ordinator, Department of Hospital Administration,
*BH.Srinivas Reddy
Narayana Medical College & Hospital, Nellore, AP-India.
Email id: [email protected]
Abstract
Management spend a great deal of time in making decision that must be carried out in
several ways.. An executive is a man who decides; sometimes he decides right, but always he
decides” Decision-Making
Making is a part of daily routine of everyone. Managers are no exception.
Decision making is an integral part of every manager’s working
wor
life. Decision making is an
indispensible component of management process and managers life is filled with making
decisions after decisions. Managers see decision making as their central job because of they
constantly choose What is to be done, Who is to do, When to do, Where to do, and How to
do. Looking at the role of decision making in management by decision making techniques.
Key words: Decision Making, Indispensible Component, Right decision.
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Volume : 2/ Issue :1/ Jan- June 2013
“The scars of others should teach us caution” –St.Jerome, Religious leader
“It is not that they con’t see the solution. It is that they con’t see the problem”-Charles
F.Kettering.writer
Introduction
Decision
making
is
managerial
2. Managers are evaluated on the basis
function and organizational process. It is
of quality of their decision making.
managerial because it is a fundamental
To improve the quality of decisions,
responsibility of every manager. It is
they should know how quality of
organizational
decision making can be improved. “2
process
both
because
many
decisions transcend the individual managers
and become the product of groups, teams,
committees etc.
William
more
management
“A decision reports a judgement; a final
resolution of a conflict of needs, means or
goals and a commitment to action made in
has
when
equated
he
it
with
face of uncertainty complexity and even
says
that
irritationally” 3
“Management Means Decision Making”1
Decision making is a conscious human
In fact, more important decisions are made
process involving both individual and social
by group of managers. Managers should
phenomenon based up on factual and value
develop decision making skills and acquaint
premises which concludes with a choice of
themselves with the dynamics of decision
one behavioral activity from among one or
making because of the following reasons
more alternatives with the intention of
1. Managers spend a great deal of their
moving towards some desired state of affairs
4
time in making decision on order to
develop their decision making skills,
Meaning of Decision: A Decision is a
it is necessary that they know how to
choice between more alternatives. This
make effective decisions
implies things
1) When managers make decisions they
are choosing they are deciding what
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Volume : 2/ Issue :1/ Jan- June 2013
to do on the basis of some conscious
which means a cutting away or a cutting off,
and deliberate logic or judgement.
or in a practical sense.6
2) Managers have alternatives available
when there are making a decision. It
does not require a wise managers to
reach a decision when there are no
other possible choices. It does
require wisdom and experience to
Herbert Simon has grouped organisational
decisions into two categories based on the
decision factors which are taken into
consideration.7
1. Programmed and Non programmed
decisions
evaluate several alternatives and
select the best one.
2. Strategic and tactical decisions
3) Managers have purpose in mind
when they make a decision. There
PROGRAMMED
would be no reason for care fully
PROGRAMMED DECISIONS:
making choice among alternatives
(i)
&
NON
Programmed decisions
unless the decision brings them
closer to some goal. 5
Programmed decisions are routine
and repetitive and are made within
Managers spend a great deal of their time in
making decision in order to develop their
the framework of organisational
policies and rules.
decision making skills, it is necessary that
they know how to make effective decisions
The policies and rules are established
well in advance to solve recurring
Decision making is an essential part of
problems in the organisation.
modern Management. Decision making is
thus a key part of a manager’s activities. It
Ex – the problem relating to promotion of
permeates through all managerial functions
employees is solved by promoting those
such as planning, organization, direction and
employees who meet promotion criteria.
control.
It is essential to go through the concept of
(ii) Non programmed decisions
decision making. The word ‘decision’ has
been derived from the latin word ‘decidere’
Non -programmed decisions are
relevant for solving unique/unusual
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Volume : 2/ Issue :1/ Jan- June 2013
various
A strategic decision may involve
alternatives cannot be decided in
major departure from earlier ones
advance
concerning
problems
in
which
For such decisions, the situations is
some
organisational
practices
not well structured and the outcomes
Ex - Change in product mix, expansion of
of various alternatives cannot be
business,change in personnel, policies,etc.
arranged in advance.
Tactical decisions
Ex- if an organisation wants to take actions
for growth, it may have several alternative
routes like going for grass –root project or
Tactical or operational decision is
derived out of strategic decision.
It relates to day-to-day working of
taking over an existing company.
the organisation and is made in the
STRATEGIC
&
TACTICAL
DECISIONS
procedures.
Organisational decisions are clarified as
strategic and tactical
strategic decision
concept is based on strategy which is a
major action plan in an organization.
Strategic decision is a major choice of action
concerning allocation of resources and
to
The various features of a tactical decision
are as follows :
Strategic decision:
contribution
context of well –set policies and
the
achievement
of
organisational objectives.
