OB 2nd Assignment

8/3/2019 OB 2nd Assignment

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What factors do you think differentiate good decision

makers from poor ones? Relate your answer to the six

step rational model

DECISION MAKING IN ORGANIZATIONS

INTRODUCTION

Managers within organizations make decisions and permeate everything an

organization does. Decisions are the means by which organizations turn ideas

into action and can have a positive or a negative impact. The conditions underwhich decisions are made in organizations is shown on the following diagram:-

Level of ambiguity and chances or making a bad decision

Lower Moderate Higher

Types of Decisions Made in Organizations

A choice made from among a set of alternatives is a decision. Decision making is

the process of identifying alternatives, evaluating alternatives and selecting analternative. Organizational decisions can be described in terms of two

dimensions:-

Whether they are programmed or nonprogrammed and

Whether they are made under conditions of certainty, risk or uncertainty.

The Decision Maker

Faces Conditions of

Certainty Risk Uncertainty



Programmed and Non-programmed Decisions

The degree to which decisions are programmed depends upon the number of

times sikilar decisions have been made in the past

1. Programmed Decisions are decisions that occur often enough in an

organization that standardized rules are used to make them. These

standardized rules can take the form of decision guidelines, standard

operating procedures or check lists. Programmed decisions help ensure

that tasks are performed smoothly and consistently.

2. Non-Programmed Decisions are decision that occure infrequently

enough in an organization that standardized rules cannot be used to makethem. When making non-programmed decisions, managers must rely on

their experience and intuition. Decisions about new products or building

new manufacturing facilities are examples of non-programmed decisions.

Certain, Risky and Uncertain Decisions

The following figure illustrates how to distinguish among certain, risky and

uncertain decisions.

1. If at the time a decision is made only a single outcome is likely, thedecision is certain. Certain decisions are “sure things”. Organizations

rarely make decisions under conditions of certainty through some

decisions come close.

2. If at the time a decision is made, the probabilities of several alternative

outcomes are known the decision is risky. For risky decisions several

different outcomes are possible and the probability of each outcome‟s

actually occurring is known. Many organizational decisions are made

under conditions of risk

3. If at the time a decision is made, the range of possible outcomes is notknow and the probability of these different outcomes‟ occurring is not

known the decision is uncertain.

These decisions are among the hardest to make because managers do not know

that the outcomes might be. Managers make then because they believe the



chosen course of action is the right thing to do. Managers try to make uncertain

decisions succeed by marshalling the organization‟s resources.

RESPONSIBILITY FOR DECISION MAKING

Different types of decisions are made at different levels in the organizationalhierarchy. Generally top managers make both non-programm4ed decisions and

risky and uncertain decisions. Middle managers oftern hae the task of

transforming non-programmed decisions into programmed ones and

transforming risky decisions into certain ones. Lower-level managers generally

make programmed and certain decisions.

THE DECISIONS MAKING PROCESS

The steps in the decision making process are identifying alternative, evaluating

alternatives and selecting from among alternatives. The classical model of

decision making provides the logic for much decision making. Behavioral aspects

of decision making create deviations from this approach.

The Rational Decision-Making Model

Rational decision making keeps the decision maker focused on facts and logic

and helps guard against inappropriate assumptions and pitfalls. The approach is

aimed at:-

Obtain complete and perfect information

Eliminate uncertainty

Evaluate all information rationally and logically

The output from this process is to produce a decision that best serves the

interests of the organization. The six stops in the classical decision making

model are:-

1. Recognizing the need for a decision: Decision making is necessarywhen there is a gap between the actual state of the organization and the

desired state.

2. Diagnosing the Problem: Diagnosis allows managers to understand why

a gap between actual and desired states exists. In diagnosing the problem,

managers usually collect data and information about each plausible

explanation for the gap.



3. Developing alternative: Only after identifying the cause of a problem can

an organization begin to develop alternative solutions. According to

classical decision making theory all possible alternative solutions should

be explored.

4. Selecting Alternatives: Managers must decide which alternatives toimplement optimal solutions are alternatives that address a particular

problem in the most complete way possible but a lowest cost.

5. Implementing Alternatives: Implementation occurs when the ideas and

principles represented in a decision are actually put into operation by

organizational members.

6. Exercising Control and Follow up: Classical decision making is

completed only when organizations exercise control and follow-up.

