"عسى ان تكون علما ينتفع به" Decision making process

1. Decision Making

2. Plan of talk
 Introduction
 Needs of decision making
 Individual decision making
 Corporate decision making
– Type of decision
– Type of organization
– Level of management
 Conflict resolution and decision making
 Decision makers and the zero sum game
 Steps in decision making process

3. Plan of talk
 Introduction
 Needs of decision making
 Individual decision making
 Corporate decision making
– Type of decision
– Type of organization
– Level of management
 Conflict resolution and decision making
 Decision makers and the zero sum game
 Steps in decision making process

4. What is Decision?
A decision can be defined as: “a
course of action purposely
chosen from a set of alternatives
to achieve organizational or
managerial objectives or goals”.

5. Decisions and Mangers
 Decision making is an integral
part of modern management, it is
considered as one of managers
primary functions.

6. Decisions and Organizations
 Decisions are made to achieve
organization goals and objectives.
– Decision making process is continuous
and ongoing.
– Decisions are strictly important, they
determine both organizational and
managerial activities.

7. What is Decision Making?
“the process of deciding about something important, especially
in a group of people or in an organization”
Oxford Advanced Learner’s Dictionary

8. Cont. …
“Decision making involves the selection of a course of action
from among two or more possible alternatives in order to
arrive at a solution for a given problem”
Trewatha & Newport

9. Cont. …
 As evidenced by the foregone definitions, decision making
process is: “a consultative affair done by a comity of
professionals to drive better functioning of any
organization”.

10. Why Decision Making?
 Decision making is a continuous and
dynamic activity that pervades all
other activities pertaining to the
organization.

11. Cont. …
 No decision comes as end in itself, since
it may evolve new problems to solve.
 When one problem is solved another
arises and so on, such that decision
making process, as said earlier, is a
continuous and dynamic.

12. Cont. …
 During decision making process,
intellectual minds are involved and this
requires solid scientific knowledge
coupled with skills and experience in
addition to mental maturity.

13. Cont. …
 Decision making process can be regarded as check and
balance system that keeps the organization growing both in
vertical and linear directions.

14. Cont. …
 Decision making process is seeking
goals.
– These goals are pre-set business objectives,
company missions and vision.
 To achieve these goals, company may
face lot of obstacles in administrative,
operational, marketing wings and
operational domains.
– Such problems are solved out through
comprehensive decision making process.

15. Steps of Decision Making
 A lot of time is consumed while decisions are taken.
 In a management setting, decision cannot be taken abruptly, it
should follow the steps such as;
1. Defining the problem
2. Gathering information and collecting data
3. Developing and weighing the options
4. Choosing best possible option
5. Plan and execute
6. Take follow up action

16. Cont. …
 Since decision making process follows the
above sequential steps, a lot of time is spent
in this process.

17. Plan of talk
 Introduction
 Needs of Decision Making
 Individual decision making
 Corporate decision making
– Type of decision
– Type of organization
– Level of management
 Conflict resolution and decision making
 Decision makers and the zero sum game
 Steps in decision making process

18. Needs of Decision Making

19. Decision Making in Organization
 Decision making is part of everyone’s life, all of us have to
make decisions every moment.
 Right from choosing what to wear, to what to eat, to where
we live and work, and extending to whom we marry, decisions
are an integral part of our lives.

20. Cont. …
 Decision making needs:
1. The right kind of information
2. The complete information
3. The ability to synthesize and make sense of the information
4. Authority of decision maker

21. 1,2- Complete Right Kind of Information
 Getting the right kind and complete
information depend on external sources.
 There must be complete and accurate
information made available to the decision
maker.

22. Cont. …
 In Economics, there is a term called “asymmetries of
information”
– It indicates how incomplete and insufficient information leads to poor
decisions and wrong choices.
 Having partial information or faulty information often leads to
“analysis paralysis” which is another term for poor decision
making abilities.

23. 3- The Ability to Synthesize and Make Sense of
the Information
 The ability to make informed decisions is
a personality trait.
 Successful CEO’s are those who can take
into account the different viewpoints
and divergent perspectives and arrive at
the right decision.

24. Cont. …
 Nowadays, business landscape is littered with examples of
companies that have made strategic errors, and these are
mostly to do with lack of proper decisions taken by the CEO’s
and managers in these firms.

25. Cont. …
Chrysler and ford
 They failed to meet the challenge of competition from
Japanese auto majors like Toyota, this failure was mostly due
to the lack of imaginative decisions that would have
responded to the threat in a coherent manner.
 Under the stewardship of Lee Iacocca, they were able to
successfully meet the competition by the Japanese because of
firm decisions taken by him.

