finals

• Decision Making


  The essence of management, where one is continuously engaged in choosing between alternatives
• Decision-making


  • A universal function of all managers in every part of the organization
  • An integral part of the management process such as planning, organization, direction, control etc.
• Decision-making


  The selection of one behaviour alternative from two or more possible alternatives
• Decision


  A judgment, a choice between alternatives
• Decision-making in cooperative organizations


  • A bounden duty of directors and managers both in the developmental sphere and in the functional sphere
  • A vital task to give the activities of the members and employees a goal and direction and to determine how best to use the material resources of the cooperative
  • A complicated task that must conform to rational choice and objective requirements, and ensure uniform action, proper participation and collaboration between members and employees
• Levels of managerial decisions in cooperatives

  • Goal decisions (What is to be reached?)
  • Means decisions (By what means?)
  • Action decisions (How?)
• Levels authorized to make decisions


  • Upper management level
  • Middle management level
  • Lower management level
• Strategic decisions


  Have long-term importance and a complex character, are goal decisions and bring about fundamental changes, directed and coordinated at the higher levels
• Tactical decisions


  Routine decisions, directed at the regulation of limited fields of activity or shorter periods, based on strategic decisions and aim at their implementation, the task of middle and lower level management
• Extent of decision


  • Strategic decision (Upper management level)
  • Tactical decision (Middle and lower management level)
• Programmed decisions


  Routine repetitive decisions, involve less risk and may be delegated easily, quantitative nature facilitates computer programming
• Unprogrammed decisions


  Non-repetitive decisions, cannot be assessed in quantitative terms and involve greater risk
• Types of decision-making

  • Individual decision-making
  • Group decision-making
• Individual decision-making


  Used in small organizations at times of emergency and in circumstances where the group has little knowledge, factors are prestige, power and expertise of the individual
• Group decision-making


  Participative decision making, makes use of collective wisdom of several individuals, members get a chance to voice their opinion, technical service of experts may also be made available
• Process of decision making by P.F. Drucker

  1. Defining the problem

  2. Analyzing the problem

  3. Developing alternative solutions

  4. Deciding upon the best solutions

  5. Converting the decision into effective action
• Developing the problem


  • Continuously scanning the environment to identify and perceive the problems of development
  • Getting new problems from orders of superiors, directions of Board of Directors, suggestions from members and employees, or by analyzing the system of operation and accounting
  • Formulating the aim or objective of the decision to make it purposeful and practicable
• Analyzing the problem


  • Ensuring availability and usability of facts, considering all critical factors, tangible and intangible, internal and environmental, managerial and technical
  • Analyzing the information and data logically, distinguishing relevant and influential factors from others to keep time and cost within limits
• Developing alternative solutions


  • Developing as many alternative ways as possible based on available material, money, manpower, technology, etc.
  • Choosing the critical factors to determine the course of action
• Deciding upon the best solution


  • Classifying, comparing and analyzing the alternative courses of action
  • Judging each course of action on the basis of cost and risk involved, assessing the futurity and relation to various business aspects
  • Conducting managerial analysis and cost-benefit analysis to determine the quantitative outcome
  • Applying decision criteria like economic necessities, speed, expenditure, social factors, objectives of superordinate bodies
  • Arriving at the decision with democratic sanction
• Converting the decision into effective action


  • Ensuring the decisions are carried out, gauging possible errors and taking remedial actions, recognizing the chain reaction and inter-relatedness of decisions, implementing within the specified time
• Techniques in decision making

  • Operations Research
  • Linear Programming
  • Risk Analysis
  • Decision Tree
• Operations Research


  A mathematical technique used in decision-making, a scientific method of solving problems by using mathematical models and probability theory, helpful in areas like inventory, production planning, etc.
• Linear Programming


  A mathematical technique that expresses operations of interdependent variables through mathematical formulae, useful in selection of alternatives that give highest profit, applied to problems of production planning, scheduling, resource allocation, etc.
• Risk Analysis


  Evaluating how seriously a decision is at risk from forecast errors, calculating the probability of achieving a given return on capital
• Decision Tree


  Visualizing all possible directions that actions may be taken from a decision point, calculating the net present value to choose the course of action with highest net returns and lowest cost
• Cost Benefit Analysis


  Systematic comparison between cost of carrying out a service/activity and the value of the service/activity by quantifying all costs and benefits, used in capital project evaluation
•  According to George Terry: "Decision making is selection of one behaviour alternative from two or more possible alternatives“
•  P.F. Drucker: "A decision is a judgment. It is a choice between alternatives."
• Decision-making is a vital task to give the activities of the members and employees a goal and direction and to determine how best to use the material resources of the cooperative.
• The decision making should not only conform to rational choice and objective require­ments under various decision situations; but it must also ensure that uniform action is achieved.
• The group decision may take either of the two forms: Group advisory or Group deterministic