BEHAVIOURAL ASPECTS OF DECISION MAKING

The classical decision making model is very logical, very linear, in its approach.

Limits on the information process capacities of decision makers sometimes make

it impossible to use the classical model. Moreover, decision making in

organizations is oftern influences by a variety of social and psychological

phenomena. The administrative model describes how decisions often actually

are made based on the assumptions that managers have incomplete and

imperfect information are constrained by bounded rationality and ten to satisfiedwhen making decision.

1. Bounded rationality describes the limited capacity of decision makers to

process information. Most organizational decisions are made under

conditions of bounded rationality. In general the more complex decision is

or the longer time frame of knowing the consequences, the more decision

makers are limited by bounded rationality.

2. Optimizing is searching for optical solution, satisfying is searching for

satisfactory solutions. Typically organizations search not for optimal

solutions but for satisfactory solutions. Costs and time factors are

considered as organizations decide whether to satisfied or optimize.

3. Three powerful social and psychological factors limit the application of

classical decision making is organizations. Escalation of commitment is a

psychological pr5cess whereby decision makers become increasingly

committed to their chosen course of action even as the ineffectiveness of



that action becomes more apparent. Organizational politics is a set of

individual or group activities carried out for the purpose of acquiring,

developing and using power to influence the outcomes of decisions.

Managerial intuition is the ability of decision makers to make successful

decisions while drawing on incomplete, inconclusive and contradictoryinformation.

GROUP DECION MAKING

Any decision making process that is performed by the several individuals is

group decision making.

Advantages of Group Decision Making:

Including more individuals in the decision making process can increase the

amount of information and experience available. Group decision- making tends togenerate more alternatives, possibly allowing the organization to optimize more.

Communication and understanding are also increased when group decision-

making is used. This, in turn, increases the likelihood of the decision‟s being

accepted and supported.

Disadvantages of Group Decision Making

The amount of time needed for making a group decision is a bing drawback.

Group decision making can also force compromises when strong, decisive

actions might be needed, finally, group decision making can encourage

groupthink, which is a phenomenon that emerges in a group when the group

members‟ desire for consensus and cohesion outweighs their desire to make the

best possible decision.

TECHNIQUES FOR GROUP DECION MAKING

Several specific group decision making techniques can be employed by

organizations.

1. Interacting Group Techniques: An interacting group is a decision

making group in which members openly and freely discuss, argue about,

or agree on the best alternative. It is the least structured of the group

techniques.

2. Nominal Group Technique: More structure than the interacting group is

the nominal group. Group members do not talk freely with another. A group



leader facilitates the decision process by describing the decision situation

and asking for input from the participants. Alternatives are ranked and a

decision is chosen.

3. Role-assigning Technique: The role assignment approach lies between

the extremes of the interacting and nominal group techniques. Twoparticularly important roes are the devil‟s advocate and the group

facilitator. The responsibility of the group facilitator is to ensure that every

group member feels free to express opinions, even controversial ones and

that no one person dominates the group.

4. A Delphi Technique: This is used for developing a consensus of expert

opinion. The Delphi procedure solicits input from a panel of experts who

contribute individually. Their opinions are combined and averaged. These

results are feedback to the experts and the process continues until a

solution is reached.

HISTORY AND COMPANY PROFILE

Pakistan Telecom Mobile Limited (PTML) is a wholly owned subsidiary ofPakistan Telecommunication Corporation Limited (PTCL) that started itsoperations in January 2001 under the brand name „Ufone‟. As a result of PTCL‟s privatization, Ufone became a part of the Emirates TelecommunicationCorporation Group (Etisalat) in 2006.

Since its inception, Ufone has focused on the people of Pakistan, empoweringthem with the most relevant communication modes and services that enablethem to do a lot more than just talk, at a price that suits them the most. Alongwith the claim of lowest call rates, clear sound and best network, Ufone offers itscustomers simplified tariffs with no hidden charges. With a strong and uniquelyhumorous communication direction that has now become Ufone‟s signatureacross all advertising media, Ufone gives its customers many reasons to smile.