26. 4- Authority of Decision Maker
 Decision maker should have
legitimacy and authority over the
people who he is deciding upon.
 Decision makers succeed only
when their decisions are honored
and followed by people or groups
that the decision impacts.

27. Cont. ...
 In many cases, the fragmented nature of the organizations
with different interests often undermines the decision making
capabilities of the decision maker.
 Hence, it is worth mentioning that such authority must be
vested with the decision maker.

28. Conclusion
 Even with reliable and accurate information, the decision
maker ought to have good problem solving skills and astute
decision making abilities to arrive at sound judgments
regarding the everyday problems and issues, them comes his
authority to ensure decision proper implementation.

29. Plan of talk
 Introduction
 Needs of decision making
 Individual decision making
 Corporate decision making
– Type of decision
– Type of organization
– Level of management
 Conflict resolution and decision making
 Decision makers and the zero sum game
 Steps in decision making process

30. Individual Decision Making

31. Individual Decision Making
 Individuals have a tendency to
think and question before
performing.

32. Pros of Individual Decision Making
1. Individuals generally make prompt decisions
– Group is dominated by various people, making decision-making very
time consuming.
– Assembling group members consumes lot of time.
2. Individuals do not escape responsibilities
– They are accountable for their acts and performance.
– In a group, it is not easy to hold any one person accountable for a
wrong decision.
3. Individual decisions are more focused and rational as
compared to group.

33. Cons of Individual Decision Making
1. Groups are more potential of collecting information
compared to an individual while making decisions.
2. Groups have many members, many views and many
approaches and hence better decision making.
3. Groups discover hidden talent and core competency of
employees of an organization.
4. Groups will take into account interests of all members, unlike
individuals.

34. Plan of talk
 Introduction
 Needs of decision making
 Individual decision making
 Corporate decision making
– Type of decision
– Type of organization
– Level of management
 Conflict resolution and decision making
 Decision makers and the zero sum game
 Steps in decision making process

35. Corporate Decision Making
Types of Decisions

36. Types of Decisions
 Corporate decision making happens at various levels in
organizations, it can be:
1. Top down
2. Bottom up

37. 1- Top Down Decision Making
 Top down decision making is done at the higher levels of the
hierarchy, then decisions are passed down the corporate
ladder to be implemented, e.g.;
1. Realms of policy
2. Strategic focus
3. Direction in which the organization has to proceed

38. 2- Bottom Up Decision Making
 Bottom up decision making is done by giving autonomy to
middle and first line managers to take decisions based on the
conditions and circumstances existing in their teams.
1. Day to day running of the teams.

39. Top Down Vs. Bottom Up
 We would consider whether top down decision or bottom up
decision making is effective.

40. Cont. …
 Top down decision making is akin to someone sitting on top
of a tree telling those at the bottom about how best to take
care of the garden on the ground.
 Bottom up decision making is akin to those at the bottom
deciding on how best to tend the garden and ensuring that
the other trees grow to the same height as well.

41. Cont. …
 The point here is that top
down decision making is
becoming redundant in these
days when autonomy and
decentralization are the norm.

42. Top Down Decision Making
 It is important to realize that “not all decisions can be made
by those at the middle or lower levels of the corporate
hierarchy”
 Decision making pertaining to organizational policies, firm
wise strategy and customer acquisition and customer
relationship management has to be done from the top, since
the view from the top is unhindered as well as the top
management having the experience and the foresight to take
such decisions.

43. Cont. …
 There are many instances of decisions taken at the top that
were not actualized and implemented properly because of
incoherent communication and inconsistent transmission.

44. Bottom Up Decision Making
 Employees at the bottom have a better understanding of the
ground realities than those at the top.
 Bottom up decision making works well when the day to day
running of the teams and divisions are concerned.
 It does not work well in cases of strategic acquisitions and
firm wide policy making that is best left to the top
management.

45. Cont. …
 There are many decisions that have been taken by the middle
and lower levels that lack the experience and foresight not to
mention the strategic depth which have resulted in short term
thinking.

46. Conclusion
 The bottom line requirement for any decision making process
is “how much benefit that the decision brings to the firm as
opposed to the costs incurred in such decision making”.
 If the benefits far outweigh the costs, then decisions can be
done in top down or bottom up manner with outcomes that
are favourable to the whole organization.

