BY

SIYACHI IYER

A process by which a course of action is selected as the way to deal with a specific problem. or

The process of responding to a problem by searching for and selecting a solution or course of action that will create value for organizational stakeholders.

Problem solving and decision making are Inter-related. Problem-solving provides the basis for decision-making.

Decision-making is done at all levels and precedes every managerial function.

Managers must engage in problem-finding process.

Both problems and opportunities require decision-making.

There are basically two kinds of decision that managers called upon to make:

1- Programmed decision A repetitive decision the can be handled by a

routine approach. 2- Non-programmed decisions Decision that are unique and nonrecurring. Decision that generate unique responses.

Structured problems: Involved goals that clear. Are familiar(have occurred before) Are easily and completely defined-

information about the problem is available and complete.

Unstructured problems: Problems that are new or unusual and for

which information is ambiguous or incomplete.

Problems that will require custom-made solutions.

Charecteristics Programmed decisions

Non programmed decisions

Types of problems Structured Unstructured

Managerial level Lower level Upper level

Frequency repetitive new

Information Readily available Ambiguous or incomplete

Time frame for solution

short Relatively long

Solution relies on Procedures, rules & polices

Judgment & creativity.

Define the problem

Evaluate alternatives

Implement the chosen alternative

Gather facts and develop alternatives

Select the best alternative

Follow up and evaluate the chosen alternative

Identify a problem and decision criteria and allocating weights to the criteria.

Developing, analyzing, and selecting an alternative that can resolve the problem.

Implemented and selected alternatives.

Evaluating the decision’s effectiveness.

features certainty risk uncertainty

1.Availability of information about future

Complete information is available

Information is available but may be incomplete

No information is available

2. Degree of reliability of information

high moderate low

3.Degree of predictability about future

high moderate low

4.Knowledge of probability of outcomes of decisions

known fairly known Not known

Dimensions of decision-making styles Ways of thinking Rational , orderly, and consistent. Intuitive, creative, and unique.

Tolerance of ambiguity Low tolerance: require consistency and

order. High tolerance: multiple thoughts

simultaneously

It focuses on what is important

It is logical and consistent.

It acknowledges both subjective and objective thinking and blends analytical with intuitive thinking.

It requires only as much information and analysis as is necessary to resolve a particular dilemma.

It encourages and guides the gathering of relevant information and informed opinion.

It is straight forward, reliable, easy to use, and flexible.

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