11 DECISION-MAKING

Sarasvathi. V

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Introduction

 

Management occurs when there is some problem to solve, some choice to make. The various steps in the management process are really a series of decisions, each based upon the last. These decisions bring about change. Certain important questions now arise:

 

  • Does all management require decision-making?
  • Just how are decisions made?
  • Are decisions in daily living commonly made alone or in groups?
  • This chapter will consider these questions and also some aids in decision-making.

 

Decision Making is the process of choosing the best alternative for reaching objectives. It is the process of selecting one course of action from several alternative actions. It involves using what one knows to get what one want. To improve one’s decision-making skills, one needs to know himself, his values and his abilities. Values are one’s opinion about what is “right” or “good” or “valuable.” Values give meaning to one’s life by providing a basis for setting priorities—for deciding which goals or actions are more worthwhile and which ones are less important. Knowing family values helps the members of a family establish goals, make the necessary decisions and take the needed actions to meet their goals. The values of individual family members form the basis for the values of the family group, even though some individual differences and conflicts may have to be resolved. A decision may simply be defined as a choice among alternatives or the selection of and

 

commitment to a course of action. Decision making is a process consisting of the activities which result in the choice of an alternative or the commitment to a course of action. The very first factor involved in the definition of decision making is Process. Needless to say, decision making encompasses multiple processes such as thinking, memory, evaluation and making his mind up to take action. The second important criterion in the definition is Options and taking decisions without adequate options at bay may not prove to be very fruitful and apt. Hence, before jumping on to take any decision, consider the present position and where one wants to be and then look at the multitudes of ways to reach there.

 

The next crucial factor in the definition of decision making is Choices that are more often than not quite flustering and bewildering to make. Choices inevitably are restricted by several constraints and obstacles which make the process of making a particular choice all themore difficult. Lastly, the actions that are to be implemented after much considerations and deliberations form the concluding step to the definition. It is extremely important that the decisions taken are finally execute.

 

KINDS OF DECISIONS

 

Decisions are very important part in life; one takes decisions at every moment in daily routine. Types of decision making are determined by looking at the outcomes and the impacted entity. At the highest level decisions are categorized into three major types:

 

1.  Consumer decision making

2.  Business decision making

3.  Personal decision making.

 

In the decision making model, establishing the types of decisions makes it possible to identify the related decisions that will influence, constrain and be influenced and constrained by a specific decision. There are various types of decision making style. These can be categorized by the degree to which other people participate in the process. There is good evidence to support the argument for involving others in decision making. However, participation can also be a time consuming activity. When deciding on the most suitable decision-making method, it is important to consider that full participation is not required in every occasion. One cannot expect in a group all decisions is to be made by the entire group. According to the type of decision, a group might prefer different systems with more or less people involved. Traditionally, organizations count on three different types of decisions:

•   Strategic – relating to the identification of long-term or overall aims and interests and the means of achieving them

 

•   Organizational – relating to the way different aspects and parts of a group are arranged with the aim of being more orderly and efficient

 

•  Operational – relating to the way a group or organization works on a daily basis

 

Habitual decisions: The choices or decisions made out of “habit” without much deliberation or product comparison. Purchases made in this way are sometimes called habitual purchases, because these decisions are made so rapidly that they appear to be based on habit.

 

Technical decisions: These relate to the achievement of a single goal. Work simplification decisions are ordinarily technical decisions. Decisions that fall into this category are goal oriented. These decisions involve weighing the alternatives.

 

Economic Decisions: A decision about an economic issue is most commonly about how to allocate resources among multiple purposes. These decisions have two basic components: multiple goals and limited resources. Proper allocation of money resource plays an important role in economic decision making. One’s decision involves determining which goals and what resources are required. There are many resources other than money. Therefore all resources are involved in these decisions.

 

Social Decisions: It is directed towards goal attainment resulting from the utilization of resources, they occur through interaction between individuals .Everyone has been involved in many social decisions. Social decisions differ from economic decisions in several ways. The values, goals, and standards are involved

 

Legal Decisions: Within each spheres of interaction various rules, regulations, and policies (legal decisions) apply that pertain to one and his actions within society. One has to follow certain rules and regulations. He is also aware of the risk factors involved in not following these rules laid by.

 

Political Decisions: These decisions are made by a group of individuals whose major purpose is to function as a single unit. The emphasis here is placed upon the procedure of how the decision is made rather than the actual resolution of the problem or situation. Political decisions deal with how decisions are made by the group or individual involved. They are sometimes called procedural or structural decisions.

 

Individual and Group Decisions: One way to explore decision-making is to look at individual and group decisions and their differences and their similarities. While many decisions are primarily a personal or individual concern, others involve the whole family, club or group, the community and the broader society. Group members accept decisions more readily and carry them out more efficiently when they have been involved in the decision making process. Group decisions may be better if more alternatives are suggested and non productive options are identified

 

Group Decision Making: There are several models of group decision making that you can put to use. Two examples are consensus and consultation. Consensus decision making involves posing several options to the group and using the most popular option to make a decision. Consultation takes the opinions of the group into consideration when making a decision. Both methods require the group’s participation and call for a manager who respects the opinions and input of the group in the decision making process.