This customer focus and best offering has allowed Ufone to build a subscriberbase of over 20 million in less than a decade. Ufone has network coverage in10,000 locations and across all major highways of Pakistan. Ufone currently

http://www.ptcl.com.pk/

http://www.etisalat.ae/

http://www.etisalat.ae/

http://www.ptcl.com.pk/



caters for International Roaming to more than 260 live operators in more than150 countries. Ufone also offers Pakistan‟s largest GPRS & BlackBerry Roamingcoverage available with more than 150 Live Operators across 105 countries.More recently, Ufone has become a focused and intensive leader in VAS,constantly introducing innovative services, which have been the first of their kind

in the Pakistani cellular industry.

MISSION STATEMENT

“Our mission is to provide best services with best coverage that would

eventually generate profit for the company and its stakeholders”

GROWTH RATE

As mobile users in the country have reached over 28 million at a very rapid

pace, Ufone has maintained itself as the 2nd largest cellular operator in Pakistan

with a subscriber base of around 6.5 million and a market share of nearly 25%.

Ufone has seen a subscriber growth rate of over 200% in the last year, and since

the start of 2005 Ufone added nearly 5 million subscribers onto its network. A

remarkable achievement indeed, especially considering the fact that two new

international players also intered into the market in 2005. Subsequently the

growth in subscriber base caused a healthy trend in revenues which has

doubled.

Role Of Ufone Managers in Decision Making

Decision making is nonlinear, recursive process. That is mose decisions are

made by moving back and forth between the choice of criteria(the characteristics

we want our choice to meet) and the identification of alternatives (the possibilities

we can choose from among). The alternatives available influence the alternatives

we will consider.

There will always to some risk – some cost of failure – when taking decisions.

These risks can be reduced, but no eliminated, by following these steps when

taking decision. These steps are sometimes called the decision making process.

1. Establish the Objectives of Organization



It is not possible to take good decision unless it is clear what the aims of the firms

are.

2. Identify and Analyse the Problem to be Solved.

All decision are taken to solve a problem. In our examples above, Jonas had theproblem of how to spend the next few years of his life. Paul had the problem how

top most profitably use a plot of land. Manager needs to know what they are

trying to solve before deciding on a solution. For example sales manager is

worried about falling sales. The decision is taken to lower prices. This has not

effect on demand but lowers the firm‟s profit margin. Only later does the manager

discover that sales fell due to advertisement not appearing in paper when they

were planned to. The wrong decision had been taken. The problem had not been

correctly analyzed.

3. Collect Data on All the Possible Alternative Solution

It is too easy to jump at the first solution thought of mamangers must collect data

about all possible options before making afinal choice. This data must include the

limits (or constraints) on what is possible. There is no point in suggesting that the

business stores should open all day on Sunday, to boost sales, if this is actually

against the law.

4. Implementing Decision

Make the final decision and put it in to effect. This is called implementing

decision. The manager‟s job is not finished even when this has been done. It is

important ot check to see that the decision has been put into effect and that it is

working according to the plan.

5. Review and Evaluation of the Decision

Look back to see whether the right decision was made. This is called review and

evaluation of the decision. This is sometimes very hard to do especially if the

wrong decision was made. But by looking back and evaluating what happened,lessons for the future can be learned.

The Components of Decision Making

The Decision Environment



Every decision is made within a decision environment, which is defined as the

collection of information, alternatives, values and preferences available at the

time of the decision. An ideal decision environment would include all possible

information, all of it accurate and every possible alternative. However, both

information and alternatives are constrained because the time and effort to gaininformation or identify alternatives are limited. The itme constraint simply means

that a decision must be made by a certain time. The effort constraint reflects the

limits of manpower, money and priorities. (You wouldn‟t want to spend three

hours and half a tank of gas trying to find the very best parking place at the mall).

Since decision must be made within this constrained environment, we can say

that the major challenge of decision making is uncertainty and a major goal of

decision analysis is to reduce uncertainty. We can almost never have all

information needed to make a decision with certainty, some most decision

involve an undeniable amount of risk.

The fact that decisions must be made within a limiting decision environment

suggest two things. First, it explains why hindsight is so much more accurate and

better at making decisions that foresight. As time passes, the decision

environment continues to grow and expand. New information and new

alternatives appear even after the decision must be made. Armed with new

information after the fact, the hindsight can many times look back and make a

much better decision that the original maker, because the decision environment

has continued to expand.

