Management
Decision making for managers
1.0 Introduction
One of the main tasks of a manager is to keep track of the business environment and to decide in consequence. For example, forces in the external environment give rise to a number of opportunities, and threats which have to be acted upon. Inside the organization, decisions have to be made about resource utilization. Decision making involves selecting from a set of alternatives.
1.1 Definition:
Decision making is the process by which managers respond to opportunities and threats by analysing options and determining specific courses of action according to organisation goals.
Good decisions lead to better performance in meeting customer and employees needs as well as those of other stakeholder groups.
2.0 Progammed and Non Programmed Decision Making
Programmed Decision Making is a routine, automatic process following rules and guidelines developed by management. This form of decision making applies to most day-to-day issues in an organization. For example, a supervisor may decide to hire a new worker each time overtime payment increases by more than 10 percent. Similarly, inventory decisions, paying bills and taking non paying customers to Court are programmed decisions.
Programmed Decision Making is possible when managers have the information they need to create unambiguous rules that will guide decision making.
Non Programmed Decision Making refers to non-routine decisions made in response to unusual or novel opportunities or threats. Rules do not exist because the situation is unexpected. For example, decision to invest in a new kind of technology or expand internationally. In this case, managers have to search among a number of alternatives and rely on intuition and judgement.
Intuition : ability to make sound decisions based on past experience and immediate
feelings based on current information.
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