Hello Respected Researchers and HR managers, In this section we will discuss about “Decision Making’s Definition, Types and Environments“. It is very much important for a Researcher as well as HR Concern person/ manager to know Decision Making’s Definition, Types and Environments. If researcher or HR Manager could follow the Points accordingly,it would easier to reach the goal. Let’s have a look…
⊕ Decision Making:
A manager faced with two or more feasible alternatives must decide which one to select. Decision-making is, therefore, the process of identifying a set of feasible alternatives and choosing a course of action from them. Weihrich and Koontz defined decision-making as the selection of a course of action from among alternatives. According to them, “it is the core of planning. A plan cannot be said to exist unless a decision – a commitment of resources, direction or reputation – has been made.”
Decision-making is the process of developing a commitment to some course of action. There are three things that help to characterize decision-making:
- it necessitates making a choice among two or more alternatives;
- it is a process that typically involves more than just what was decided (often we gain value in understanding how the decision was arrived at); and
- the ‘commitment’ mentioned above usually necessitates a commitment of resources – economic, human, time.
⊕ Types of Decisions:
Given the various decision environments within which we must manage, there are three primary types of decisions that we are able to make:
- Programmed decisions: programmed decisions are made for very routine problems. Let’s assume you supervise an assembly line at GM and an employee calls in sick. You have likely made the decision of how to replace his/her position many times before and therefore do not have to give it a lot of thought.
- Nonprogrammed decisions: these are the type of decisions that you have not typically made in the past. You need to demonstrate some creativity in your data gathering in order to make the most logical, effective decision you can. Often nonprogrammed decisions are decisions made at a middle or upper management level.
- Associative choices: associative choices are slightly different than decisions, in that the outcome of associative choices is not ideal. Associative choices are made in ‘organised anarchy’ environments, where the pace of change has been rapid. The intention is not to solve the problem, because circumstances do not allow for that. Rather, associative choices are made to improve the work environment; the problems are not solved.
⊕ Decision-making Environments:
There are a number of different decision environments that we are faced with in organizations:
(1). Certainty : This is an environment where we can depend on the outcome, because we have all of the information we need.
(2). Risk : In an environment of risk, you still have information, just not as much. Yet you have enough information to assign a probability to the outcome – in other words, you can determine the degree of likelihood of the outcome.
(3). Uncertain Environments: These are the most difficult. Under these circumstances, you have very little information, and prediction is virtually impossible. You are not able to rely on any data you have in a meaningful way, and therefore sometimes these decisions are made using your own intuition, your employees understanding and analysis of the possible outcomes. Perhaps you are trying to determine whether to launch a new product. It is a product that has no similar competitor, and it is expensive to produce.
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