hello everyone and welcome to the session on decision making today we are diving deep into the topic that lies at the very heart of management decision making every choice every action and every outcome in an organization is a result of a decision and today we will explore the intricacies of this crucial process to truly understand management we must first appreciate the pivotal role that decision making plays think of an organization as a complex puzzle each decision is like placing a piece of that puzzle just like a puzzle every piece must fit perfectly to reveal the bigger picture the picture of success the ripple effect of our decision can be profound they influence not just probability but also well-being of every individual in the organization from fostering Innovation to avoiding crisis effective decision making is the Lynch bin of successful management as we journey through today's lesson we cover several key outcomes these are understanding the meaning and importance of decision making types of decisions and decision- making situations so let us begin with what is decision making a decision is a choice made from available Alternatives and decision making is the process of identifying problems and opportunities and then resolving them it is the act of choosing between multiple alternatives to achieve a specific goal it is the process we undergo when we faced with several options and we need to select the best one in the managerial context it could mean choosing between different strategies allocating resources sources or setting the direction of an organization decision making is a goal oriented process decisions are usually made to achieve some purpose or goal decision making is not a purely intellectual process it has both intuitive and deductive logic remember decision making is not just a concept it is a skill that you can refine and master and by the end of this session you will be better equipped to navigate the multi faet world of management decisions decision making is characterized as a process rather than as one static entity it is a pervasive function decision making permeates all management and covers every part of an Enterprise in fact whatever a manager does he does through decision making only the end products of a manager's work are decisions and actions decision making implies continuous commitment of time effort and money once a decision is made the organization moves in a specific direction to achieve the goals now let us see why is decision making is important for managers managers at all levels and in all areas of organizations make decisions effective decision making helps us in many ways such as Direction and goals effective decision making sets the compass for our lives by weighing options and considering consequences we Define our goals and steer ourselves toward what we truly value problem solving press life throws curve balls but through well horned decision making we learn to analyze situations identify the best course of action and overcome challenges with confidence empowerment and growth every decision successful or not is a learning experience it holds our critical thinking builds resilience and equips us to tackle future choices with greater self assurance increases efficiency and facilitates Innovation effective decision making helps in bringing New Alternatives into consideration that facilitates Innovation and also selection of the best alternative helps in increasing the efficiency of the organization I hope by this time you must have understood the meaning of decision making let's now delt into the various types of decisions taken in an organization the decisions taken by managers at various points of time may be classified into various categories these are personal and organizational decisions individual and group decisions programmed and non-programmed decisions strategic administrative and routine decisions let us see each type of decision in more detail with certain examples personal decisions decisions to watch television to study or retire early are examples of personal decisions such decisions pertain to managers as individuals they affect the organization in an indirect way for example a personal decision to purchase an Apple phone rather than a Samsung one indirectly helps one firm due to the sale and hurts another because of the the Lost sale personal decisions cannot be delegated and have a limited impact organizational decisions these decisions are made by managers in their official or formal capacity these decisions are aimed at furthering the interest of an organization and can be delegated while trying to deliver value to the organization managers are expected to keep the interest of all stakeholders also in mind such as employees customers suppliers the general public Etc they need to take decisions carefully so that all stakeholders benefit by what they do like introducing new employee incentive programs transferring employees making promotion decisions or allocating resources efficiently the second classification is individual and group decision individual decisions are taken by a single individual they are mostly routine decisions group decisions on the other hand are decisions taken by a group of individuals constituted for this purpose for example the admission Committee of a college stakeholders relationship Committee in a company group decisions compared to individual decisions have far-reaching consequences and impact a number of persons and Department departments they require serious discussion deliberation and debate however group decision making has its own advantages and disadvantages a group has more information than one individual and therefore can generate a greater number of Alternatives also interaction between individuals with varied viewpoints leads to Greater creativity at the same time groups create pressure towards Conformity presence of some group members who are powerful and influential May intimidate and prevent other members from participating freely another two important types of decisions are programmed and non-programmed decisions a programmed decision is one that is routine and repetitive rules and policies are established well in advance to solve recurring problems quickly for example a hospital establishes a procedure for admitting new patients and this helps everyone to put things in place quickly and easily even when many patients seek entry into the hospital programmed decisions leave no room for discretion they have to be followed in a certain way they are generally made by lower level Personnel following established rules and proced procedures non-programmed decisions deal with unique and unusual problems such problems crop up Suddenly are poorly defined and there is no established procedure or formula to resolve them deciding whether to take over a sick unit how to restructure an organization to improve efficiency where to locate a new company Warehouse are certain examples of nonprogrammed decisions the common feature in these decisions is that they are novel and non-recurring and there are no rade courses of action to result to because nonprogrammed decisions often involve broad long range consequences for the organization they are made by higher level personnel only such decisions are relatively complex and have a long-term impact the information relating to these problems is not readily available therefore they demand a lot of executive time discretion and judgment nonprogrammed decisions are quite common in such organizations as research and development firms where situations are poorly structured and decisions being made are non-routine and complex last but not least another classification of decision is strategic administrative and routine decisions strategic decision making is a top management responsibility these are key important and most vital decisions affecting many parts of an organization they require a sizable allocation of resources they are future oriented with long-term reifications they can either take a company to commanding Heights or make it a bottom pit administrative decisions deal with operational issues dealing with how to get various aspects of strategic decisions implemented smoothly at various levels in an organization they are mostly handled by middle level managers routine decisions on the other hand are repetitive in nature they require little deliberation and are generally concerned with short-term commitments they tend to have only only minor effects on the welfare of the organization generally lower level managers look after such mechanical or operating decisions now in the last part of this video let us understand various decision making situations every decision situation can be organized on a scale according to the availability of information and the possibility of failure the the four positions on the scale are certainty risk uncertainty and ambiguity where as program decisions can be made in situations involving certainty many situations that manages deal with every day involve only some degree of certainty and require nonprogrammed decision making certainity means that all the information the decision maker needs is fully available managers have information on operating conditions resource cost and constraints and each course of action and possible outcome risk means that a decision has clearcut goals and good information is available but future outcomes associated with each alternative are subject to some chance of loss or failure however enough information is available to estimate the probability of a successful outcome versus failure uncertainity means that managers know which goals they wish to achieve but information about Alternatives and future events is incomplete factors that may affect a decision such as price product cost volume or future interest rates are difficult to analyze and predict managers May may have to make assumptions from which to forge the decision even though it might be wrong if the assumptions are incorrect ambiguity is by far the most difficult decision situation and ambiguity means that the goals to be achieved or the problem to be solved are unclear alternatives are difficult to Define and information about outcomes is unavailable ambiguity is what students would feel if an instructor created student groups and told each group to complete a project but gave the group no topic direction or guidelines whatsoever in some situation managers involved in the decision create ambiguity because they see things differently and disagree about what they want managers in different departments often have different priorities and goals for a decision which can then lead to conflicts over decision Alternatives so as you can see good decision making is vital part of good management that is all in this session thank you for joining