MANAGEMENT PRINCIPLES

AND APPLICATIONS

RATIONAL DECISION MAKING

PROCESSBY-MAYANK

WHAT IS DECISION MAKING ? “ WHATEVER A MANAGER DOES HE

DOES THROUGH DECISION MAKING ”

Decision making is the process of identifying and selecting a course of action from a set of alternative courses of action, which is thought to fulfill the objectives of the decision problem more satisfactory than the others.

Firstly recognize that a problem exists and it must be solved. When a problem has been correctly identified, it needs to be diagnosed. Diagnosing requires that management should understand the problem in relation to higher level objectives of the organization. It should also identify the gap between the existing situation and the situation expected to emerge.

The next step is developing alternatives. There would not have been any necessity of making a decision if there had been no

alternatives.

Then the pros and cons of each alternative is analyzed and evaluated. The evaluation should be done in terms

of both tangible (risk involved, financial implications) and intangible factors (public relations, corporate image,

employee morale).

Selecting the most appropriate alternatives

After evaluation of alternatives select the one which can best solve the problem.

The selection of appropriate alternative does not means an end of the process.

After the alternative is selected, it must be implemented.

The last step is to evaluate the decision. If the feedback is negative the

process cycle is back to its first stage.