DECISION MAKING OF ORGANIZATION

Paying attention to how your organization handles decisions right in first step to making

the affective, timely decisions needed to execute business strategies and realize goals

H.M.Aashir Ul Haq

DECISION MAKING OF

ORGANIZATIONPaying attention to how your organization handles decisions right in first step to making the affective, timely decisions needed to execute business strategies and realize goals

H.M.Aashir Ul Haq

ROLL NO.: 18

INTRODUCTION

Organizations are social inventions for accomplishing common goals through group efforts. General motors and NBC news are obviously organizations, but so are the Chicago bulls, the sierra club, pearl jam, and a college sorority or fraternity.When we say the organization are social inventions we man that there essential characteristics is the coordinated presence of people, not necessarily things.The field of organizational behavior is about understanding people and managing them to work effectively.

Individuals are assembled into organizations for a reasons. There are

variety of different organizations in which individual works together to accomplish goals through group efforts.

DEPATRMENT OF PUBLIC ADMINISTRATIONUNIVERCITY OF KARACHI

2014

Dedicated To My Father:M. Ata Ul Haque

Preface

During the last few years, a shift has been taking place in the study of organization and management. Traditionally, the Functions of the manager have been the framework for the analysis and synthesis of organizational activities. Organizations have been commonly studied under the managerial function “organizing” They were thus viewed as a subset of the larger activity of “managing”.

By contrast, many individual today view organizations as much more than the formal structure that manager create. Although manager can have a marked effect upon the complex entities we call organizations, they are only one several influences upon them.

Organizations are systems composed of many subsystems functioning in an environment. One of the most important of these subsystems is management. The managerial subsystem must attempt to integrate these other subsystem so that they are compatible with one another, with the organization’s environment, and with its goals. To do this, managers must understand how and why organization functions.

ContentS. No

Topics Page No

1 Decision making: 1 Well-structured Problems 2

2 The Characteristics Of Decision Making:

3

Levels of deciding 33 Organizational Factor In

Decision Making4

4 The complete decision maker--a rational decision-making model:

4

Problem Identification And Framing

5

5 Improving decision making of organizations:

6

Training Decision Leaders 7 Stimulating And Managing Controversy

7

6 The decision process: 8 Approaches To Decision Making 8

7 Theories of decision making: 10 Management Of Persuasion 10 A Frame Work For Management 11

8 Summary 139 Bibliography 15

decision making Decision making is the process of developing a commitment to some course of action. Three things are not worthy about this definition. First decision making involves making a choice among several action alternatives the store can carry more or less inventory, and the mental health center can be located on the north or south end of town. Second decision making is a process that involves more than simply the final choice among alternatives if u decide to accept the offer of a new job, we want to know how this decision was reached. Finally the "commitment" mentioned in the definition usually involves some commitment of resources such as time, money, or personnel if the store carries a large inventory, it will tie up cash; if the chairperson of philosophy offers too many introductory classes, he might have no one available to reach a graduate seminar. The Hubble telescope project required a substantial resource commitment.

In additional to conceiving of decision making as the commitment of recourses, we can also describe it as a process of problem solving. A problem exist when a gap is perceived between some existing state and some desired state.

Decision making. The process of developing commitment to some source of action.

Problem. A perceived gap between an existing state and a desired state.

Well-structured Problems For a Well-structured problems, the existing state is clear, the desired state is clear, and how to get from one state to the other is fairly obvious. Intuitively, these problems are simple, and their solutions arouse little controversy. This is because such problems are repetitive and familiar.

Assistant bank manager-- which of these 10 cars loan applications should I prove?

Welfare officer--how much assistant should this client receive?

Truck driver--how much weight should I carry?

Because decision making takes time and is prone to error, organizations (and individuals), attempt to program the decision making for well structured problem. A program is simply standardized way of solving a problem. As such, programs short-circuit the decision-making process by enabling the decision maker to go directly from problem identification to solve.

