DECISION MAKING- DECENTRALIZATION BASIC GOALS OF

DECENTRALIZATION.

Definition

Decision making is a systematic process of choosing among alternatives and putting the choice
in to action. -Lancaster and Lancaster

Decision making is a necessary component of leadership, power, influence, authority and

delegations. -John 1993

TYPES OF DECISION MAKING

There are 4 managerial decisions

a. Mechanistic decision

b. Analytical decision

c. Judgmental decision

d. Adoptive decision

Mechanistic decision

 Routine and repetitive in nature

 It usually occurs in a situation involving a limited number of decision variables where the
outcome of each alternative is known.
 Tools used for these kinds of decisions are charts, list, decision tree etc.

Analytical decision

 This decision helps to solve the complex problems.

 It involves a problem with a large number of decision variables where the outcome of
each decision alternatives can be computed.
 Computational techniques involve linear programming and statistical analysis.

Judgmental decision
  Decision involves a problem with a limited number of decision variables but the out of
the decision alternatives are unknown.
 These types of decision are useful in marketing investment and to solve the personal
problems.

Adaptive decision

 Decisions involving a problem with a large number of decision variables where outcomes
are not predictable.
 Such ill structured problems require contribution of many people with diverse technical
background. Eg. Research finding.

1. Nursing Administration decision making

According to Ann Bill Taylor

a. Non routine decision: made by directors of nursing. The out of the problem will be
unpredictable. Eg. Changing ways of organizing for the delivery of nursing care.

b. Routine decision: Routine decision: made by mid level and low level managers, the outcome
will be predictable. Eg. Assigning the duty roster, assign the security laws.

Generally decisions are broadly divided into two categories:

1. Typical, routine, unimportant decisions

2. Important, vital or strategic decisions

Routine decisions: Involve no extraordinary judgment, analysis and authority, since they are
dealing with less important problems. Routine decisions demand power to select the shortest
path, within the given means and ends.

Strategic decisions: Aim at determining or changing the means and ends of the enterprise. They
require a thorough study, analysis and reflective thinking on the part of administrators. Strategic
decisions are usually taken by top managers, while routine decisions are made mostly by lower
level managers.
DECISION STRATEGIES

A strategy is an artful or cleaver plan for applying technique in pursuit of a goal. Before
selecting any method of decision manager should adopt a decision strategy. Some strategy suited
for some type of problems than others, they are;

1. Optimizing: It is an approach in which an individual analyze a problem, determines desired

out comes, identifies possible solutions, predict the consequences of each actions, and select the
courses that yields the greatest amount of preferred outcomes.

2. Satisfying: It is an approach, where by an individual chooses a problem solutions, and then

select best of remaining options.

3. Mixed scanning: making a decision that satisfies to remove least promising solutions, and
then select best of remaining options.

4. Opportunistic: making a decision for the solution chosen by problem identifier

5.Do nothing: taking decision after waiting for the storm to pass.

6. Eliminate critical limiting factor: making a decision by removing most powerful obstacle to
success.

7. Maxima: an optimistic approach in which, while assuming the highest possible p ay off from
use of any action the individual chooses that action alternative that will yield the largest pay off.
8. Mini-regret: an approach designed to minimize the surprise resulting from any action
decision by selecting the action alternative that will yield a result midway between the most
desired and the least desired out comes.

9. Precautionary: making a decision by choosing the action that will maximize gain of
minimize loss regardless of opponents actions. It is useful when the manager engaged in a zero
sum conflict with another.

10. Evolutionary: while taking a decision individual has to make series of small changes leading
towards goal. It is based on the assumption that subordinates can better adjust to series of small
changes than a quantum leap.
11. Chameleon: taking a decision by making vague plan, adjusted to changing circumstances. It
consists of farming management decision in general terms, so that they can be interpreted,
differently at different times.

TIME AND BASIS FOR DECISION MAKING

There are six important bases for decision making which are referred to as aids to decision
making and they include experience, authority, facts, intuition, research, analysis and
experimentation.

1. Experience: Experience is the most important and valued basis for making decisions.
Experience gives the administrator the requisite vision, that trains him to apply his knowledge to
the best of its use and that helps him to recognize the crucial factors from unnecessary details.

2.Authority: Provides an important basis for enabling managers to take quick and sound
decisions.

