Decision Making Process

What is Decision-Making?

A decision is a choice made between 2 or more available alternatives.

Decision Making is the process of choosing the best alternative for reaching objectives.

Decision-making is the process of selecting one course of action from several alternative actions. It involves using what you know (or can learn) to get what you want. To improve your decision-making skills, you need to know yourself, your values and your abilities. Values are your opinions about what is “right” or “good” or “valuable.” Your values reflect what you think is important in life. They are developed through experiences within the family, with friends, through church, school, and community organizations, and with the society at large. Values give meaning to your life by providing a basis for setting priorities—for deciding which goals or actions are more worthwhile and which ones are less important. Knowing family values helps the members of a family establish goals, make the necessary decisions and take the needed actions to meet their goals. The values of individual family members form the basis for the values of the family group, even though some individual differences and conflicts may have to be resolved. A decision-maker also must know something about the environment—its opportunities, its limitations and the possibilities for change. If you have only one possible alternative (or do not perceive more than one course of action), you are not making a decision. However, even in this limited choice situation, if you have the choice of taking action or not taking action, decision-making is involved. Although many decisions are made largely by habit, others involve weighing two or more alternatives.

A decision may simply be defined as a choice among alternatives or the selection of and commitment to a course of action. Decision making is a process consisting of the activities which result in the choice of an alternative or the commitment to a course of action.

An alternative is one of a set of strategies each capable of fulfilling a common objective in some degree but each resulting in somewhat different consequences. The very first factor involved in the definition of decision making is Process. Needless to say, decision making encompasses multiple processes such as thinking, memory, evaluation and making your mind up to take action. The definition may also involve intuitive feelings or rational thought processes, both of which aid in making sound decisions. The second important criterion in the definition is Options and taking decisions without adequate options at bay may not prove to be very fruitful and apt. Hence, before jumping on to take any decision, consider your present position and where you want to be and then look at the multitudes of ways to reach there.

The next crucial factor in the definition of decision making is Choices that are more often than not quite flustering and bewildering to make. Choices inevitably are restricted by several constraints and obstacles which make the process of making a particular choice all the more difficult. For instance, the priorities of our life may at times come into conflict with the demands of the company we work with and in such cases we often have to compromise between the ideal thing that we really want and the decision that we are bound to take.

Lastly, the actions that are to be implemented after much considerations and deliberations form the concluding step to the definition. It is extremely important that the decisions taken are finally execute.

Decision making is the process of identifying alternative courses of action and selecting an appropriate alternative in a given decision situation. This definition presents two important parts:

1. Identifying alternative courses of action means that an ideal solution may not exist or might not be identifiable.

2. Selecting an appropriate alternative implies that there may be a number of appropriate alternatives and that inappropriate alternatives are to be evaluated and rejected. Thus, judgment is fundamental to decision making. Choice is implicit in our definition of decision making. We may not like the alternatives available to us, but we are seldom left without choices. Decision making steps this model depicts are as follows:

1. Identify an existing problem

2. List possible alternatives for solving the problem

3. Select the most beneficial of these alternatives.

4. Implement the selected alternative.

5. Gather feedback to find out if the implemented alternative is solving the identified problem.

5 ELEMENTS OF THE DECISION SITUATION:

1. The Decision Makers

2. Goals to be served

3. Relevant Alternatives

4. Ordering of Alternatives

5. Choice of Alternatives

KINDS OF DECISIONS

Decisions are very important part in life; we take decisions at every moment in daily routine. If we choose a TV program to watch among several programs it means we took decision about which program to watch Decision is a choice made from available alternatives. We determine types of decision making by looking at outcomes and the impacted entity. At the highest level we have chosen to categorize decisions into three major types: consumer decision making, business decision making, and personal decision making. We make this specific choice for the purpose of improving decision making by first identifying the types of decision making in a way that helps establish the context for decisions being made. In our decision making model, establishing the types of decisions makes it possible to identify the related decisions that will influence, constrain and be influenced and constrained by a specific decision. There are various types of decision making style. These can be categorized by the degree to which other people participate in the process. There is good evidence to support the argument for involving others in decision making. However, participation can also be a time consuming activity. When deciding on the most suitable decision-making method, it is important to consider that full participation is not required in every occasion. You cannot expect in a group all decisions to be made by the entire group. It would be an incredible waste of time! According to the type of decision, a group might prefer different systems with more or less people involved.