Well structured problems. A problem for which the existing state is clear, the desired state is clear and how to get from one state to another is fairly obvious.

Program. A standardized way of solving a problem.

The Characteristics Of Decision Making

It is hard to separate decision making from planning. You might argue that planning is making decision, because it determines what will be done now, or next week, or next year, out of a set of many things that could be done. And u could just as well argue that deciding is planning, because the very act of choosing a course of action by reaching a decision creates a plan.

Levels Of DecidingThe simplest form of decision making is one in which the information sought itself reveals the action that should be taken.

1. Automatic Decision If you are going for a ten-minute jog, the information that ten minutes are up leads automatically to the decision to stop. If you intend to hire candidates who pass an employment test, the information on which candidates passed automatically produces the decision on which candidates to hire.

2. Expected-Information Decision Climbing on level higher in complexity, the result of a forecast (or "expected information") provides the decision on action to take. In this case, you are not sure of the information-you are someone else must estimate it-but once the estimate is made, the decision is just as automatic as before. If you intend to introduce a new product, provided 30% of the prospective customers like it better than a competitive product, a survey of 100 people showing that 38% of those sample prefer it (which would tell a statistician that 30% of the population would definitely prefer it) would mean an automatic decision to introduce the product.

Organizational Factor In Decision Making

When we discuss organizations as people-system, we stated that the manager's world is not a neat organization but a confusing jumble of the people, displaying all degrees of authority relationship. We pointed out that a manager takes instructions from many people other than an immediate superior, including at times people who are actually lower in the organizational hierarchy. Nowhere do these pressure points become so obvious as in the process of decision making. When a critical decision must be made, all sorts of special-interest groups start bringing pressure to bear on the manager. Some of this input is couched in terms of specialist advice--the production manager points out how hard it will be to make a new product and describes the changes that should be introduced for efficiency; the sales manager advises modification to increase customer acceptance (and perhaps make the selling job easier); the safety engineer objects to manufacturing technique as too hazardous; and so forth.

the complete decision maker--a rational decision-making modelExhibit 1.1 presents a model of decision process that a relation decision maker might use. When a problem is identified, a search for information is begun. This information clarifies the nature of the and suggests alternative solutions.

EXHIBIT 1.1

These are carefully evaluated, and the best is chosen for implementation. The implemented solution is then monitored over time ensure its immediate and continued effectiveness. If difficulties occur at any point in the process, repetition or recycling may be effected.

Problem Identification And FramingYou will recall that a problem exist when a gap occur between existing and desired conditions. Such gaps might be signaled by dissatisfied customers or vigilant superior or subordinates. Similarly, the press might contain articles about legislation or ads for competing products that signal difficulties for the organization. The perfect rational decision maker, infinitely sensitive and completely informed, should be a great problem identifier. Bounded

rationality, however can lead to the following difficulties in the problem identification:

Perceptual defense. Perceptual system may act to defend the perceiver against unpleasant perceptions.

Problem defined in terms of functional specialty. Selective perception can cause decision maker to view a problem as being in the domain of their own specialty.

Problem defined in terms of solution. This form of jumping to conclusion effectively short-circuits the rational decision-making process.

Problem diagnosed in terms of symptoms. "what we have here is a moral problem." while this might be true, a concentration on surface symptoms will provide the decision maker with few clues about an adequate solution.

improving decision making of organizations

It stands to reason that organizational decision making can improve if decision makers receive encouragement to follow more closely the rational decision making model shown in exhibit 1.1. This should help to preclude the various biases and errors that we have alluded to throughout the chapter. Each of the following techniques has this goals.

Training Decision LeadersWhen organizations utilize group decision making, an appointed leader often convenes the group and guides the decision. The action of this leader can "make or break" the decision. On the hand, if the leader behaves autocratically, trying to "sell" a preconceived decision, the advantages of using a group are obliterated, and decision acceptance can suffer. If the leader fails to exert any influences, however, the group might develop a law-quality solution that does not meet the needs of organizations. The use of role playing training to develop these leader ship skills has increase the quality and acceptance of group decisions. The following are examples of skills that people learn in discussion leader training.

