DECISION

MAKING
PRESENTED BY: PRESENTED TO:
EFIGENIA M. DR. NELSON
FONTILLAS NACANA
MAED-EA PROFESSOR
 DECISION

Making a choice
from two or more
alternative.

2
 DECISION
MAKING
“Decision making is the
coherent and rational
process of identifying a
set of feasible alternatives
and choosing a course of
action from them.”
3
 DECISION
MAKING
Continuous process of analyzing
and considering various
alternatives in various situations,
choosing the most appropriate
course of action and following
them up with the necessary actions.

4
 CHARACTERISTICS
1. Decision-making is based on rational
thinking. 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. The selection of best
alternative will be made only when pros and
cons of all of them are discussed and
evaluated. 5
 CHARACTERISTICS
4. Decision-making is the end
product because it is preceded by
discussions and deliberations.
5. Decision-making is aimed to
achieve organizational goals.
6. It also involves certain
commitment. Management is
committed to every decision it 6
 BASIS FOR DECISION-MAKING
1. INTUITION
2. FACTS
3. ECPERIENCE
4. CONSIDERED
OPINIONS
5. OPERATIONS
7
TYPES OF DECISION MAKING
PROGRAMMED DECISIONS

NON-PROGRAMMED DECISIONS

STRATEGIC AND TACTICAL DECISIONS

INDIVIDUAL AND GROUP DECISIONS

8
 PROGRAMMED DECISIONS
Programmed decisions are those that are made
using standard operating procedures or other
well-defined methods. They are situations that
are routine and occur frequently.
Example:
1. Request of leave or permissions by
employees.

9
NON-PROGRAMMED DECISIONS

Non-programmed decisions are unique and one-

shot decisions. They are not as structured as
programmed decisions and are usually tackled
through judgment and creativity.

10
STRATEGIC AND TACTICAL DECISIONS
Strategic decisions relate to policy matters and need the
development and analysis of alternatives. These decisions
influence organizational structure, objectives, working
conditions, finances etc. Strategic decisions exercise great
influence on the functioning and direction of the organization
and have long-term implications.
Tactical decisions are more specific, functional and have
short-term implications. Such decisions are taken by referring
to established rules, procedures and standards.

11
INDIVIDUAL AND GROUP DECISIONS
A decision taken by one person is known as individual decision.
Such decisions are generally taken as per predetermined rules and
procedures and require less application of judgment and skill.
When a manager is required to take a decision, he is supplied with
information and other inputs needed for this purpose.
When decisions are taken by two or more persons, these are known
as group decisions. Generally, strategic or other important
decisions are taken by groups instead of individuals because of risk
involved. The decisions of Board of Directors or Committees come
under this category.

12
FACTORS AFFECTING DECISION MAKING

CERTAINTY

RISK

UNCERTAINTY

13
 CERTAINTY
 Decisions are made under conditions of certainty
when the manager has enough information to know
the outcome of the decision before it is made.
 The manager knows the available alternatives as well
as the conditions and consequences of those actions.
 There is little ambiguity and hence relatively low
possibility of making a bad decision.

14
 Risk
 Most managerial decisions are made under conditions
of risk.
 Decisions are taken in risk when the manager has
some information leading to the decision but does not
know everything and is unsure or unaware of the
consequences.

15
 uncertainty

 Decisions are made under uncertainty when the

probabilities of the results are unknown.
 There is no awareness of all the alternatives and also
the outcomes, even for the known alternatives

16
 Decision Making - Styles
Directive or Autocratic Decision
Making
Analytical Decision Making
Behavioral Decision Making
Conceptual Decision Making

17
ECTIVE OR AUTOCRATIC DECISION MAK

 Managers who follow this style assess few

alternatives and consider limited information while
taking any decision.
 They do not find it important to consult with others or
seek information in any form and use their logic and
idea while taking decisions.

18
ANALYTICAL DECISION MAKING
 Managers using analytic decision-making style would like
to have more information and consider more alternatives
before coming to a conclusion.
 They seek relevant information from their sources and
consider factual and detailed information before taking any
decision. Such managers are careful decision makers as
they have the ability to adapt or cope with unique
situations.

19
BEHAVIORAL DECISION MAKING

 Leaders who follow this model believe in participative

management and consider the achievement of subordinates
and always take suggestions from them
 They try to get inputs from subordinates through meetings
and discussions. They try to avoid/resolve conflicts as
acceptance by others is important to them

20
CONCEPTUAL DECISION MAKING

 Managers using conceptual decision-making style are

intuitive in their thinking and have high tolerance for
ambiguity
 They look at many alternatives and focus on long run
outcomes.

21
DECISION MAKING TOOLS

Decision Trees
Delphi Technique
Payback Analysis

Simulations
22
DECISION TREES
Represented as tree-shaped diagram used to
determine a course of action or show a
statistical probability.

Each branch of the decision tree represents a

possible decision or occurrence.

The tree structure shows how one choice leads

to the next, and the use of branches indicates
that each option is mutually exclusive.

A decision tree can be used by a manager to

graphically represent which actions could be
taken and how these actions relate to future
events.

23
DELPHI TECHNIQUE
It is a group process using written responses to a
series of questionnaires instead of physically
bringing individuals together to make a
decision.

Individuals are required to respond to a set of

multiple questionnaires, with each subsequent
questionnaire built from the information
gathered in the previous one.

The process ends when the group reaches a

consensus.

The responses can be kept anonymous if

required

24
PAYBACK ANALYSIS
 It refers to the period of time required to
recoup the funds expended in an
investment, or to reach the break-even
point.
 It is generally used to evaluate capital-
purchasing alternatives.
 Alternatives are ranked according to the
time each takes to pay back its initial
cost.
 The strategy is to choose the alternative
that has the quickest payback of the
initial cost.

25
SIMULATIONS
It is a widely used technique in operations research.

It models the behavior of individual elements within a

given system.

Methods generally used in simulation are random

sampling to generate realistic variability.

The overall behavior of the system emerges from the

interactions between the elements.

Widely used application areas of the simulation

technique are - logistics and supply chain, service and
operations management, business process
improvement, health and social care information
system, environment, etc.
 

26
 THANK YOU!
REFERENCES:
https://www.ourarticlelibrary.com/management/decision-making-management/decision-making-characteris
tics-nature-techniques-and other-details/53209
https://www.tutorialspoint.com/management-principles/management_principles_personality_decision_maki
ng
https://Slideshare.com/decision-making