Traditionally, organizations count on three different types of decisions:

• Strategic – relating to the identification of long-term or overall aims and interests and the means of achieving them

• Organizational – relating to the way different aspects and parts of a group are arranged with the aim of being more orderly and efficient

• Operational – relating to the way a group or organization works on a daily basis

problem recognition

=====>search

=====>alternative evaluation

=====>choice

=====>post acquisition processes

Habitual decision making:

• a problem is recognized

• long term memory provides a single preferred brand

• that brand is purchased

• only limited post purchase evaluation occurs

• associated with repeat purchases and brand loyalty

• The choices or decisions made out of “habit” without much deliberation or product comparison. Purchases made in this way are sometimes called habitual purchases, because these decisions are made so rapidly that they appear to be based on habit. Habitual purchase decisions are either characterized by brand loyalty or by repeat buying behavior. Dietary habits are the habitual decisions an individual or culture makes when choosing what foods to eat.

Technical decisions:-These relate to the achievement of a single goal. Work simplification decisions are ordinarily technical decisions. Decisions that fall into this category are goal oriented. These decisions involve weighing the alternatives. An example of technical decision might be whether to go to class or stay in your room. You know the probability of risk, the teacher may give a quiz , whether or not you can obtain the lecture notes from another class member , and any additional potential risk factors, The decision you make will be based on these known facts.

Economic Decisions:-

A decision about an economic issue, is most commonly about how to allocate resources among multiple purposes. These decisions have two basic components: multiple goals and limited resources. Proper allocation of money resource plays an important role in economic decision making. Your decision involves determining which goals and what resources are required. There are many resources other than money. Therefore all resources are involved in these decisions.

Social Decisions:-

Social decisions directed towards goal attainment resulting from the utilization of resources, they occur through interaction between individuals .You have been involved in many social decisions. Example of these might well have been where to place the furniture, which drawer and which part of the closet were to be used by each individual or determining each person’s responsibility for keeping the room neat and tidy.

As you made these decisions interaction took place between you and your inmate (s).Your values and role perceptions influenced your interaction. Social decisions differ from economic decisions in several ways. The values, goals, and standards are involved .The risk factor involve values and roles. Since each individual participates in these decisions using his/ her values and on the basis of role perceptions, the risk factor includes value and role conflicts. You may not be aware of values and role perceptions of other person.

Legal Decisions

Within each spheres of interaction you have various rules, regulations, and policies (legal decisions) that pertain to you and your actions within society. You have to follow certain rules and regulations. You also know the risk factors involved in not following these rules laid by your institution or hostel for example.

Political Decisions:

These decisions are made by a group of individuals whose major purpose is to function as a single unit. The emphasis here is placed upon the procedure of how the decision is made rather than the actual resolution of the problem or situation. Political decisions deal with how decisions are made by the group or individual involved. They are sometimes called procedural or structural decisions.

Individual and Group Decisions

One way to explore decision-making is to look at individual and group decisions . . . their differences and their similarities. While many decisions are primarily a personal or individual concern, others involve the whole family, club or group, the community and the broader society. Group members accept decisions more readily and carry them out more efficiently when they have been involved in the decisionmaking process. Group decisions may be better if more alternatives are suggested and nonproductive options are identified

earlier. Families or other groups reach decisions in several ways, such as through:

1. Dominance/Submission (Win/Lose)—One person dominates the situation; others give in as a decision is made.

2. Conversion (sometimes Win/Win, sometimes Lose/Lose)—Additional facts are presented so one person persuades others to his or her view, or he or she gives up something to get something.

3. Integration (Win/Win)—Unanimity or a synthesis of ideas develops that everyone can agree on and support.

Decision making without a group’s input or a decision made regardless of the group’s opinion is, naturally, an individual decision. This is the more traditional decision making approach and can work effectively for a manager when the group’s input is not required or in certain cases, desired.

Group Decision Making

There are several models of group decision making that you can put to use. Two examples are consensus and consultation. Consensus decision making involves posing several options to the group and using the most popular option to make a decision. Consultation takes the opinions of the group into consideration when making a decision. Both methods require the group’s participation and call for a manager who respects the opinions and input of the group in the decision making process.

Advantages

An individual can make a decision quicker than group can, of course, since only one person needs to be consulted. Group decision making, though it can be an arduous process, can help cement the group by allowing input from all members of the group.

Disadvantages

There are times when each decision making method is not appropriate. Avoid individual decision making if the decision directly affects the group. For example, making a blanket decision that everyone must work weekends will meet with opposition for reasons ranging from religious to other personal obligations. On the flip side, group decision making should be avoided if there is little chance that a group might reach a consensus. For example, a directive that all members of a department must carry out works best when the manager decides on the course of action.