 

Steps in the Decision-Making Process

 

The solution of any problem is made up of steps or phases. The number of steps or phases proposed by different writers varies, but the elements are in common with the three steps suggested by John Dewey: (1) what is the problem? (2) What are the alternatives? (3) Which alternative is best? Although the parts or steps are not completely clarified, there is reasonable agreement on the existence of three of the five successive parts listed below; the first and fifth parts are not always included. The five steps or phases in the mental process of decision-making are:

 

1.  Defining the problem to be decided

2.  Seeking alternative solutions

3.  Thinking through alternatives

4.  Selecting an alternative

5.  Accepting responsibility for the decision

 

1.  Defining the problem

 

The first job in decision-making is the recognition that a problem exists and that finding and defining it is important. The first job in decision-making is the recognition that a problem exists and that finding and defining it is important. One authority has pointed out that all problematic situations must be carefully searched out and often constructed; another also considers such processes as intelligence activities.’ The evidences of the problem may first appear as symptoms. The most visible of these frequently hide the depths of the problem. At this stage in the solution of a problem, two things are essential. First, a desire to find the cause leading to the problem; and second, an unemotional and unbiased view of all the circumstances within the situation. The family’s value system is an important factor at this stage of decision making. Individual differences are apparent in problem identification.

 

2. Seeking alternatives

 

Managing resources requires a great deal of knowledge in seeking alternatives and recognizing the consequences of each. This knowledge must be quite specifically related to one or more of the resources, and the amount of knowledge available varies from resource to resource. Probably the largest stock of accurate information to be drawn upon relates to money or perhaps to food, and the smallest stock, to time. When seeking alternatives, ideally one should become aware of all possibilities. Practically, that is seldom if ever possible because of the limits of time and of experience. People are more conscious of this step in decision-making in some areas than in others .Experts in various fields has stressed the importance of having many alternatives in decision-making. Important as it is to have many alternatives, there is danger of confusion with a very wide variety of choices.

 

3. Thinking through alternatives

 

The next phase in decision-making, is mentally following through the consequences of each separate alternative, which brings its own difficulties. Again, ideally one should foresee all consequences, but that is not possible for various reasons. To begin with, the consequences lie in the uncertain future. It is uncertain partly because of the impossibility of foreseeing the external changes that might influence the working out of a particular alternative and partly because the individual’s feelings about it may change in the future. His anticipation may not produce the same feeling as reality will. This step in decision-making was described years ago by John Dewey in the colorful phrase “dramatic rehearsal,”

 

It takes time to find and explore all the possible pathways; and one way in which persons can be aided toward more effective “dramatic rehearsal” of alternatives is to make them see that the judgment process takes time. The popular phrase snap judgment suggests that the short time it takes to snap the fingers is not sufficient for making a wise decision. On the other hand, taking too much time interferes with the effectiveness of decision-making.

 

4. Choosing an alternative

 

The fourth stage in decision-making, namely, choosing one alternative of several, is the least understood of the stages. It is of course impossible to focus upon all known alternatives and their consequences at once. There is a limit to the number of separate items that the mind can grasp at one time, probably not over five or six. Hence if there are many alternatives they must be considered in groups.

 

5. Accepting the consequences of the decision

 

This step, not always included, is, however, fundamental. It leads the making of a decision into the more complicated managerial process. A type of consequence to be accepted that is not always recognized is the existence of “disagreement.” In relation to decisions, dissonance is a lack of agreement between the knowledge of and feelings toward the alternative selected and the knowledge and feelings about the alternatives not selected. In other words, there are usually, if not always, some things about the alternatives not selected that are attractive and desirable and some things about the alternative selected that are not desirable. The more important the decision, and the more different the appeals of the various alternatives, the greater is the dissonance. Where dissonance exists there is unrest and usually some effort to reduce it.

 

Importance of Knowledge in Decision-Making: It is not enough to know the technique of making a decision. Especially in steps 2 and 3, knowledge about what is being decided is essential. As stated above, finding alternatives (step 2) cannot be accomplished with-out knowledge. The Knowledge needed in step 3 is the degree or amount of it possessed in relation to (1) the amount of time and effort required to get more knowledge and (2) the risk involved in making the decision.

 

Thus far decision-making has been discussed as thought it were completely an individual matter, and of course many decisions are of personal concern only. Nevertheless, the majority of choices made by family members concern others as well as themselves. In democratic living today, decisions are increasingly made not by one person for the group but by all of those concerned.

 

Individual decisions are more quickly made than group decisions, and the quality of group decisions tends to be no higher than the contribution of the ablest member of the group. The number of people desirably involved in making a decision is related to the number who takes responsibility for that decision. On the other hand, group decisions may be better than individual ones in that more alternatives tend to be suggested and unproductive approaches are earlier detected. Their undisputed superiority, however, lies in their greater acceptance by the group and hence in the more effective carrying out of the decision once made.

 

The development of group decisions is not only a slower process than that of individual ones. It may also be a thornier road. When conflicts arise, it is helpful to recognize that there are various levels and ways of resolving them.

