Decision making

• The word decision derived from the Latin word “

Decider”- which means cutting away or cutting
off. It involves a cut of alternatives between
desirable and that are undesirable.
• It’s a choice of desirable alternatives.
• Lopez: “ decision represents a judgment; a final
resolution of conflict of needs, means or goals
and a commitment to action made in phase of
uncertainty, complexity and irrationality.”
 3 aspects of human behaviour
• Cognition- activity of mind and knowledge.
• Connation- actions of mind-willing, desire,
aversion.
• Affectation- action of mind associated with
emotion, feeling and mood.
 Features

• Implies that there are alternatives

• Has freedom to choose
• May not be rational but judgmental,
emotional preferences and values.
• Goal directed- achieve some results through
decision making
What is Decision Making?

➢It is the process whereby a final but best choice is

made among the alternatives available.
➢When a group makes decision, it can be either
through the consensus mode or through majority vote.
➢When all members of the group agree to the decision
arrived at, it is called ‘consensus’.
➢If majority of the group members agree to the
decision arrived at, it is called ‘majority vote’.
 Types

• Programmed: routine and repetitive made

within the frame work of organizational
policies or rule, eg: promotion of employees-
based on promotion criteria
• Non programmed: Decisions relevant for
solving unique / unusual problems in which
alternatives cannot be decided in advance. Eg:
action for growth have several alternative
routes; readymade solutions are not available.
• Strategic :decision concept is based on strategy which is a
major action plan such as
• Affects the whole or major part of the organization.
• Contribute to the achievement
• Involves major departure from earlier practice.
• Generally non programmed
• Tactical: operational decisions derived out of
strategic decisions-
• relates to day to day workings
• Mostly programmed one
• Short term in nature and effects narrow part
• Decisions can be delegated to lower level managers
 Decision Making Process:
It involves the following 4 steps:
❖Diagnosing the Problem/identification:
Decisions are made to solve problems. Hence, the first step
involved in decision making process is to identify the problem to be
solved.
❖Developing Alternatives:
Decisions are made out of alternatives. Therefore,
alternatives are developed through different sources like
experience, practices in other organizations, and ideas and
suggestions from different parties related to the diagnosed
problem.
❖Evaluating the Alternatives:
Having alternatives being developed, these are evaluated
one by one to know their plus and minus points. Then, finally the
most appropriate alternatives is selected.
❖Implementing and Monitoring the Decision:
The last step involved in the decision making process is
implementing the selected alternative and then monitoring it.
Monitoring may include activities like seeing whether the
activities are taking place according to plan or not, whether the
workers/subordinates are performing according to expectations
or not. If not, appropriate measures need to be taken to correct
the situation.
 Effective decisions
1. Action orientation- directed towards relevant
and controllable aspects of the environment
2. Goal direction: enables to meet its
objectives.
3. Efficiency in implementation - Take into
account all the possible factors- external and
internal context.
TECHNIQUES FOR IMPROVING
GROUP DECISIONS
1. Brainstorming:
This technique was originally adopted by Alex Osborn in
1938 in an American company for encouraging creative
thinking in groups of six to eight people. According to him,
brainstorming means using the brain to storm the problem. In
brainstorming, the participants should be connected with the
problem directly or closely. It is based on the following 5 basic
guidelines:

a) Generate as many ideas as possible- focus on

problem
b) Be creative, freewheeling and imaginative.
c) Build upon piggyback, extend, or combine earlier
ideas.
d) Withhold criticism of others ideas- do not evaluate
e) Ideas are expected without taking into consideration
any limitations: financial, legal or organizational.
Generally limitations act as deterrent to free flow of ideas
There are 2 principles that underlie brainstorming. One
is deferred judgment, by which all ideas are
encouraged without criticism and evaluation. The
second principle is that quantity breeds quality. As
more ideas come forth, it facilitates to develop the
higher-quality ones.
Advantages
1. Useful for simple and well defined problem
2. Stimulate members to spark new ideas and freedom to
express them.
3. Last 10 minutes to 1 hr and do not require much preparation
2. Nominal Group Technique (NGT):
This technique mainly focuses on minimizing the
problem of time consuming and the decisions influenced
by the dominant members. The members have minimal
interaction prior to making a decision. The NGT follows
the following process:
a) Members are brought together and presented a problem.
b) Each members develops a solution or ideas independently
and writes them on cards.
c) Each member presents his/her ideas to the group in a
round-robin procedure.
d) When the presentation of ideas by each member is over,
brief time is allotted to clarifications of ideas or solutions.
e) Group members individually rank their preferences for the
best alternatives by secret ballot.
f) Based on above, the group decision is announced.
 Advantages

