The experimentation approach can be quite expensive, especially if a program requires heavy capital expenditure and if several alternatives have to be tried out. There are four criteria for picking the best from among the possible alternative solutions: i The Risk: The manager has to weigh the risks of each alternative solution against the expected gains. Osborn identifies four principles which help to generate alternatives: a Do not criticize ideas while generating possible solutions — Managers should react positively to all the ideas. They have already taking risk into account and are definite on what they want to purchase. To convert a solution into action requires that people understand what change in behaviour is expected of them, and what change to expect in the behaviour of others with whom they work. Follow-up enables to identify the shortcomings of the decision.
Therefore, the manager must try to make the people understand what the decision involves, what is expected from them and what they should expect from the management. Find out the pros and cons of every alternate and eventually evaluate them on such basis to find out the one which seem to be more effective than the rest. A well-defined problem, as experts say, is already half-solved. In other words, alternatives should be evaluated in order to see how effective each would be. Article shared by : In this article we will discuss about:- 1. Although each step can be examined at length, managers often run through all of the steps quickly when making decisions.
If not, it signals a problem. But in business, situational factors are very important. These include people, money, material, time, equipment, expertise and information. People also remember bad experiences over good ones, take that into account. It could be low quality, poor promotion, better product introduced by competitors etc. The End User may or may not be the purchaser of the company product. He may also represent the variables in a problem situation through mathematical terms and relationships.
A second requirement is the availability of performance data for comparison with the set of standards. Other times, the optimal solution is a combination of several alternatives. So, the manager should try to have an overall view of all situations to find the real problem. The decision-maker identifies the problems and applies the pre-determined solutions. To analyse the relationships we may take the help of computers and certain mathematical techniques. The ability to develop alternatives is as important as making a right decision among alternatives.
Consider a different type of decision: allocation. Launching a new product, location of a new plant, installation of a computer system are examples of strategic decisions. Regarding businesses, decision-making is a regular process or simply a habit. But do we really understand what each decision entails, and are there ways to improve our decision-making? Such decisions affect the personal life of a manager but may affect the organization indirectly or directly. This creates a feedback loop that can be used to improve the decision-making process itself.
Everybody involved in the decision-making process needs to agree on a written problem definition before proceeding. It also specifies both the nature and the causes of the problem. The managers should secure the support of the top management for allocation of resources, time etc. Unless he does so, the best possible decision cannot be taken by him. Conduct thorough research and speak with internal experts who experience the problem firsthand in order to mitigate this. The End Consumer is the heart and soul of any business stability.
For example, they ran out of toothpaste and now they need to go to the store and get more. This depends on the availability of data and the cost of evaluating the data. For example, they may lack the proper budget or may not have the most accurate information or any extra time. If the situation prevailing has great urgency, the preferable course of action will alarm the organisation that something important is happening. Otherwise, even the best decision may encounter resistance in the implementation stage. The key phase added is the Consequences phase. Regardless of the method used, a manager needs to evaluate each alternative in terms of its Feasibility — Can it be done? Selection Selection is the choosing of one of the alternatives.
Is the new camera as user-friendly for beginners as the marketing suggested? Developing a sufficiently large number of alternative solutions at this stage, therefore, guarantees adequate focus and attention on the problem at hand. Making Analysis of the Problem and to Find Facts: The next phase of decision making is the analysis of the problem which involves classifying of the problem and collecting information. He must decide in advance what type of information he requires and how can he obtain this. In order to overcome resistance to change, the people who will be implementing the decision should be given careful orientation and training. Ethics refers to the degree of compatibility of an alternative with the ethical standards and social responsibilities of the organization. Reversibility of the decision is an important factor that helps to evaluate alternatives. Qualitative or un-measurable factors are such as quality of labour relations, the risk of technological change or the international political climate.