DECISION MAKING

BY FUNWELL NYANGA

QUESTIONS AND ANSWERS

1. Define the term decision making

2. State the purpose of the decision making process
3. Explain types of decision making
4. Outline elements or steps of decision making process
5. Discuss the factors that influences decision making
6. Mention the barriers to effective decision making

MARKING KEY

DEFINITION

Decision making is a process of identifying and selecting a course of action to a specific

problem. - It is a deliberate cognitive process consisting of sequential steps that can be analyzed,
refined and integrated to yield greater decision and accuracy in solving problems and initiating
action. - Decision making can be regarded as the cognitive process resulting in the selection of a
course of action among several alternatives.

PURPOSE OF DECISION MAKING

 Better utilization of resources - Decision making helps to utilize the available resources for
achieving the set objectives. The available resources are money, materials and methods.

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 Facing problems and challenges - Decision making helps individuals to face and tackle new
problems and challenges. Quick and correct decisions help to solve problems and to accept
new challenges.
 Achieving objectives - Rational decisions help individuals achieve all their objectives
quickly because this is done after analyzing and evaluating all the alternatives.
 Facilitate innovation - Rational decisions facilitate innovation because it helps to develop
new ideas, new processes etc.
 It increases efficiency - It enables things to run smoothly.
 Promotes thorough, comprehensive care 8. Aids clear thinking

TYPES OF DECISION MAKING

1. Strategic decisions - Decision making confined to policy makers in order to meet strategic
goals of the organization.

2. Administrative decisions - Are made by middle level managers so that they make decisions to
resolve administrative problems.

3. Operational decisions - These are routine decisions. These are made in accordance with rules
and regulations of the organization.

4. Programmed structured decision - Decisions are made in accordance with some habit, rule or
procedure. Every organization has written or unwritten polices that simplify decision making in
reciting situations by limiting or excluding alternatives. Routine procedures exist for dealing
with routine problem.

5. Non- programmed decisions - Dealing with unusual or exceptional problems. It involves

generating new ideas, active handling of situations which can be used to develop or make
decisions. 6. Individual decision making - When a decision is taken by a single individual.
Usually routine type decision is taken by individuals within the broad policy framework of the
organization.

7. Group decision making - Decisions are taken by group of individuals constituted in the form
of a standing committee. Generally, very important and pertinent matters for the organization are

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referred to this committee. 8. Major and minor decision making - Decision pertaining to purchase
of new machine is a major decision. Purchase of office stationery is a minor decision

STEPS IN DECISION MAKING

1. Identifying and Diagnosing Problems The first step in the decision-making process is the
clear identification of opportunities or the diagnosis of problems that require a decision.
Discrepancies (differences) between actual and desired conditions alert a manager to a potential
opportunity or problem. Recognize that the problem exists between the current state and the
desired state. Compare the current issues with past, present and future and be prepared to do
something about it. Dig deeper and attempt to diagnose the true cause of the problem or
symptom that has surfaced.

2. Identifying Objectives Objectives reflect the results the organization wants to attain.
Objectives are often referred to as targets or standards. Objectives can be expressed for long
spans of time (years or decades) or for short spans of time (hours, days or months). Long-range
objectives usually direct much of the strategic decision making of the organization, while short-
range objectives usually guide operational decision-making. Regardless of the time frame,
objectives will guide the ensuing decision-making process.

3. Generating Alternatives once an opportunity has been identified or a problem diagnosed

correctly, a manager develops various ways to achieve objectives and solve the problem. This
step requires creativity and imagination. In generating alternatives, the manager must keep in
mind the goals and objectives that he or she is trying to achieve. Ideally several different
alternatives will emerge. In this way, the manager increases the likelihood that many good
alternative courses of action will be considered and evaluated.

4. Evaluating alternatives this involves determining the value or adequacy of generated

alternatives. Which solution is the best? Fundamental to this step is the ability to assess the value
or relative advantages and disadvantages of each alternative under consideration. The result
should be a ranking of the alternatives. Pick on the best alternative and implement it.

5. The Act of Choice Decision making is commonly associated with making the final choice.
Although choosing an alternative would seem to be a straight forward proposition, simply
consider all the alternatives and select the one that best solves the problem. Because the best

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decisions are often based on careful judgments, making a good decision involves carefully
examining all the facts, determining whether sufficient information is available, and finally
selecting the best alternative.

6. Implementing the decision. When decisions involve taking action or making changes,
choosing ways to put these actions or changes into effect becomes an essential managerial task.
The keys to effective implementation are: - Sensitizing those who will be affected by the
decision and - Proper planning consideration of the resources necessary to carry out the decision.

7. Monitoring and Evaluating No decision-making process is complete until the impact of the
decision has been evaluated. Managers must observe the impact of the decision as objectively as
possible and take further corrective action if it becomes necessary. Monitoring the decision is
useful whether the feedback is positive or negative. Positive feedback indicates that the decision
is working and that it should be continued and perhaps applied elsewhere in the organization.
Negative feedback indicates either that the implementation requires more time, resources, effort,
or planning than originally thought or that the decision was a poor one and needs to be re-
examined.

FACTORS INFLUENCING DECISION MAKING

 Decision makers
 Physical and emotional state
 Personal philosophy
 Biases
 Values
 Experience
 Knowledge
 External factors
 Environmental conditions

BARRIERS TO DECISION MAKING

 Lack of information Limited information and this is often exacerbated by the scarcity of
time, both of which conspire to mean that decisions and actions must follow in quick
succession, without allowing time for full consideration of alternatives and implications.

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 Lack of context The toughest decisions are often those that seem to be made in a vacuum. In
such situations there are no reference points, no structure to rely on for cues or precedents.
The lack of context or structure can also refer to the absence of values.
 Too much information (Noise) Overwhelming volume of information can drown out any
ability to assess a situation reliably and in timely fashion.
 Lack of feedback and practice We often don’t get feedback from subordinates, peers and
supervisors. The lack of feedback can be a strong constraint to progress and innovation.
 Cultural barriers In an increasingly globalized world, we come into contact with people
whose perspectives, values, languages, etiquette and cultures may differ significantly from
ours. This can lead to misunderstandings which adversely affect decision making. Cultural
differences may also directly influence decision making approaches.

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