Concept of Decision making
Decision making is the core of planning. Decision making is the central job of all the managers because they are always concerned with the problems like who is do it, what is to be done, how is it to be done, and when and where. Decision making is an important process to reach a decision, the decision-making process does not only help our management function its help our career but life decision also. It is a process by which an individual or an organization selects one position from several alternatives.
Process of Decision making
The following is the process followed in making decisions in a normal situation:
Identification of a problem: the 1st step in decision making is to visualize the problem clearly. It is said that a well-defined problem is half solved. The problem may be financial, technical, or marketing related. Generally, these problems arise due to shortage, depression, competition, changing patterns, etc.
Diagnosing the Problem
The next step is Diagnosing the Problem. It is necessary to isolate the specific problem in relation to which the decision has to make. This will be certainly giving a better understanding of the problem to a decision-maker.
Analysis of the problem
Analysis of the problem is a very important part of this process. The problem should be well analyzed with reference:
The nature of the decision-whether routine.
The decision on the function of the organization.
The periodicity and futurity of the decision.
it is necessary data should be collected from all the possible sources, both externally and internally. These data should be processed statistically in order to draw inferences and make conclusions.
Identifying the alternate courses of action
It means have alternative uses, similarly, one end can be achieved in different ways. This diversity on both sides leads to a number of permutations and combinations.
Evaluation of alternatives
The following criteria for the evaluation of possible alternatives.
Urgency of decision
Cost, time, and efforts involved in each alternative.
Limitations of physical, financial, and human resources.
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