3. Facts: Provide the solid basis for decision making. Decisions become wrong only when
adequate facts are not available on the problem. The computer technology has been introduced
for supplying greater facts to operating managers.

4. Intuition: It is the residuary basis for covering up deficiencies in other three bases of decision
making. It includes guess work, and common sense views.

5. Research and analysis: These are the most effective basis for choosing among alternatives. It
helps in finding out relationships among the other important variables.

6. Experimentation: This provides another means by which various alternatives can be

evaluated. Since experimentation becomes and expensive basis for decision making in many
cases, it is used sparingly for indicating the best course of actions in problems like policy
formation, product development, introduction of new organizational technique etc.

FACTOR AFFECTING DECISION MAKING

Internal factors

 Decision makers physical and emotional status

  Personal characteristics and values
 Past experience and interest
 Knowledge and Attitude
 Self awareness and courage
 Energy and creativity
 Resistance to change
 Sensitivity and flexibility

External factors

 Cultural environment
 Philosophical environment
 Social back ground
 Time Poor communication
 Cooperation
 Coordination

STEPS IN DECISION MAKING

1. Making the diagnosis

2. Analysing the problem

3. Searching alternative solutions

4. Selecting best possible solution

5. Putting the decision into effect

6. Following up the decision

1. Making the diagnosis The first step is to determine what the real problem is?. If the problem
is not ascertained correctly at the beginning, money and effort spent on the decision making will
be a waste. The original situation will not come under control. But new problems will start from
this incorrect appraisal of the situation.
2. Analyzing the problem The problem should be thoroughly analysed to find out adequate
background information and data relating to the situation. This analysis may provide the manager
with some revealing circumstances that will help him to gain an insight into the problem. The
whole approach should be based around the important factors. Only pertinent and closely
connected factors are selected, as dictated by the principle of the limiting or strategic factor.

3. Searching alternative solution After anodizing the problem attempts are made to find
alternative solutions to the problem. In the absence of alternatives decision making process will
become.

4. Selecting best possible solution :Selection of one best course of action among the several
alternatives developed; require an ability to draw distinctions between tangible and intangible
factors as well as facts and guesses.

The four criteria have been suggested by Dracker in selecting the best solution.

1. Proportion of risk to the expected gain.

2. Relevance between the economy of effort and the possibility of results.

3. The time considerations that meet the needs of the situation.

4. The limitation of recourses. Instead of picking the best solution managers have to really on a
course of action that is satisfactory enough under the existing circumstances and limitations.

5. Putting the decision in to effort :The decisions can be made effective through the action of
other people. In order to overcome the opposing on the part of employee‘s managers can make
three important preparations.

a. Communication of decisions

b. Securing employee acceptance

c. The timing of decisions

6. Follow up the decision :As a safe guard against the incorrect decisions managers are required
to a system of follow up care of the decisions so as to modify them at the earliest.
DECISION MAKING AUTHORITIES

1. Individual

2. Group

3. Committees

Individuals as decision makers

The autocratic manager‘s fears that decisions made by others may be more costly, less
effective and represents a threat to his/ her position.

There are mainly 3 behavioural characteristics that influence the decision making.

 Perception of the problem: it is affected by ones previous experience and value system.
 Personal value system: basic convictions about what is right, good or desirable
 . The role theory: it predicts how actions will be performed in certain roles and how it
will be affected certain circumstances. Specific behaviour associated with position
constitutes roles.

Group factors in decision making

Group comprises two or more people who share common interest and come together to
accomplish an activity through face to face interaction. Commitment to the decision and to the
implementation is important and may be increased by participation in the decision making
process.

Committee Aspects in Decision Making

A committee a group of people chosen to deal with a particular topic or problem. It can be
formal or informal committee. A committee appointed to collect data analyze finding make
recommendations is an ‗ad hoc committee‘.
MODELS OF DECISION MAKING

1. The Normative Model

2. The Decision Tree Model

3. The Descriptive Model

4. The Strategic Model

5. Optimizing Model

6. Satisfying Model

1. The Normative Model

This model is at least 200 years old. It is assumed to maximize satisfaction and fulfils the
―perfect knowledge assumption‖ that‖ in any given situation calling for a decision, all possible
choices and the consequences and potential outcome of each are known.

