The actual decision process occurs in two stages:
Stage 1 At this stage, the decision making applies a minimum performance rule to each dimension that specifies the minimum acceptable performance level for each dimension of the decision.
Stage 2: The minimum performance level may be less than desirable
and when considered by
itself, would lead to the rejection of the alternative.
The features of decision-making process are as follows:
(1) Decision making is a goal oriented process. Decisions are made to achieve certain goals.
(2) Decision making involves choice or selection of the most appropriate course of action out of various available alternatives.
(3) Decision making is an ongoing or continuous process.
(4) Decision making is an intellectual process.
(5) Decision making is a dynamic process.
(6) Decision making is situational.
Organisation’s decisions are classified as:
(1) Strategic Decisions : Strategic decisions are taken at higher level of management. Strategic decisions invcve long term commitments or resources, for example, where to locate a new plant.
(2) Tactical or Operational Decisions : Tactical decisions are
taken at lower level. Tactical problems invve short term resource deployments
supporting decisions such as how much production lines to operate.
Decision-macing specific problem, search for objectives, identifies alternatives which result in the action evahticn of alternatives.
When a manager makes a decision, it is in effect, organisation’s response to either an opportunity or a problem. Decision making process is a dynamic concept rather than static. Once the set of decision alternatives has been setup, each one is evaluated on the basis of the following relevant criteria:
(4) Social and ethical issues.
For most decisions, economic criteria will be.important. The relative importance of criteria may be situational. The impact of business decisions on society is important because an economic unit operates at the pleasure of the society. There are five steps involved in decision making. Decision making is a crucial (part) role performed by a manager. It is a case in corporate world that higher the responsibility, higher is the requirement of effective decision making.
A decision making should follow the following five steps:
(1) Recognition of decisions needs to be made. The need for decision recognition comes into picture in case of existence of a problem or a state of disparity between desired and actual condition.
(2) Once the need for making the decision is as decision ascertained, then it is important to identify the criteria for decision making.
(3) To allocate certain weightage to the criteria.
(4) To find out the different alternatives for the problem.
(5) Strengths and weaknesses should
be compared with the help of the criteria to choose the best alternative.
Following are some of the skills relevant in terms of decision making:
(1) Ability to convert the ideas into reality.
(2) Consistent performance.
(3) Thorough knowledge of subject.
(4) Awareness about the latest developments.