 

Resolving Conflict: Follett lists four possible outcomes representing different levels of adjustment in disagreements: (1) struggle and victory of one side, resulting in dominance, (2) voluntary submission of one side, (3) compromise, and (4) integration. To these four, the authors would add two others at approximately the same level as integration: (5] conversion, which is a possible outcome of voluntary submission, compromise, or even of dominance; and (6) acceptance of differences where unified action is not essential and integration is not possible. These six outcomes represent four different levels of harmony of feeling or inner agreement:

 

The important point to recognize is the difference in feeling or inner agreement resulting from these different levels. At levels 1, 2, and 3 of solution of conflict, the persons involved may be left farther apart in feeling after the conflict than when they started. At the highest level (4), regardless of which of the three methods of resolving conflict is used, harmony of feeling results. The greatest cleavage in feeling is at the first level, less at the third level, and an uncertain amount at the second.

 

Dominance or voluntary submission

 

At the dominance level, one side demands and the other is forced to obey. At the second level of resolving conflict there is still victory on one side and submission on the other, but the under-standing between the two sides is greater. The outward result is the same as level 1, that is, one side gives in, but the inner feeling is more unified. Even a trivial disagreement may be resolved at each of the four levels. Unquestionably fundamental group harmony or disharmony results from the resolution of many small issues as well as from the results of occasional large disagreements.

   Compromise

 

The level of compromise is the one often held up as most desirable to reach. Follett’s great contribution on the solution of conflict is pointing up the difference between it and a higher level, that of integration. At the level of compromise there is some voluntary yielding on both sides without, however, an essential harmony of feeling or resolution of fundamental differences. Each opponent comes part way in outward action, but retains his original mind-set on the issue. The inner cleavage remains. This may be shown diagrammatically:

 

Compromise level of resolving conflict

 

This difference of inner feeling will of course vary with the strength, importance, and duration of the issue. It is likely to smolder under the surface and flare up at a later opportunity.

 

Conversion

 

Conceivably levels 1, 2, and 3 may run into conversion, at which level each side that has submitted wholly or in part changes its mind at that time or later and really accepts the views of its opponent.

 

Integration

 

The highest level of settling conflict is that of integration. It is a creative process in which the two sides reach a new solution together—one with which all concerned are satisfied. It means taking an issue apart to find what agreement already exists and what the genuine points of difference are. After those are discovered, the next steps are to build upon the items of agreement as far as possible and frankly acknowledge the remaining differences. The last and, to many persons, the most difficult step is to work out a new solution which would resolve the remaining differences. It takes logical thinking to recognize the differences and likenesses of thought on an issue, and it takes a desire to solve the problem, to concentrate and build upon the points of agreement so far as they exist. Using the common opinions of the group as a basis for a new solution makes integration both a creative process which is stimulating in itself, and also a solution of conflict that brings genuine harmony of feeling between the opposing forces. In order to reach the highest level of resolving conflict there must be an inner willingness of all concerned. Possible solutions at the five levels of resolving conflict are:

 

I. Dominance and submission—one person forces the use of the shelf he favors.

   2.  Voluntary submission—one person accepts the use of the shelf he does not favor.

3.  Compromise—Use a shelf in an inconvenient place but of convenient height.

4.   Conversion—either or both persons become accustomed to solution 1, 2, or 3 and would now choose it if the decision were to be made anew.

5.   Integration—the original high shelf is used, but the pencil sharpener is fastened under it instead of on top. This position brings it down practically to convenient height of the lower shelf but the holes are not visible.

 

Solutions related to integration

 

The Quaker custom of resolving situations through the “sense of the meeting” seems not far different in essence from integration. No vote is ever taken, but through open.

 

Acceptance of differences

 

The last way of adjusting conflict is that of acceptance of differences. It is not a different level from integration but is a different means of reaching that inner harmony of feeling which is associated with integration. Not every issue can be settled by acceptance of differences; in fact, one of the characteristics of group living is that many things must be accepted and done alike by the entire group. There are, however, probably more areas in group living where individual differences may be respected than we ordinarily think. In conflict, sometimes a “live and let live” policy, when voluntarily adopted by both sides of a controversy, may be as satisfactory as unified action. It is the feeling about the differences which determines the success of this type of solution.

 

Conclusion

 

Each step in the managerial process is a series of decisions, some habitual acts but chiefly genuine choices among alternatives. Only the latter are true decisions.

 

Knowledge about the decision to be made is essential especially in seeking alternatives and thinking through them. Risk involved in selecting an alternative must also be based on knowledge. Thus far in this chapter we have concentrated on analyzing the process of decision-making. Understanding it is unquestionably the best aid one can have in mastering it. There are, however, the further aids of under-standing the process of change in general and habit-changing in particular, and the providing of managerial experiences for the making of decisions.

Training in decision-making consists essentially in having opportunities to make decisions. These opportunities should begin with situations within the power of the decider to handle satisfactorily and gradually lead into more complex situations. Facility in changing habits is an aid both in making decisions and in carrying them out.

 

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