Seven steps are identified in this analytically precise model:

a. Define and analyze the problem.

b. Identify all available alternatives.

c. Evaluate the pros and cons of each alternative.

d. Rank the alternatives.

e. Select the alternative that maximizes satisfaction.

f. Implement.

g. Follow up.

The normative model for decision making is unrealistic because of its assumption that there are
clear-cut choices between identified alternatives.
Vroan and Yelton‟s Normative Model

They define decision making as a social process and emphasis how mangers work rather than
should behave in their normative way. It is used when information is rather than should behave
in their normative way. It is used when information is objective, the problem is structured or
routine, and options are known and predictable.

They identified 5 alternative decision making process:

 Autocratic
 C – Consultative
 G – Group
 I – First variant
 II – Second variant
 AI – making decision by yourself using information available to you at that time.
 AII – obtain necessary information from your subordinates then decide on a solution to
your problem. But subordinates will be unaware about the problem.
 CI - shares the problem with subordinates individually, and gets their ideas and
suggestions. Then you make a decision that may or may not reflect your subordinates
influence.
 CII- you share the problem with subordinates as a group, together you generate and
evaluate alternatives and attempt to reach agreement on a solution. You do not try to
influence the group to adopt your solutions but are willing to accept and to implement
any solution that has the support of the entire topic.
 GI – is applicable only in more comprehensive models.

2. The Decision Tree Model

Various adaptations of decision tree analysis are found in the literature; the essential
elements described in the 1960s are standard. All factors considered important to a decision can
be represented on a decision tree. Vroom arranged answers to seven diagnostic questions in the
form of a decision tree to identify types of leadership style used in management decision making
models. The questions focus on protecting the quality and acceptance of the decision and deal
with adequacy of information, goal congruence, structure of the problem, acceptance by
subordinates, conflict, fairness, and priority for implementation.

Magee and Brown depict decision trees as starting with a basic problem and use branches
to represent ―event forks‖ and ―action forks.‖ The number of branches at each fork corresponds
to the number of identified alternatives. Every path through the tree corresponds to a possible
sequence of actions events, each with its own distinct consequences. Probabilities of both
Positive and negative consequences of each action and event are estimated and recorded on the
appropriate branch. A1 A2 A3 Alternatives A4 Chance events Probable consequences

3. The Descriptive Model

Simon developed the descriptive model based on the assumption that the decision maker is a
rational person looking for acceptable solutions based on known information. This model allows
for the fact that many decisions are made with incomplete information because of time, money,
or people limitations, and the cause of time, money, or people limitations, and the fact that
people do not always make the best choices. Simon wrote that few decisions would ever be made
if we always sought optimal solutions.

Instead, he contended, we identify acceptable alternatives. Steps in the descriptive model are as
follows:

a. Establish acceptable goal.

b. Define subjective perceptions of the problem.

c. Identify acceptable alternatives.

d. Evaluate each alternative.

e. Select alternative.

f. Implement decision.

g. Follow up
4. The Strategic Model

Strategic decision making usually relates to long-range planning. As an example, hospitals

are beginning to merge, and certainly nursing departments will be affected. Among the decisions
that will be made are the need for one top manager or department head versus two or more,
whether to decentralize and eliminate middle managers, and what maximize the use of scarce
resources and provide for their efficient use.

Nagelkerk and Henry used a model designed by Mintzberg, Raisinghani, and Teoret (the
MRT model) to design and test the nature of strategic decision making that entailed substantial
risk. They worked with chief nurse executives employed in six acute care hospitals with 400 or
more beds each.

5. Optimizing Model

Decision maker select the solution that maximally meet the objective for a decision.
Usually this process involves assessing the pros and cons of each known outcomes as well as
listing benefits and costs associated with each option. The goal is to select the most ideal
solution. This process is most expedient and may be the most appropriate when time is an issue.

6. Satisfying Model

Decision maker selects the solution that minimally meets the objective for a decision. It is
more conservative method compared to an optimizing approach. This process is most expedient
and may be the most appropriate when time is an issue.

TOOL OF DECISION MAKING

1. Judgemental technique

2. Operational research technique

3. Delphi technique

4. Decision tree

1. Judgmental technique
a) This is the oldest technique and subjective in decision making.

b) Based on past experience and intuition about future.

c)Useful in making routine decision.

d) Cheap and not time consuming.

e) Hazardous due to a chance for taking wrong decision.

f) Rarely used in large capital commitments.