•Encourages creativity

•Prevents domination by some

•Encourages exploration

•Forum for expression of the minority

•Time to think before offering solutions

3. Delphi Technique:
The name Delphi indicates a shrine at which the ancient
Greeks used to pray for information about the future. In Delphi
technique of decision making, members are experts, scattered over
large distances and do not have face-to-face interaction for
decision-making. A typical approach involved in decision-making
works as follows:
Firstly, a small group of members designs a questionnaire
which is administered in a larger group. The results so obtained are
then tabulated and used in developing a revised questionnaire. The
questionnaire is then completed by a larger group. The results of
( original)the first group are fed back to the respondent group to
use these in their subsequent responses. The process is repeated
several times until the response converses satisfactorily or a
consensus is reached/ narrowed and focused.
 Merits

• Large number from geographically separated

• Quality can improve
• Express opinion freely
• Not influenced by others as no face to face
interaction
• Efficient use of experts time
• Diversity and quantity of ideas
• However its time consuming
4. Consensus Mapping:
It is yet another technique of group-decision making.
In this technique, an attempt is made to arrive at a decision
by pooling the ideas together generated by several task
sub-groups.
It begins with developing ideas by the task sub-
group.
The facilitators encourage participants to further develop
clusters of ideas.
The ideas so generated by the task sub-groups are
developed and narrowed in smaller number of ideas. Then,
all the ideas are consolidated into a representative
structure called ‘strawman map’ for the all ideas generated
by the sub-groups. Strawman map is further narrowed
down to arrive at a mutually acceptable solution.
 Advantages

• Best suited for problems that are

multidimensional and interconnected
relationships
• Involve many sequential steps in problem
solving
 Positive Aspects of GD
• Pooling of knowledge and information-
defining variables and suggesting alternatives.
• More perspectives of the problem
• Quality decisions because of large number
• Satisfaction and commitment- group spirit,
similarity
• Personnel development- learning enhanced
• More risk taking
Negative aspects

• Time consuming and costly

• Individual domination – manipulate the group
decisions in their direction because of age,
experience and other characteristics
• Problem responsibility- if decision is negative ,
no one can be held responsible.
• Some decisions are simply a compromise
between various views.
 Danger of Group Decision Making:
❑Group Polarization:
It refers to the tendency for the groups to make decisions that
are more extreme than the initial inclination of its members. These
more extreme decisions are towards greater risk if individuals’ initial
tendencies are to be risky and toward greater cautious .

❑Group Think:
When Too Much Cohesiveness is a Dangerous Thing. When
Group Comes Together To Make A Decision, One Possibility is That The
Group Takes an Extreme View (Group Polarisation).
Reaching agreement becomes more important that sound decision

A pressure for conformity

SOMETIMES ITS POSSIBLE THAT:

➢THE GROUP STOPS THINKING ABOUT OTHER

OPTIONS.
➢THE GROUP FOCUSSES ONLY ON THEIR DECISSION
➢THE GROUP ASSUMES THAT IT CANNOT GO
WRONG
➢THE GROUP DECIDES THAT ALL MEMBERS MUST
SUPPORT THE DECISION AND WILL REJECT ANY
CONTRARY INFORMATION.
❑ BIASED PROCESSING:
Another source of error in the group decision
making process is the bias with which people process
available information.
1. Groups are always searching for evidence to
support their ideas and less motivated to making an
accurate decision.
2. The group members make decisions on the basis
of principles accepted in society in order to be seen
favourably.
3. Groups do not always pool their resources and fail to
share information, ideas that are unique to each member.
 Reference

• Prasad L.M ( 2010) Principles and Practice of

Management , Sultan Chand & sons
• Khanka S.S( 2006) Organizational behavior.
Sultan Chand & sons.