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Answered: - Decision making process as explained by different authors


Decision making process as explained by different authors in entrepreneurship and communication studies


Decision?Making

 

What is Decision Making?

 

Some Definitions

 

1. Decision making is the study of identifying and choosing alternatives based on the values

 

and preferences of the decision maker.

 

Making a decision implies that there are alternative choices to be considered, and in such a case

 

we want not only to identify as many of these alternatives as possible but to choose the one that

 

(1) has the highest probability of success or effectiveness and (2) best fits with our goals, desires,

 

lifestyle, values, and so on. The two important ideas here are that first, there must be some

 

genuine alternatives to choose from among. Note that "Do it" or "Don't do it" does not qualify as

 

a set of alternatives. Only "Do this" or "Do something else" really qualifies. Second, every

 

decision must be made in the light of some standard of judgment. This standard usually gets

 

expressed in the form of criteria, which reflect the values and preferences of the decision maker.

 

These values and preferences are often influenced by corporate rules or culture, law, best

 

practices, and so forth.

 


 

2. Decision making is the process of sufficiently reducing uncertainty and doubt about

 

alternatives to allow a reasonable choice to be made from among them. This definition

 

stresses the information-gathering function of decision making. It should be noted here that

 

uncertainty is reduced rather than eliminated. Very few decisions are made with absolute

 

certainty because complete knowledge about all the alternatives is seldom possible. Thus, every

 

decision involves a certain amount of risk. If there is no uncertainty, you do not have a decision;

 

you have an algorithm--a set of steps or a recipe that is followed to bring about a fixed result.

 


 

Quite literally, organizations operate by people making decisions. A manager plans, organizes,

 

staffs, leads, and controls her team by executing decisions. The effectiveness and quality of those

 

decisions determine how successful a manager will be.

 

Managers are constantly called upon to make decisions in order to solve problems. Decision

 

making and problem solving are ongoing processes of evaluating situations or problems,

 

considering alternatives, making choices, and following them up with the necessary actions.

 

Sometimes the decision?making process is extremely short, and mental reflection is essentially

 

instantaneous. In other situations, the process can drag on for weeks or even months. The entire

 

decision?making process is dependent upon the right information being available to the right

 

people at the right times.

 


 

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Decision Making Process

 

The decision?making process involves the following steps:

 

1. Define the problem.

 

2. Identify limiting factors.

 

3. Develop potential alternatives.

 

4. Analyze the alternatives.

 

5. Select the best alternative.

 

6. Implement the decision.

 

7. Establish a control and evaluation system.

 


 

Define the problem

 

The decision?making process begins when a manager identifies the real problem. The accurate

 

definition of the problem affects all the steps that follow; if the problem is inaccurately defined,

 

every step in the decision?making process will be based on an incorrect starting point. One way

 

that a manager can help determine the true problem in a situation is by identifying the problem

 

separately from its symptoms.

 


 

Concentrate on the problem at hand. This rule keeps the discussion very specific and avoids

 

the group's tendency to address the events leading up to the current problem.

 

Entertain all ideas. In fact, the more ideas that come up, the better. In other words, there are no

 

bad ideas. Encouragement of the group to freely offer all thoughts on the subject is important.

 

Participants should be encouraged to present ideas no matter how ridiculous they seem, because

 

such ideas may spark a creative thought on the part of someone else.

 

Refrain from allowing members to evaluate others' ideas on the spot. All judgments should

 

be deferred until all thoughts are presented, and the group concurs on the best ideas.

 


 

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Factors Affecting Decision Making

 

Perception Issues

 


 


 

Perception Issues ? perception can be described as the way in which individuals interpret

 

their environment. An individual?s perception can influence how they make decisions and

 

solve problems. For example, when information about a problem needs to be gathered the

 

individual?s perception will impact on where the information is sought and the type of

 

information regarded as relevant.

 


 

Issues within the organization

 


 


 

A number of organizational issues can impact on the decision making process. These

 

issues include: policies and procedures, organizational hierarchy and organizational

 

politics.

 


 

Issues within the environment

 

Environmental issues are the external factors that affect the organization. The types of external

 

factors that can have an effect on decision making: the market in which the organization

 

operations, the economy, government legislation, customers? reaction to the organization?s

 

products and services

 

Common Decision making mistakes

 


 


 


 


 


 


 

Only hearing and seeing what we want. Each individual has their own unique set of

 

preferences or biases which blinker them to certain information. The best way to deal

 

with this problem is to identify your preferences and biases while attempting to be open

 

to the information around you.

 

Placing too great a reliance on the information you receive from others. Often we rely on

 

certain individuals to provide support and guidance. This may be a suitable course of

 

action in many cases. However, if the individual is not closely involved in the problem

 

situation they may not have the necessary information or knowledge to help make the

 

decision

 

Placing too little emphasis on the information you receive from others. This issue can

 

easily occur in a team situation. In many cases the team members are the people who are

 

most closely involved in a problem situation and they often have the most pertinent

 

information in relation to the problem.

 


 

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Ignoring your intuition. On many occasions we are actually aware at a subconscious level

 

of the correct course of action. Unfortunately, we often tend to ignore our intuition or gut

 

feeling, the sixth sense or whatever we may choose to call it.

 


 

http://www.managementstudyhq.com/factors-affecting-decisionmaking.html#sthash.MuffuIDe.dpuf

 


 

Decision Making Levels

 

Operational decisions are the day-to-day decisions needed to operate the organization.

 

Operational decisions are more routine and follow known rules. How many? To what

 

specification? These decisions involve more limited resources, have a shorter-term application

 

and can be taken by middle or first line managers.

 

Tactical decisions, on the other hand, are those decisions that involve formulating and

 

implementing policies for the organization. Tactical decisions are about how to manage

 

performance to achieve the strategy. What resources are needed? What is the timescale? These

 

decisions are distinctive but within clearer boundaries. They may involve significant resources,

 

have medium-term implications and may be taken by senior or middle managers.

 

Strategic decisions are made by top managers and involve setting long-term organizational

 

goals and objectives. Strategic decisions are big choices of identity and direction. Who are we?

 

Where are we heading? These decisions are often complex and multi-dimensional. They may

 

involve large sums of money, have a long-term impact and are usually taken by senior

 

management.Strategic decisions affect the business direction of a company and help determine

 

what markets to play in and how. Because of the long-term effects, these types of decisions are

 

made less frequently, in some cases every five to ten years. The decision to get out of the

 

clothing business and sell outdoor sports equipment instead is a strategic decision with long-term

 

consequences. Strategic decisions are generally unstructured. There are few foolproof procedures

 

for determining corporate strategy and deciding what business to be in.

 


 

http://businesscasestudies.co.uk/cima/decision-making-techniques/types-ofdecisions.html#ixzz2hrpGtEPP

 


 

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