2. Operational Research Technique (OR) It can be defined as the analysis of decision problem
using scientific method to provide manager the needed quantitative information in making
decision.

a) Operational research makes the decision analytic, objective and quantitative based.

. Types of Operational Research Technique

1. Linear programming: Uses linear mathematical equations to determine the best way to use
limited resources to achieve maximum results. This technique is based on the assumption that a
linear relationship exists between the variables and the limits of variation can be calculated.
Linear programming is a sophisticated short cut technique in which computers can be used.

2. Queuing theory: It deals with waiting lines or intermittent servicing problems. It balances the
cost of waiting versus the prevention of waiting by increasing the services. A group of items
waiting to receive service is known as a ‗queue‘. By decreasing or eliminating the waiting line to
reduce waiting line cost, there is an increase in cost of labor and physical facilities.

3. Games theory: In normal games, each player or group of player tries to choose a course of
action which will frustrate opponent‘s action and help in winning the game. The same will apply
in the context of business by maximize his loss.

4. Programme evaluation and review technique (PERT): PERT is a network system model
for planning and control under certain conditions.
It involves identifying the key activates in a project, sequencing the activities in a flow diagram,
and assessing the duration for each phase of work. a. It is appropriate for project work that
involves extensive research and development. b. Helps to predict time. c. Helps to determine
priorities. d. Use of recourses can be considered when setting priorities. e. Assignment can be
changes temporarily. f. Overtime or temporary help can be given to facilitate the activity flow. g.
Can manipulate the time required to move from one event to another.

5. Critical path method (CPM): Closely related to PERT. Critical path method calculates a
single time estimate for each activity, the longest possible time. CPM is useful where the cost is
a significant factor.

6.Computers in decision making: In management information system computers can be used

for various activities like patient classification system, supplies and material management
system, staff scheduling, policy and procedure changes and announcements, patient charges,
budget information and management, personal records, statistical reports, administrative reports
and memos etc.

3. Delphi technique It allows members who are dispersed over a geographic area to participate
in decision making without meeting face to face. This is possible through the use of
questionnaire. The members will return the questionnaires anonymously; the results of the first
questionnaire are centrally compiled and sent to each member.

4. Decision trees: A decision tree is a graphic method that can help the supervisor in visualizing
the alternatives available, outcomes, risk and information needs for a specific problem over a
period of time. It helps to see the possible directions that actions may take from each decision
point and to evaluate the consequences of a series of decisions.

DECENTRALIZATION

INTRODUCTION

Decentralization is the division of activities by forming departments. In nursing service,

departmentalization aims on attaining a better quality of patient care through benefits derived
from specialist nurses. Departmentalization aims to provide better arrangements, control of
facilities, equipments and materials required to perform the necessary service. The nursing
service administrator should explicitly define the standards, policies, and scope of decision to be
undertaken by top administration and those to be handled by departments and their subunits.
Decentralization versus Centralization

The term centralized and decentralized refer to the degree to which an organization has spread its
lines of authority, power, and communication. The centralization tends to concentrate decision
making at the top level of the organization, whereas decentralization disperses decision making
and authority throughout decision making and authority throughout and further down the
organizational hierarchy. The centralization and decentralization can be thought of as two
theoretical extremes of one continuum. In other words the decentralization is the extent of
authority is passed down to lower levels in the organization. The centralization is the extent to
which authority is retained at the top of the organization.

Definition of decentralization

Decentralization is the dispersion or delegation of responsibilities and the authority to lower

levels of an organization. Institution makes use of both centralization & decentralization. Top
management needs a positive attitude towards decentralization and they need competent personal
to whom they can delegate authority.

Decentralized structure

The decentralized structure is flat in nature and organizational power is spread out throughout
the structure. These are few layers in the reporting structure, and managers have a broad span of
control. Communication patterns are simplified and problems tend to be addressed with ease and
efficiency at the level at which they occur

CONCEPTS OF MANAGEMENT

Definition

." Management is principally the task of planning, coordinating, motivating, and controlling
the efforts of others towards a specific objective. -James lundy 1963
THE CONCEPT OF MANAGEMENT

The concept of management is not fixed. It has changing according to time and
circumstances. The concept of management has been used in integration and authority etc. The
concept of management. The concept of management is not fixed. It has changing according to
time and circumstances. The concept of management has been used in integration and authority
etc.

