Decision Making1- Management study

INTRODUCTION TO DECISION MAKING

The field Of decision making is vast. There have been many approaches to managerial decision making.These have ranged from the strictly quantitative as typified by the methods of operations research -to those based on human and Organisational behaviour. It is only recently that those working in the area Of decision making have started to combine approaches that could cater to the multiplicity Of subjective and Objective factors, and the multiplicity of criteria and-Objectives -some in conflict with one another. 

            Decision making is an essential part Of management. Some have even suggested that. management 15 synonymous with decision making. Managers are decision makers and problem solvers. Whether a manager is involved in evaluating new Opportunities or eliminating long standing difficulties, decision making for management is essentially problem solving. The process of deciding is intimately related to the whole process of knowing (or cognition ). Knowing “what the problem is” will assist in deciding “what to do about it”. that us finding the best solution. This is basic for each individual personally and also for a professional manager, whose main orientation is towards the making of decisions There is always an implicit Opportunity loss associated with poor decisions. They are the foregone gains, profits or cost savings, which could have been realised had a better decision been made. 

        However the process by which one arrives at a decision is quite complex; in fact no one process can be applied to all decisions Over the decades, decision-making methods have evolved from primitive to supersophisticated, ranging from the instinctive/intuitive approach, to traditional precedent based approach, to the commonsense approach, to the scientific method: A decision involves many intuitive and deep-seated Cognitive mechanisms that cannot be observed fully or directly influenced. What can be influenced are the behaviour patterns, the analytical procedures and the sequence of logic that are followed 1n “making a decision Ideals, objectives and goals form the background against which decisions are made. 

            There are many types of decisions, some that are completely specified, some partly specified and many unspecified We shall discuss how computers have entered in decision aiding process, who all are the end users of the systems, the different types of decisions, the decision making process and the implications for the information systems analyst.

STRUCTURED DECISIONS

These structured decisions are those that can be programmed. They are essentially

repetitive routine and involve a definite pnocedure for handling them so that they do not have to be treated each time as if they were new. 

            It has been seen that in general at the lowest level in the organisation viz. the, Operational level and the managerial staff, deal mostly with such fairly well structured problem. In the past most successful applications of information systems have come in dealing with structured, operational and management control decisions. These fall realiy in the domain of transaction processing and it is for this reason that some researchers prefer to call such systems as TPS-Transaction Processing Systems, rather than MIS--Management Information Systems. 

        Thus structured decisions which are also called programmable decisions involve situations where the procedures to follow when a decision is needed can be specified in advance. Therefore such

decisions are structured or programmed by the decision procedures or decision rules develoed for them. structured decision could possibly involve what is known as a deterministic decision or an algorithmic (step y step procedure) decision. In this case, the outcome of a decision can be determined with certainty if a specified sequence of activities viz. the algorithm is performed. No doubt many decision situations do not all come under deterministic criteria. There might be probabilistic decision situations. Since, in this case enough probabilities about possible outcomes are known a decision can be statistically taken or determined with an acceptable probability of success.

Herbert A Simon stresses the programmable part of the structured decisions and“ accordingly terms ‘structured decisions’ as programmed decisions‘. In the programmed dccisions, a problem (or one very similar) occurs frequently enough so that a fixed routine or programme is established for solving its Programmed decision are in fact those that are made in accordance with some policy, rule or procedures so that they do not have TtTW handled de novo each time they occur. In fact these decisions are generally repetitive and routine and are obviously the easiest for managers to make It is for these reasons that such managerial problems are relegated to the supervisory level.The supervisors fall in the first entry ring of management It gives persons of this level the slight ‘kick’ or 'morale boost' as they have entered into 

‘ the management cateogry’. No doubt the perceptions will have to change since they have moved across from the worker/operator level to the other side of the table. Decisions implemented by the supervisors might feel elated, but when compared to managers at the higher levels, the supervisory level decisions are pretty straight forward and simple because of their structured nature. These decisions are in fact routine decisions and they require little deliberation from the top man’s point of view. 

        These routine decisions are taken against a familiar background in everyday business operations. Such decisions involve no extraordinary judgment, analysis or authority, since they are to traverse through more or less fixed avenues On account of the experience gained or because of the trivial nature of the problems on hand, management has already established a set of rulestolicies and procedures. With the organization's

Goals, policies and processes established, the routine decisions demand, on the part of managers, a power of selection of the best path as the 

connecting link between the given means and the established ends. 

               The structured decisions, often termed as programmed decisions, are labels that are derived from the Jargon of the computer field where a program is defined as a plan for the automatic solution of a problem. Programs are simply a string of instructions to accomplis an assignment. However, it is well known that all problems do not lend themselves to automatic programmed solutions. No doubt an information system analyst might be having his cherished dream of having all decisions in an organisation programmed or fully automatic. Then perhaps there would be no dividing line as regards variety of type of skills required by managers at various levels. You would recollect that studies have shown that more technical skills are required at the lower levels whereas more conceptual skills are required by managers at the higher levels, apart from human skills that are required at all levels of management.

       It has been seen that by far the greatest number of business decisions are repetitive and routine ones. If this is true, then there is an overriding need to automate or ' program these decisions so that managers and executives could delegate such problems to lower levels and have them made by one or more techniques of programmed decisions. It is interesting to note that in some cases even up to 90% of management decisions are routine ones. 

                Most programmed decisions are solvable by the ‘force of habit’. We go to our offices make decisions about the in-basket or in-tray correspondence, and take dozens of actions daily that are “programmed” through sheer-force of habit. In fact this is gained by ‘experience’ in an organisation. When ever there are turnovers, it is this valuable esperience that is lost, which could be quite costly. It usually takes time and money for newer recruits to acquire this experience. 

           The ‘force of habit' in fact leads to certain traditions, conventions and practices which might become a platform towards formal statement of rules, procedures, policies, etc. At this stage, it would be worthwhile to spend some time looking at what constitutes a rule, procedure or a policy. 

            A rule is a specific policy statement about the conduct of certain affairs. For instance a rule may state that any person who comes in late to work will face disciplinary action. it could be that if an employee is to start his office hours from 9.00 a. m. if he comes by 9.15 am he could be tolerated. Time between 9.15 a. m. to 9. 30 am could be allowed at best say thrice in a month. Anything beyond these limits would necessitate some disciplinary action. A rule is frequently used when confronting a well structured problem. Rules are usually rigid which might specifically tell about ‘dos and donts'. Rules are usually framed in a manner to take care of almost all situations. However, we do have instances where the rule applies ‘show me the man, I'll show you the rule’. You often hear the term that ‘rules are silent on this issue‘ Indeed rules are quoted again and again depending on what” is to be proved or  justified or rationalised in order to take the final decision.