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Wednesday, May 24, 2017


You are perhaps aware that in recent times most of the decisions in any large organisation are usually taken by a group of people (e.g., Board of Directors, Committees, Task-force, etc.) rather than by a single individual manager, however, brilliant, bright or powerful the manager may be. Perhaps from your own experience, you are also aware of some of the obvious advantages and disadvantages of group decision making like the one given below:

Looking at this kind of a balance-sheet on group decision making, you may well ask whether, on the whole, groups are superior to individuals as far as the decision  making effectiveness is concerned. It is not possible to give a categorical answer without reference to the nature of the people, the nature of the group and the context in which the group is making a decision. However, what we know about the impact of the groups in decision making process has been summarised by Harrison (1975) in the following way:



In the models of decisionmaking, you must have observed that any systematic approach to decision making starts with a proper definition of the problem. You will often experience that a problem well defined is a problem half-solved because the proper definition helped you to search at relevant place for promising alternatives. You would also agree that a "fair" approach to decision-making demands that parameters (for judging alternatives which are sometimes referred to as "criteria", "level of aspiration", "decision rules", etc.) should be explicitly developed before the alternatives are generated and not after. This imperative minimises the chances of unnecessary compromise which is the hall-mark of a low-quality decision. However, once you have developed the criteria, keep them aside and forget about them at the time of generation of the alternatives. This dissociation of criteria from the alternative-generation phase will improve your chance of coming up with a reasonably sufficient number of alternatives. You will understand the importance of generating a "reasonable" number of alternatives by the simple realisation that the quality of a decision can be no better than the quality of the alternatives that you identify.

Identification of Alternatives

Generation of a reasonable number of good alternatives is usually no problem. Occasionally, however, developing a variety of good alternatives can be a complex matter requiring creativity, thought, and study. Three means for generating alternatives are particularly well-known. These are brainstorming, synectics, and nominal grouping.

Brainstorming: Developed by Alex F. Osborn, brainstorming is the oldest and best known technique for stimulating creative thinking. It involves the use of a group whose members is presented with a problem and is asked to develop as many potential solutions as possible. Members of the group may all be employees of the same firm or outside experts in a particular field. Brainstorming is based on the premise that when people interact in a free and uninhibited atmosphere they will, generates creative ideas. That is, as one person generates an idea it serves to stimulate the thinking of others. This interchange of ideas is supposedly contagious and creates an atmosphere of free discussion and spontaneous thinking. The objective is to produce as many ideas as possible in keeping with the belief that the larger the number of ideas produced, the greater the probability of identifying an acceptable solution.


Thursday, April 27, 2017


In previous article (Decision making process) you have learnt what the different phases of a decision making process are, what types of decisions you are likely to make in an organisation and under what states of nature these decisions are made. Now, we are going to examine three suggested models of the decision making process which will help you to understand how decisions are made and should be made. These three models are:
(1) The econologic model, or the economic man,
(2) The bounded rationality model or the administrative man; and
(3) The implicit favorite model or the game man.

You will notice that each model differs on the assumptions it makes about the person or persons making the decision.

1) Econologic Model or Economic Man Model
The econologic model represents the earliest attempt to model decision process. Briefly, this model rests on two assumptions: (1) It assumes people are economically rational; and (2) that people attempt to maximise outcomes in an orderly and sequential process. Economic rationality, a, basic concept in many models of decision making, exists when people attempt to maximise objectively measured advantage, such as money or units of goods produced. That is, it is assumed that people will select the decision or course of action that has the greatest advantage or payoff from among the many alternatives. It is also assumed that they go about this search in a planned, orderly, and logical fashion.



Making decisions has been identified as one of the primary responsibilities of any manager. Decisions may involve allocating resources, appointing people, investing capital or introducing new products. If resources like men, money, machines, materials, time and space were abundant, clearly any planning would be unnecessary. But, typically, resources are scarce and so there is a need for planning. Decision making is at the core of all planned activities. We can ill afford to waste scarce resources by making too many wrong decisions or by remaining indecisive for too long a time.

You can define decision making as the process of choosing between alternatives to achieve a goal. But if you closely look into this process of selecting among available alternatives, you will be able to identify three relatively distinct stages. Put into a time framework, you will find:
1. The past, in which problems developed, information accumulated, and the need for a decision was perceived;
2. The present, in which alternatives are found and the choice is made; and
3. The future, in which decisions will be carried out and evaluated.

Herbert Simon, the well-known Nobel laureate decision theorist, described the activities associated with three major stages in the following way:
1. Intelligence Activity: Borrowing from the military meaning of intelligence Simon describes this initial phase as an attempt to recognise and understand the nature of the problem, as well as search for the possible causes;
2. Design Activity: During the second phase, alternative courses of action are developed and analyzed in the light of known constraints; and
3. Choice Activity: The actual choice among available and assessed alternatives is made at this stage.
If you have followed the nature of activities of these three phases, you should be able to see why the quality of any decision is largely influenced by the thoroughness of the intelligence and design phases. Henry Mintzberg and some of his colleagues (1976) have traced the phases of some decisions actually taken in organisations. They have also come up with a three-phase model as shown in Figure I.

Figure I: Mintzberg's empirically based phases of decision making in organizations


Thursday, February 23, 2017


Why is an organization created? What is its purpose? How best can it achieve that purpose? What methods and means will it employ to achieve the purpose? Various terms and concepts of mission, objectives, strategy, policy, programmes and procedures which will help you understand the management of organizations.

The mission is the very reason and justification for the existence of a firm. Mission is always defined in terms of the benefits the firm provides to its customers and not in terms of any physical dimensions of the firm or its products.

A firm exists and functions only in relation to the customer whose need(s) it satisfies.. If there were no customers there would be no firm. Thus the starting point for, defining the mission of any business is its customer. Since the customer exists outside the business, the mission must be defined from the outside. The firm must ask the questions "What is our business?" and "What should it be?" but seek the answer from the customer's viewpoint.

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