State the problems in a no defensive, objective manner. Do not suggest solution or preferences.

Supply essential facts and clarify any constrains on solution (e.g., "we can't spend more than $5000").

Wait out pauses. Don't make suggestions or asked leading questions. Draw out all group members. Prevent domination by one person, and

protect members from being attacked or several criticized. Ask stimulating questions that move the discussion forward. Summarize and clarify at several points to mark progress.

Stimulating And Managing ControversyFull- brown conflict among organizational members is hardly conducive to good decision making. Individuals will withhold information, and personal or group goals will take precedence over developing a decision that solve organizational problems. On the other hand, a complete lack of controversy

can be equally damaging, since alternative points of view that may be very relevant to the issue at hand will never surface. Such a lack of controversy is partially responsible for the groupthink effect, and it also contributes to many cases of escalation of commitment to flawed courses of action. For example, stifled controversy played a part in the disastrous launch of the space shuttle challenger and Hubble fiasco.

The decision processEven if an executive seems to prefer an unstructured decision-making approach, chances are that at least some rational process is involved. Let us examine some different techniques, and try to develop an effective decision pattern.

Approaches To Decision Making 1. Fact. The systematic manager seeks to assemble all the facts about a problem, after which, presumably, the decision will make itself. This inference sounds reasonable, and certainly facts are necessary for a good

decision, but it isn't really that simple. For one thing, the available facts are seldom as clear or complete as one would wish. Sometimes two "facts" may signal directly opposite decisions, and the manager cannot tell which to heed. Even without this sort of confusion. There usually are not enough facts at hand, and it is expensive and time-consuming to get more, so the manager who deals only with "facts" often does not have enough to solve the problem.

2. Experience. There is no question that the manager who has been over the course many times in the past has an edge over the new executive. We learn from mistakes (or should), and old hands can refer to many past mistakes to warm them away from the shoals. Even though past events never coincide precisely with current problems a good manager generalizes from experience and builds up an informal body of do's and don'ts.

3. Intuition. Intuition has been praised as the indispensible trait for good manages and criticized as practically immoral. In a way it is both. When good managers use intuition, they probably summarize hundreds of experiences into an unconscious pattern of action that draws from experience but also goes beyond it a bad manager, however, may use "intuition" as a basis for very superficial decision.

4. Logic. There is more to logical decision making than just "being logical." it implies a rational study of all elements on each side, considering the importance of each, weighing the reliability of the information (perhaps delaying more facts when the available information seems inconclusive), and analyzing the costs and benefits of each course of action.

5. Systems analysis. The magic of the computer has led many commentators to include that quantitative decision making has some higher

power that makes it superior to human judgment. This approach is ill-advised, because by over stating the real benefits of quantitative aids to management it risks discrediting the whole fields of systems analysis. There are many aspects of manager's job where the numbers are too numerous or there interrelation too complex for unaided comprehension, and in such cases the mathematical summary of what is happening is extremely useful.

theories of decision makingOne of the decision of the tremendous current increase in outside pressure on the manager-whether corporate executive or government official-is the new spotlight on how decision are made and how executives manage. Previously, the more invisible executives could remain, the happier they were-and, they believed, the most effective. Today, like it or not, they must come out of their shells and plunge into a whole cauldron of outside activities that make their lives far more complex and harried than ever before.