The second thing suggested by the decision within an environment idea follows

from the above point. Since the decision environment continues to expand as

time passes, it is often advisable to put off making a decision until close to the

deadline. Information and alternatives continue to grow as time passes so to

have access to the most information and to the best alternatives, do not make

the decision too soon. Now since we are dealing with real life, it is obvious that

some alternatives might no longer be available if too much itme passes; that is a

tension we have to work with, a tension that helps to shape the cutoff date for the

decision. Delaying a decision as long as reasonably possible, than, provides

three benefits:-

1. The decision environment will be larger, providing more information. There

is also time for more thoughtful and extended analysis.

2. Now alternatives might be recognized or created.



3. The decision maker‟s preferences might change. With further thought,

wisdom and maturity, you may decide not to buy car X and instead to by

car Y.

Manager is considered as the “Boundary Spanners” because managers play a

vital role in an organization. The success of any organization depends on the

strategies of the manager of that organization. In any successful organization

managers always remain in search of finding the way to accomplish his specific

purpose. Managers not only work in favorable environment but also handles the

unfavourable conditions of that organization because he has to face a number of

internal and external factors hich affect directly the goals of that organization.

Therefore managers are considers as boundary spanners. Different organization

have different environment (many organization influenced by the following

external factors which impose the uncertainly).

1. Customers

2. Competitors

3. Suppliers

4. Government

5. Pressure Group

6. Political

7. Economics Conditions

CHALLENGES FACE MANAGEMENT

Ufone face many challenges with the ever growing needs of telecommunication.

It must remain profitable with the decreasing economical situation if Pakistan. It

must grow as well in these dark times if it has to remain IN the market. Ufone

face very strong competition from its competitors. It must offer lowest rates with

better quality service. New features and services should be introduced to make

its customers loyal, happy and satisfied.

STRUCTURE OF THE ORGANIZATION

In Ufone the hierarchy is very lean, in general the whole setup is centralized, all

the matters are to be reported to the main company and all the policies and

targets are approved. At the higher level. But at the department level the

structure is decentralized. Ufone has following functional departments:-



Technical

Customer Operations

Finance

Administration & Procurement

Human Resource Coordination (Govt. Relations)

Marketing

Current CEO & President of UFone is Mr. Mubashir

UFone‟s Head office is in F-7 Markaz, Islamabad.

SWOT ANALYSIS

SWOT analysis is an overall evaluation of the company‟s Strength. Weaknesses,

Opportunities and Threats.

STRENGTH

Strengths include internal capabilities, resources and positive situational factors

that may help the company to serve its customers and achieve its objectives. The

strengths of Ufone are as follows:-

Ufone‟s differentiation is its biggest strength. Ufone offers lowest off-net

call rates that differentiate it from its competitors.

Ufone is offering more and better Value Added Services (VAS) than its

competitors e.g. Walkie Talkie.

WEAKNESSES

Weaknesses include internal limitations and negative situational factors that may

interfere with the company‟s performance.

The weaknesses of Ufone are as follow:-

Ufone has less professionalism within the organizational members



As Ufone is a subsidiary of PTCL, which was formerly under government

management, Ufone still has a shadow of a government organization.

OPPORTUNITIES

Opportunities are favourable factors or trends in the external environment that

the co9mapny may be able to exploit to its advantage.

UFone has following opportunities in its way:-

Ufone‟s biggest opportunity lyng ahead in near future is the phase of

conversion of their GM technology into 3G (satellite based) technology.

THREATS

Threats are unfavourable external factors or trends that may present challenges

to performance.

CONCLUSION

By keenly analyzing the marketing of UFone, we group member agree that Ufone

is not a safe player in the market. It is penetrating its market by taking risks and

aggressively promoting and advertising itself. It holds second largest market

share and is seeking to become the market leader anyway possible. We came

through very unconventional strategies and ad-campaigns while working on this

report. We believe that mobile services are the toughest market to enter and

survive. And iun this tough market UFone isn‟t only surviving but grouwing at an

exceptional rate. Ufone is using humorous theme in its adds. Which has become

its benchmark. People enjoy watching, discussing and following Ufone ads the

most. And it is the biggest achievement of Ufone in recent times. We wish a very

best of luck to Ufone. May it progress in this field and achieve its desired goals

(AMEEN).

OB 2nd Assignment

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