47. Corporate Decision Making
Types of Organizations

48. Decision Making & Type of Organization
Which decision making type is better?
 It depends on the type of organization.
 Organizations in the services sector operate in more
democratic ways (bottom up) when compared to the firms in
the manufacturing sector (top down).
 The nature of work is different in these two sectors.

49. Cont. …
Manufacturing sector
 It is all about set routines and machines.
 Instructions have to be sent from the top since the decision
making as well as the implementation operates in linear ways.

50. Cont. …
Services sector
 It is driven by complexity and non-linearity.
 Decision making has to be done according to the needs of the
situation and the players involved in the decision making
process have to act in ways that maximize their benefits from
the decision.

51. Corporate Decision Making
Level of Management

52. Middle Management & Decision Making
 The middle management is often called the “sandwich” layer,
as they;
1. Have to implement the decisions made above .
2. Have to communicate decisions to the lower levels.
3. Have to decide about how to run the teams.

53. Cont. …
 The implementation of any corporate decision is strictly
critical, since the best laid plans of the top management can
go awry in case there is no commitment from the middle
management.
 Many organizations organize “off site meetings” at resorts and
other places where the senior management briefs the middle
management about decisions that they have taken and how it
would impact the organization.

54. Power Centers & Decision Making
 Corporate decision making may by consensus or may be not.
 Like in the real world, corporations often have power centers
and groups that have their own agendas and hence arriving at
a consensus can be cumbersome for the CEO or the Chairman
of the Board of Directors.
 It is because of this reason, many corporations witness
periodic restructurings with regards to organizational
structure and with regards to turnover among the top
management.

55. Leader & Decision Making
 Many organizations thrive on leaders who have a “halo”
around them and hence decision making is smooth.
 This is because the rival power centers often concede to the
leader’s charisma, ability and vision.

56. Conclusion
 In conclusion, corporate decision making is successful as long
as there is a “glue” to bind the organization together in the
form of charismatic leaders or an organizational culture that
values coherence and imposes stability.
 Once any of these conditions are removed, then the
organizations fall into a self-defeating trap, wherein the
process of corporate decision making is impaired leading to
the loss of competitiveness of the company.

57. Plan of talk
 Introduction
 Needs of decision making
 Individual decision making
 Corporate decision making
– Type of decision
– Type of organization
– Level of management
 Conflict resolution and decision making
 Decision makers and the zero sum game
 Steps in decision making process

58. Conflict Resolution and
Decision Making

59. Conflict Resolution and Decision Making
 Any decisions should take into account the conflicting needs
of all individuals who are affected by the decisions.
 This conflict resolution should be considered as a part of the
decision making process.

60. Cont. …
 How well conflicts are
resolved depends on the
skill and leadership traits of
the decision maker.

61. Cont. …
 Consensual decision making
ensures that most concerns of
different groups are heard and
taken into account.
 In the real world organizations,
decision making by consensus
might not be feasible since
each group has its own
agendas.

62. Cont. …
 Decision makers have to ensure that
their decisions would involve;
1. Some amount of consultation.
2. Some amount of overriding the
individual agendas.

63. Cont. …
 Decision makers have to put in consideration individual
concerns, groups interests as well as interests of the
organization and proceed accordingly.
 This is needed to prevent individuals and groups hijacking the
decision making process with their agendas.

64. Cont. …
 Conflicts are inevitable when decisions are taken.
 The best way to deal with conflicts is to resolve them to the
satisfaction of all parties.
 It takes quite a bit of skill and managerial abilities not to
mention leadership traits to ensure that the decisions result in
amicable settlements among the competing groups.

65. Cont. …
 While it is not possible to please everybody, it is possible to
give them a fair hearing.
 Decision maker has to be patient with conflicting parties and
try to give them an impression of consensual decision making.
 In extreme cases when the competing groups do not agree or
abide with the decision, it is left to the higher-ups in the
organization to play the role of peacemakers.

66. Plan of talk
 Introduction
 Needs of decision making
 Individual decision making
 Corporate decision making
– Type of decision
– Type of organization
– Level of management
 Conflict resolution and decision making
 Decision makers and the zero sum game
 Steps in decision making process

67. Decision Makers and
The Zero Sum Game

68. Decision Makers and the Zero Sum Game
 Decision making should not be a
zero sum game “where one party
benefits at the expense of the
other”.

69. Cont. …
 It is common in many organizations
for decision makers to favor one
group over the other which results
in a situation where one group wins
and the other group loses.
 “The zero sum game” indicates that
decisions are taken to benefit one
group over the other.

