Wednesday, December 1, 2010

DECISSION MAKING

Decision making is defined as the selection of course of action from among
alternative. It is the core of planning. A plan cannot be said to exist unless a decision
has been made.
Managers sometimes see decision making as their central job because they must
constantly choose what is to be done, who is to do it and when, where and how it will
be done. Decision making is the part of planning and everyone’s daily living.

RATIONAL DECISION MAKING;
It is the rational decision making that goals cannot be attain without action.
People acting or deciding rationally are attempting to reach some goal that cannot be
attained without action. They must have a clear understanding of alternatives. Thy
must have ability and information to analyze and evaluate alternatives in order to
achieve goals. Finally they must have desire to come the best solution by selecting
alternative.
STEPS IN DECISION MAKING
There are three steps in decision making.
1- THE SEARCH FOR ALTERNATIVES.
The first steps of decision making are to develop alternatives. There are almost
always alternatives to any course of action. If we think of only one course of action,
clearly we have not thought hard enough.
The ability to develop alternatives is often as important as being able to select
correctly from among them. One of the other hand ingenuity research and common
sense will often unearth so many choices that all of them cannot be evaluated. The
manager needs help in this situation, and this help can be solved by decision making.
2- EVALUATION OF ALTERNATIVES.
When an appropriate alternative has been found, the next steps in planning one best
alternative to achieve the goals. There are three ways of evaluated decision making.
1- QUANTITIVE AND QUALITIVE FACTOR
Quantitative factor can be measured in numerical terms. This factor is vary important
but the success of the venture would be endangered qualitative factors were ignored.
Qualitative factor are those that are difficult to measure numerically such as the
quality of labor relations, the risk of technological change etc.
2- MANAGERIAL ANALYSIS
In evaluating alternatives managerial analysis is very important. Marginal analysis
can be used in comparing factors other then costs and revenue. For example to find
the best output of a machine, inputs could be varied against outputs until the
additional input equals the additional output.
3- COST EFFECTIVENESS ANALYSIS
Cost effectiveness analysis seeks the best ratio of benefits and costs. For example
finding the least costly way of reaching objectiveness is a technique for choosing the
best plan.
SELECTING AN ALTERNATIVE
During the selection among the alternatives, managers can use three basic approaches
(1) Experience (2) Experimentations (3) research and analysis.
Bases for selecting from among alternatives
EXPERIENCE
Reliance on past experience plays a larger part in decision making to some extent,
experience is the best teacher. The very fact that managers have reached there
position appears to justify their past decisions. Moreover, the process of thinking
problems through making decisions and seeing programs succeed or fail.
EXPERIMENTATION
One way of deciding among alternatives is to try one of them and see what happens.
Experimentation is often used in scientific theory. The experimental technique can be
most expensive, especially if a program requires heavy expenditures firm cannot
afford to attempt several alternatives.
RESEARCH AND ANALYSIS
One of the most effective techniques for selecting from alternatives is research and
analysis of decisions. This approach means solving problems by first comparing it. It
is pencil and paper approach to decision making

Ditulis Oleh : Naz Nazir // Wednesday, December 01, 2010
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