Different authors on management have given different concepts of management. The main
concepts of management are as follows:

Functional Concept: According to this concept 'management is what a manager does'. The man
followers of this concept are Louis Allen, George R. Terry, Henry Fayol, E.F.L. Brech, James L.
Lundy, Koontz and O. Donnel, G.E Milward, mcfarland etc. The functional concept as given by
some of the authors is given below:

I.Louis Allen, "Management is what a manager does.

II. James L. Lundy, " Management is principally the task of planning, coordinating, motivating
and controlling the effort of others towards a specific objective. Management is what
management does. It is the task of planning, executing and controlling."

III. George R. Terry, "Management is a distinct process consisting of planning, organizing,

activating and controlling performed to determine and accomplish the objective by the use of
human beings and other resources."

IV. Howard M. Carlisle, "Management is defined as the process by which the elements of a
group are integrated, coordinated and/or utilized so as to effectively and efficiently achieve
organizational objectives."

V. Henry Fayol, "To manage is to forecast, and plan, to organize, to command, to coordinate
and to control."
GETTING THINGS DONE THROUGH OTHERS' CONCEPT:

According to this concept, 'Management is the art of getting things done through others'.
It is very narrow and traditional concept of management.

The followers of this concept are Koontz and O Donnell, Mooney and Railey, Lawrence A.
Appley, S. George, Mary Parker Follet etc.

Under this concept, the workers are treated as a factor of production only and the work of
the manager is confined to taking work from the workers.

He need not do any work himself. Modern management experts do not agree with this
concept of management. Some of these authors have explained this concept in the following
words:

 Mary Parker Follet, "Management is the art of getting things done through others."
 Harold Koontz, "Management is the art of getting things done through and wit people in
formally organized groups. It is the art of creating and environment in which people can
perform as individuals and yet cooperate towards attaining of group goals.
 . J.D. Mooney and A.C. Railey, "Management is the art of directing and inspiring
people."

Leadership and Decision-making Concept:

According to this concept, "management is an art and science of decision-making and

leadership." Most of the time of managers is consumed in taking decisions. Achievement of
objects depends on the quality of decisions. Similarly, production and productivity both can
be increased by efficient leadership only. Leadership provides efficiency, coordination and
continuity in an organization.

Leadership and decision-making concept as given by some authors is given below:

I. Donald J. Clough, "Management is the art and science of decision-making and

leadership".
II. Ralph, C. Davix, "Management is the function of executive leadership anywhere."
 III. Association of Mechanical Engineers, U.S.A., "Management is the art and science of
preparing, organizing and directing human efforts applied to control the forces and
utilize the materials of nature for the benefit to man."
IV. F.W. Taylor, "Management implies substitution of exact scientific investigation and
knowledge for the old individual judgment or opinion, in all matters in the
establishment."

Productivity Concept:

According to this concept, "management is an art of increasing productivity." Economists

treat management as an important factor of production. According to them, "Management is also
a factor of production like land, labor, capital and enterprise."

The main followers of this concept of management are John F. Mee, Marry Cushing Niles, F.W.
Taylor etc. The productivity concept, as given by the authors is given below:

I. Jon, F. Mee, "Management may be defined as the art of securing maximum prosperity
with a minimum of effort so as to secure maximum prosperity and happiness for both
employer and employee and give the public the best possible service."
II. F. W. Taylor, "Management is the art of knowing what you want to do in the best
and cheapest way."
III. . Marry Cushing Niles, "Good management achieves a social objectives with the best
use of human and material energy and time and with satisfaction of the participants
and the public.

Universality Concept:

According to this concept, "Management is universal". Management is universal in the sense that
it is applicable anywhere whether social, religious or business and industrial.

The followers of this concept are Henry Fayol, Lawrence A. Appley, F.W. Taylor, Theo
Haimann etc. According to

 Henry Fayol, "Management is an universal activity which is equally applicable in all

types of organization whether social, religious or business and industrial".
 Megginson, "Management is management, whether it is in Lisbon, or in London or in Los
Angeles."
 Theo Haimann, "Management principles are universal. It may be applied to any kind of
enterprises, where the human efforts are coordinated