Management Of PersuasionWhether the organization should be hierarchical or a team, it is clear that good manager's in today's environment cannot ignore the desires, ideas, ambitions, and feelings of those who work for and with them, John Morgan, whose recent book presents some serious truths in fable form, others the following "nine principles of persuasion," based on the goal of managing by persuading others to do willingly what u want them to do:

1. Make it very clear just where u stand, and why.

2. Emotions persuade more effectively in the short run than facts.3. By patient in getting your ideas across; it isn't easy. 4. Make use of repetition-repeat the message many different ways.5. Plan to encounter resistance, and be ready to deal with it.6. Try to get your colleagues deeply involved personally.7. Show that the desired action really is feasible-not just a dream.8. Be perfectly frank in stating your motives-no "hidden agendas.9. Be totally honest and believable-don't don't use your credibility.

A Frame Work For ManagementOnce of the cooperate clients of Peter Drucker, dean of US management consultants, describes Drucker's deceptively simple approach as follows:

"It's not specific advice so much, as that he gives you a frame work in which to view your business, your markets-and your life." Drucker does describe detailed techniques or "how-to" formulas he leaves that to others but rather back off and looks at the goals of the organization, forcing you to consider the best way to attain them. He is a philosopher of business, which sees at the most typical (and influential) social institution in today's society. Profits, says Drucker, are not the "goal" of business (any more than breathing is the goal of man). Rather, they are the basic need without which there can be no business. Concord is not necessarily a requirement for management success, unless there is some specific need for it; indeed, conflict can be healthy. ("So your salesman and your engineers fight? That is why they should do. God help you if they are in agreement.")

summary Some see managers as systematic who carefully review all alternatives and scientifically select the best; others see them as plagued with doubts and short of information, selecting any course of action that appears likely to work. The form of organization, and its expectations, have a good deal to do with how systematically and effectively its managers behave.

There are several levels of deciding. The simplest level is that where the information provides almost an automatic choice of decision. At the next level up in complexity, manager's estimate or expectation of information. Then comes the case where different pieces of information must be weighed to determine their relative importance, and finally the most complex case, where the manager is uncertain both as to the facts and their relative importance. Structured decision are those where the answer virtually suggests itself when the information is presented, but most management decision have very little structure.

Deciding starts with determining the alternatives and tracing their implications. Usually a choice of one alternative effects action in the future, and therefore is a broader decision than it appears at first sight. Managers don't always make "right" decisions, because they are operating under many pressures from their colleagues, who have weapons to influence the decision.

Programmable decisions are those with predictable elements, and most decisions contains some programmable elements. Usually there are key factor which affect the outcome, and decision makers should concentrate on these.

Decision should be made at the lowest level where there is competence and impartially, recognizing that decisions often have wide repercussions. Decision made by groups are likely to be more acceptable, but not always as efficient. Seeking group consensus will lead to acceptable decisions, but seeking facts from the group may lead to a better decision. Decision should not be made by managers with no responsibilities for the outcome. Decision involving more money usually are more complex decision, and usually are made at a higher in the organizational hierarchy.

The actions and decisions of today's manager are publicized more than ever before, and the increase workload is encouraging some managers to seek help, sometimes via committee management. Whatever management approach you use, it must enable you to persuade others to work toward organizational goals. It is useful to establish a framework for management, by thinking about how to organization divides up its decision, how it adjusts to change, and how it fits into society. No manager can be affective without maintaining personal contact with others in the organizations.

BIBLIOGRAPHY1. John Gary, Decision making, 4th edition,

London: Harper Collins Publisher, Inc., 1996, pp. 1-2

2.William D Brinckloe, The characteristics of decision making, London: collier Macmillan publishers, Inc., 1997, pp. 3.

3. Ibid, organizational factor in decision making, pp. 4.

4.Opsit, The complete decision maker--a rational decision-making model, 4th edition, London: Harper Collins Publisher, Inc., 1996, pp. 4-6.

5.Opsit, Improving decision making of organization, 4th edition, London: Harper Collins Publisher, Inc., 1996, pp. 6-8.

6.Opsit, The decision process, London: collier Macmillan publishers, Inc., 1997, pp. 9-10.

7.Ibid, Theories of decision making, pp. 10-11.8.Ibid, Summary, pp. 12-13.