70. Cont. …
 There should be an alternative to
this situation, where decision making
is done to produce synergies instead
of loosing one group.
 This synergies result when decision
making is carried out in such a way
that the eventual decision takes into
account needs of all groups.

71. Cont. …
 The vision and leadership qualities of the decision makers play
an important role in determining whether decisions result in
zero sum situations or whether they result in everybody
winning.

72. Cont. …
 When decision makers take decisions based on their innate
vision and leadership abilities, the result is that all parties are
winners.
 This is the scenario where statesmen and leaders often take
decisions by persuading the parties with their charisma and
personality.

73. Plan of talk
 Introduction
 Needs of decision making
 Individual decision making
 Corporate decision making
– Type of decision
– Type of organization
– Level of management
 Conflict resolution and decision making
 Decision makers and the zero sum game
 Steps in decision making process

74. Steps in Decision Making Process

75. Decision Making Process
 Being able to take a good decision is important for everyone,
whether you are a student, a teacher, a manager, a principal, a
president, a leader etc.
– A student has to take decisions about his career.
– A president has to take decisions regarding his country’s benefit.
– A manager has to take decisions regarding his company and likewise
the leader of any institution.

76. Cont. …
 The meaning of decision in Latin
is to ‘cut off’.
 This means that from all the
available alternatives, you choose
one thing and then cut off from
all the other alternatives.
 Choosing the right option from all
the available alternatives is very
hard to do.

77. Cont. …
Decision making process requires;
1. Thinking process
– It allows you to judge each and every thing.
2. Time
– Taking too little time to take decisions or taking too much time to
execute your decision can cause many problems for you.
3. Knowledge and past experiences
– If you have knowledge, you can find out different alternatives for the
problem faced.
– Making decisions without having proper knowledge about the
problem can cause difficulties.

78. Decision Making Process Involves the
Following Steps:
1. Curious observation
2. Existence of problem
3. Goals & planning
4. Search, explore & gather the evidence
5. Generate creative & logical alternative solutions
6. Evaluate the evidence
7. Make the educated guess (hypothesis)
8. Challenge the hypothesis
9. Reach a conclusion
10. Suspend judgment
11. Take action

79. Cont. …
 Whether the problem is big
or small, these steps show
the right path to solve your
problem and will lead you
towards progression.

80. Curious Observation
First Step in Decision Making Process
 These two words, the curiosity and observation are very
important for a decision making process.

81. Curiosity
 Curiosity means the desire
to know or learn about
something.

82. Cont. …
 A person who is curious does not
accept anything easily. He always
has skepticism towards everything.
 The curious people always ask
questions and try to search the
answers for their questions.
 Being curious can help you in taking
proper decisions.

83. Cont. …
How curiosity helps in decision making process?
 It makes you identify situations in which decisions has to be
made on the spot or in the future.
 It stimulates other processes that help you in decision making
like:
– Questioning, inquiring about things, experimentation, visualization,
skepticism, evaluation, identification of different patterns, imaginative
thought, logical reasoning, prediction, inference etc.
 All these processes will lead you towards appropriate
decisions.

84. Cont. …
Hoe to improve your curiosity?
1. Reading newspapers, magazines, books etc.
2. Indulge yourself in discussions with family and friends.
3. Attend different exhibitions and conventions.
4. Try to make a habit of questioning about everything and not
accepting each and every thing as a fact.

85. Observation
 Observation means “the ability to
notice significant details” or “the
process of observing different
things in order to gather
information”.

86. Cont. …
 Observation helps you to identify every significant detail
regarding your problem and its solution.
 It is important that you closely observe everything related to
your problem.
 Note down each and every details that you have gathered
through your observation.

87. Cont. …
 If you are running a company and you
have to take a decision which is “from
which supplier you will buy your
products?”
– The first thing that will help you in decision
making is through observation of the sample
products.
– Through observation you can analyze the
quality of product and then by following the
further steps of decision making you can
take a better decision for your company.

88. Curious Observation
 Curious observation makes decision process easy and
effective.
 During the decision making process, don’t stop your thinking
process and think over the problem again and again.
 Set your thought free and try to improve your thinking skills.
 Imagine and visualize the whole scenario in your mind so that
you can predict the outcome of your decision.

89. Cont. …
 Curiosity during the decision making process will lead you to
dissatisfaction, and dissatisfaction will lead towards
improvement in your decision making abilities.
 This first step of curious observation is very important step
and a good decision maker always follows this step.
 Implement this step in your decision making process and get
good outcomes.