Decision Making F Y B.com

1. Unit – 4 : Decision Making
By RADHIKA
Faculty of Commerce
& Management
J H B W C

2. Introduction
 Decision Making

3. Cont.
 Decision-making is an essential aspect of modern
management.
 A manager's major job is sound/rational decision-
making. He takes hundreds of decisions consciously and
subconsciously. Decision-making is the key part of
manager's activities. Decisions are important as they
determine both managerial and organizational actions.
 It is rightly said that the first important function of
management is to take decisions on problems and
situations. Decision-making pervades all managerial
actions.
 It is a continuous process. Decision-making is
an indispensable component of the management
process itself.

4. Definition
“Decision Making is the technique of solving problems
and selecting the best alternative course of action form
the given alternative.” - Donald
“Decision Making can be defined as the selection based
on some criteria of one behavior alternative from two or
more possible alternatives.” -George R Terry

5. Meaning
 The word 'decision' is derived from the Latin
words ‘de ciso’ which means 'a cutting away
or a cutting off or in a practical sense' to come
to a conclusion. Decisions are made to
achieve goals through suitable follow-up
actions. Decision-making is a process by
which a decision (course of action) is taken.
Decision-making lies embedded in the process
of management.

6. Characteristics
1. Management’s
functions
2. Rational Activity
3. Continuous process
4. Intellectual process
5. Alternative process
6.Based on qualitative
technique & evaluation
7. Positive or Negative form
8. Managerial commitment &
Dedication

7. StepsinDecisionMaking
1. Defining the
Problem
2. Collecting
related
Information
3.
Classification
& Analysis of
Information
4.
Formulation
of Various
alternatives
5. Critical
evaluation of
alternatives
6. Selecting the
Best
Alternatives
7.
Implementatio
n of
Alternatives

8. Techniques ofDecisionMaking
 Traditional Technique
 Internal Motivation
 Past Experience
 Based on Reality & experiences

9. Cont.
 Modern Technique
 Operations Research (advanced analytical
methods to help make better decisions)
 PERT (to analyze and represent the tasks
involved in completing a given project)
 CPM
 Decision Tree (model of decisions and their
possible consequences, including chance
event outcomes)
 Linear Programming (such as maximum
profit or lowest cost)