Many people resist this idea because they feel that group decision making, despite some virtues, is inherently slower than individual decision making, and even results geneGroup decision making is a type of participatory process in which multiple individuals acting collectively, analyze problems or situations, consider and evaluate alternative courses of action, and select from among the alternatives a solution or solutions. The number of people involved in group decision-making varies greatly, but often ranges from two to seven. The individuals in a group may be demographically similar or quite diverse. Decision-making groups may be relatively informal in nature, or formally designated and charged with a specific goal. The process used to arrive at decisions may be unstructured or structured. The nature and composition of groups, their size, demographic makeup, structure, and purpose, all affect their functioning to some degree. The external contingencies faced by groups (time pressure and conflicting goals) impact the development and effectiveness of decision-making groups as well.

In organizations many decisions of consequence are made after some form of group decision-making process is undertaken. However, groups are not the only form of collective work arrangement. Group decision-making should be distinguished from the concepts of teams, teamwork, and self managed teams. Although the words teams and groups are often used interchangeably, scholars increasingly differentiate between the two. The basis for the distinction seems to be that teams act more collectively and achieve greater synergy of effort. Katzenback and Smith spell out specific differences between decision making groups and teams:

• The group has a definite leader, but the team has shared leadership roles

• Members of a group have individual accountability; the team has both individual and collective accountability.

• The group measures effectiveness indirectly, but the team measures performance directly through their collective work product.

• The group discusses, decides, and delegates, but the team discusses, decides, and does real work.

GROUP DECISION MAKING METHODS

There are many methods or procedures that can be used by groups. Each is designed to improve the decision-making process in some way. Some of the more common group decision-making methods are brainstorming, dialetical inquiry, nominal group technique, and the delphi technique.

BRAINSTORMING

Brainstorming involves group members verbally suggesting ideas or alternative courses of action. The “brainstorming session” is usually relatively unstructured. The situation at hand is described in as much detail as necessary so that group members have a complete understanding of the issue or problem. The group leader or facilitator then solicits ideas from all members of the group. Usually, the group leader or facilitator will record the ideas presented on a flip chart or marker board. The “generation of alternatives” stage is clearly differentiated from the “alternative evaluation” stage, as group members are not allowed to evaluate suggestions until all ideas have been presented. Once the ideas of the group members have been exhausted, the group members then begin the process of evaluating the utility of the different suggestions presented. Brainstorming is a useful means by which to generate alternatives, but does not offer much in the way of process for the evaluation of alternatives or the selection of a proposed course of action.

One of the difficulties with brainstorming is that despite the prohibition against judging ideas until all group members have had their say, some individuals are hesitant to propose ideas because they fear the judgment or ridicule of other group members. In recent years, some decision-making groups have utilized electronic brainstorming, which allows group members to propose alternatives by means of e-mail or another electronic means, such as an online posting board or discussion room. Members could conceivably offer their ideas anonymously, which should increase the likelihood that individuals will offer unique and creative ideas without fear of the harsh judgment of others.

DIALETICAL INQUIRY

Dialetical inquiry is a group decision-making technique that focuses on ensuring full consideration of alternatives. Essentially, it involves dividing the group into opposing sides, which debate the advantages and disadvantages of proposed solutions or decisions. A similar group decision-making method, devil’s advocacy, requires that one member of the group highlight the potential problems with a proposed decision. Both of these techniques are designed to try and make sure that the group considers all possible ramifications of its decision.

NOMINAL GROUP TECHNIQUE

The nominal group technique is a structured decision making process in which group members are required to compose a comprehensive list of their ideas or proposed alternatives in writing. The group members usually record their ideas privately. Once finished, each group member is asked, in turn, to provide one item from their list until all ideas or alternatives have been publicly recorded on a flip chart or marker board. Usually, at this stage of the process verbal exchanges are limited to requests for clarification—no evaluation or criticism of listed ideas is permitted. Once all proposals are listed publicly, the group engages in a discussion of the listed alternatives, which ends in some form of ranking or rating in order of preference. As with brainstorming, the prohibition against criticizing proposals as they are presented is designed to overcome individuals’ reluctance to share their ideas. Empirical research conducted on group decision making offers some evidence that the nominal group technique succeeds in generating a greater number of decision alternatives that are of relatively high quality.

ADVANTAGES AND DISADVANTAGES OF GROUP DECISION MAKING

The effectiveness of decision-making groups can be affected by a variety of factors. Thus, it is not possible to suggest that “group decision making is always better” or “group decision making is always worse” than individual decision-making. For example, due to the increased demographic diversity in the workforce, a considerable amount of research has focused on diversity’s effect on the effectiveness of group functioning. In general, this research suggests that demographic diversity can sometimes have positive or negative effects, depending on the specific situation. Demographically diverse group may have to over-come social barriers and difficulties in the early stages of group formation and this may slow down the group. However, some research indicates that diverse groups, if effectively managed, tend to generate a wider variety and higher quality of decision alternatives than demographically homogeneous groups.

