DECISION MAKING

Ambuj Bhardwaj
 “A decision is a judgment. It is a choice
between alternatives.
It is rarely a choice between right and wrong.
It is at best a choice between “almost right”
and “probably wrong”.

Decision = choice made from available alternatives

Decision Making = process of identifying problems and

opportunities and resolving them
The word decision is defined as:
“A choice between two or more alternatives”.

Thus decision-making can be defined as:

“The selection of a course of action from among
alternatives ”.
1 • Identifying a problem
2 • Identifying decision criteria
3 • Allocating weights to criteria
4 • Developing alternatives
5 • Analyzing alternatives
6 • Selecting an alternative
7 • Implementing the alternative
8 • Evaluation (of decision effectiveness)
Problem is a discrepancy (difference) between
an existing and a desired state.
The word criteria, is defined as “a standard by
which something can be judged”.
A decision criteria therefore, is the basis of a
decision, which outlines the relevant and
important factors for a decision. And implicitly,
it also defines what is not important.
The next step in the decision making process is
prioritization.
Prioritization is achieved by assigning
quantitative weights to each criteria element.
The weightage defines the relative significance
of each element.
Involves defining the possible alternatives
(or choices) that would resolve the problem.
In our case, the alternatives would be a list of
candidates or job applicants.
Alternatives are rated and analyzed
on the basis of the criteria
The rating can be based on a
specified scale, say 1 – 5 etc.
Rating may be subjective in nature
and thus, may depend on the
judgment of the individual(s)
Involves choosing the best alternative, based on
the above rating and analysis
Generally implies selecting the alternative with
the highest score.
Putting the decision into action
Involves clear communication of the decision to
all concerned and obtaining their commitment
Evaluation forms an integral part of any process
Involves evaluation of the outcome based on the
desired goal and criteria
Involves assessing the effectiveness and efficiency of
the outcome (or the entire process)
In case of any undesired results, each step of the
process is carefully reviewed to trace the root causes
Decision making – process of identifying and
solving problems
1. Problem Identification
2. Problem Solution
Programmed Decisions – repetitive and well
defined
Nonprogrammed Decisions – novel and poorly
defined
 ILL-structured Nonprogrammed Top
Decisions
Type of Level in
Problem Organization
Programmed
Well-structured Decisions Bottom

Programmed Decision
A decision that is repetitive and routine and can be made by using
a definite, systematic procedure.
Nonprogrammed Decision
A decision that is unique and novel.
The Principle of Exception
“Only bring exceptions to the way things should be to the
manager’s attention. Handle routine matters yourself.”
SUMMARY : CYCLIC APPROACH FOR DECISION MAKING