1. Tactical decision relates to day –today operations of the organisation
and has to be taken very frequently
2. The decision is mostly repetitive
Ex : purchase of raw meterials,assigning
duties to employees,etc.
The decision is a major one which
affects the whole or major part of the
organisation.
It
contributes
achievement
directly
of
to
the
organisational
objectives
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Volume : 2/ Issue :1/ Jan- June 2013
decision should be thought of an
Decision making process
When a manager makes a decision, it
is
in
effect
the
organisation’s
response to a problem.As such
TECHNIQUES
FOR
IMPROVING
means rather than ends. Every
decision is the outcome of a dynamic
process which is influenced by
multiple forces 2
These techniques are brainstorming,
nominal group technique, Delphi
GROUP DECISION MAKING
When posed with the need to solve a
problem or make a decision, a group
has a variety of decision
decision-making
Technique, consensus mapping and
decision tree.
1. BRAINSTORMING
:
techniques ranging from ordinary
Brainstorming is a technique to
group
stimulate
interaction
to
improved
techniques.
Besides ordinary group interaction, a
group can choose out of four
techniques for improving the quality
of information exchanged by group
members in decision making and
facilitate interpersonal interaction.
ideas
generation
for
decision –making
making originally applied
by Osborn in 1938 in an American
company, the technique is now
widely usedd by many companies,
educational institutions and the other
organizations for building ideas.
Osborn has defined brainstorming
simply as using brain to storm the
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Volume : 2/ Issue :1/ Jan- June 2013
problem. Webster dictionary defines
Delphi
brainstorming as
“a conference
making, members do not have face –
technique by which a group attempts
to – face interaction for group
to find a solution for a specific
decision. The decision is arrived at
problem by amassing all the ideas
through written communication in
spontaneously contributed by its
the form of filling up questionnaires
members”.
For
often
group
10-to-15
mail.
decision
In
the
conventional Delphi, a small group
constituted. The participants should
designs a questionnaire which is
be connected with the problem
completed by a larger respondent
directly or closely, through they need
group.
necessarily
be
persons
through
of
is
not
of
Brainstorming, a
technique
from
the
discipline.
4. Consensus Mapping:
Consensus
mapping technique of group decision
2. Nominal
Nominal
Group
group
Technique:
technique
is
–making tries to pool the ideas
a
generated by several task sub groups
structured
group
meeting which
to arrive at a decision. The technique
restricts
verbal
communication
begins after a task group has
among members during the decision
developed, clarified, and evaluated a
–making process. It is meant to
list
resolve differences in group opinion
encourage participants to search for
by having individuals generate and
cluster and categories of ideas. This
then rank a series of ideas in the
search for structure includes the
problem
alternative
listing and discussion of alternative
generation, or choice –making states
clusters and categories by the entire
of group decision –making.
group
exploration,
of
ideas.
or
The
subgroups,
facilitators
and
then
production of a single classification
3. Delphi Technique : The name
Delphi indicates a shrine at which
scheme by group members working
as a group or in pairs or trios.
the ancient Greeks used to pray for
information about the future. In
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Volume : 2/ Issue :1/ Jan- June 2013
5. Decision
tree:
Some
decisions
3. Felix M. Lopez, The making of a
involve a series of steps, the second
manager, Mumbai; Taraporevala,
step depending on the outcome of the
1977.p.73
first, the third depending on the
4. Fremont A.Shull, Andrew L.Delbecq
outcome of the second, and so on.
and larry.L cummings,organization
Often uncertainty surrounds each
step, so the decision maker faces
uncertainty piled on uncertainty.
Decision trees are a model for
solving such a problem. Decision
tree is a graphical method for
identifying
alternative
actions,
estimating
probabilities,
and
Decision making, New York Mc
Grraw-Hill, 1980, p.31
5. Principles
of
PC
Tripathi, P.N.Reddy Tata Me Graw
Hill Publishing company limited
New delhi 2000 p.59-73.
6. Harold Koontz & Heinz Weihrich
indicating the resulting expected pay
Essentials
off.
international
This graphical form visually
Management
of
management
perspective
7
a
th
helps the decision maker view his
edition Tata Mc Graw Hill Publishing
alternatives and outcomes. Instead of
Company Limited
compressing all
the
information
regarding a complex decision into a
7. Herbert
A.Simon,
Administrative
Behaviour, New York.
table, decision maker can draw a
schematic
representation
problem
that
information
in
of
displays
more
the
the
easily
understandable fashion.
References:
1. William M.More, The Professions:
Roles and rules, New York, basic
book,1978.
2. LM Prasad Principles and Practice of
Management
6TH
Edition
2005
p.240-261
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