Despite the fact that there are many situational factors that affect the functioning of groups, research through the years does offer some general guidance about the relative strengths and weaknesses inherent in group decision making. The following section summarizes the major pros and cons of decision making in groups.

ADVANTAGES

Group decision-making, ideally, takes advantage of the diverse strengths and expertise of its members. By tapping the unique qualities of group members, it is possible that the group can generate a greater number of alternatives that are of higher quality than the individual. If a greater number of higher quality alternatives are generated, then it is likely that the group will eventually reach a superior problem solution than the individual.

Group decision-making may also lead to a greater collective understanding of the eventual course of action chosen, since it is possible that many affected by the decision implementation actually had input into the decision. This may promote a sense of “ownership” of the decision, which is likely to contribute to a greater acceptance of the course of action selected and greater commitment on the part of the affected individuals to make the course of action successful.

DISADVANTAGES

There are many potential disadvantages to group decision-making. Groups are generally slower to arrive at decisions than individuals, so sometimes it is difficult to utilize them in situations where decisions must be made very quickly. One of the most often cited problems is groupthink. Irving Janis, in his 1972 book Victims of Groupthink, defined the phenomenon as the “deterioration of mental efficiency, reality testing, and moral judgment resulting from in-group pressure.” Groupthink occurs when individuals in a group feel pressure to conform to what seems to be the dominant view in the group. Dissenting views of the majority opinion are suppressed and alternative courses of action are not fully explored.

Research suggests that certain characteristics of groups contribute to groupthink. In the first place, if the group does not have an agreed upon process for developing and evaluating alternatives, it is possible that an incomplete set of alternatives will be considered and that different courses of action will not be fully explored. Many of the formal decision-making processes (e.g., nominal group technique and brain-storming) are designed, in part, to reduce the potential for groupthink by ensuring that group members offer and consider a large number of decision alternatives. Secondly, if a powerful leader dominates the group, other group members may quickly conform to the dominant view. Additionally, if the group is under stress and/or time pressure, groupthink may occur. Finally, studies suggest that highly cohesive groups are more susceptible to groupthink.

Group polarization is another potential disadvantage of group decision-making. This is the tendency of the group to converge on more extreme solutions to a problem. The “risky shift” phenomenon is an example of polarization; it occurs when the group decision is a riskier one than any of the group members would have made individually. This may result because individuals in a group sometimes do not feel as much responsibility and accountability for the actions of the group as they would if they were making the decision alone.

Decision-making in groups is a fact of organizational life for many individuals. Because so many individuals spend at least some of their work time in decision-making groups, groups are the subjects of hundreds of research studies each year. Despite this, there is still much to learn about the development and functioning of groups. Research is likely to continue to focus on identifying processes that will make group decision-making more efficient and effective. It is also likely to examine how the internal characteristics of groups (demographic and cognitive diversity) and the external contingencies faced by groups affect their functioning.

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Choosing a decision making approach can either keep a business on track or derail it.

Making decisions is a large part of doing business. When there is only one person involved or affected by a decision, making that decision is relatively easy. But when coworkers or employees need to be taken into consideration, a group decision could be the best solution. Deciding between individual and group decision making methods depends on the decision that needs to be made, the group that is affected and the employer’s general leadership style.

Another way to explore decision-making is by considering the content of the decision.

1. Social or human decisions involve setting goals and priorities that determine the general roles of individuals and relationships among individuals within a group.

2. Economic or allocation decisions involve the availability of resources and ways of allocating or distributing these resources among various goals.

3. Technical or “what, when, how, who, why” decisions involve allocating specific amounts of given resources to most efficiently attain a single goal, accomplish a specific task or make a specific consumer purchase.

4. Coordination and interaction decisions relate to social, economic, and technical decisions. They deal with communication within the family and with the larger community, the kinds of information needed to make other decisions, criteria for evaluating decisions and ways of motivating family members to carry out their roles.

There are good decisions, and there are bad ones. Some never get made, and others are made too late. And then there are those that are great. These are right at the time they are made and have ever more positive consequences as time moves forward.

In particular, we will be considering how you already have this model available to you and how you can choose to run it easily and elegantly so that you make the choices that allow you live a life with purpose and passion, moving in a direction that’s right for you, while saving you time, money and effort.

We all have freedom of choice, but you will never have freedom of consequences.

Choose wisely.

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A peacefulness follows any decision, even the wrong one. ~Rita Mae Brown

When you have to make a choice and don’t make it, that is in itself a choice. ~William James

It’s not hard to make decisions when you know what your values are. ~Roy Disney

Choices are the hinges of destiny. ~Attributed to both Edwin Markham and Pythagoras