Describe different types of managerial decisions and the steps and the techniques used for decision making. Discuss Individual Vs Group decision making.

Managerial decisions can be broadly classified into several types based on their nature and scope. Here are some common types of  decision making :

1. Strategic Decisions: These decisions are long-term in nature and focus on the overall direction and goals of the organization. They involve major resource allocation, market entry or exit, mergers, acquisitions, and other high-level choices that impact the entire organization.

2. Tactical Decisions: Tactical decisions are medium-term decisions that bridge the gap between strategic decisions and day-to-day operations. They focus on implementing the strategic decisions and often involve departments or functional areas within the organization.

3. Operational Decisions: Operational decisions are short-term and concern day-to-day activities. They are routine decisions that affect the daily operations of the organization and are usually made by front-line managers.

4. Programmed Decisions: Programmed decisions are repetitive and routine decisions that can be handled using established rules, policies, or standard operating procedures. These decisions are based on past experience and require little creativity.

5. Non-programmed Decisions: Non-programmed decisions are unique, complex, and require creativity and innovation. They are often made in response to new or unexpected situations and have no established guidelines.

The decision-making process typically involves the following steps:

1. Identify the Problem: Clearly define the issue or opportunity that requires a decision. Understanding the problem is crucial for finding the right solution.

2. Gather Information: Collect relevant data and information related to the problem. This could involve market research, financial analysis, or input from stakeholders.

3. Generate Alternatives: Brainstorm and create multiple possible solutions or courses of action. Diverse perspectives can be valuable during this stage.

4. Evaluate Alternatives: Assess the strengths, weaknesses, risks, and potential outcomes of each alternative. This evaluation helps in selecting the most suitable option.

5. Make the Decision: Choose the best alternative based on the evaluation. The decision-maker may use intuition, analysis, or a combination of both.

6. Implement the Decision: Put the chosen alternative into action. Effective planning and communication are essential for successful implementation.

7. Monitor and Evaluate: Continuously assess the decision’s outcomes and make adjustments if necessary. Learning from the results can inform future decisions.


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Techniques used for decision-making include:

1. Cost-Benefit Analysis: Assessing the costs and benefits of each alternative to determine the most economically viable option.

2. SWOT Analysis: Evaluating the strengths, weaknesses, opportunities, and threats of each alternative to understand their overall viability.

3. Decision Trees: Visual representations of decisions and their potential consequences, helping in understanding complex scenarios.

4. Brainstorming: Generating a large number of creative ideas and alternatives in a group setting.

5. Delphi Technique: An iterative method where experts provide anonymous input, and the group’s consensus is reached over multiple rounds.

Individual vs. Group Decision Making:

Individual Decision Making:
– Faster decision-making process as there are no delays from group discussions.
– The decision reflects the preferences and biases of the individual decision-maker.
– Individual accountability for the decision’s success or failure.
– May lack diverse perspectives and creativity compared to group decision-making.

Group Decision Making:
– Offers a broader range of ideas and perspectives.
– Can result in higher-quality decisions due to collective knowledge and expertise.
– Takes more time due to the need for discussion, consensus-building, and coordination.
– Potential for conflicts and power dynamics within the group that might influence decisions.

The choice between individual and group decision-making depends on the complexity of the problem, the need for diverse input, the level of expertise required, and the organizational culture. In some cases, a combination of both approaches, such as gathering individual input before a group decision-making session, can be beneficial. Ultimately, the effectiveness of the decision-making process relies on the competence and cooperation of the individuals or group involved.

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