DECISION MAKING PROCESS
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.
THREE PHASES IN DECISION MAKING PROCESS
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
