Decisional Process

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Decisional Process

nizational Behavior

Prepared By:-Tejas

BaldaniyaKiran

MakwanaKevin11


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What is the Decision????

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Decision making models

i. Rationality Models

i. Bounded Rationality and Heuristics Models

i. Embedded Models

i. Individual Decision Making

i. Organizational Decision Making

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Rationality models

Economics and financial discipline emphasized the complete rationality of decision

making based on known alternatives.

Evaluated on the basis of calculation of pay-off and known consistent pattern ofpreferences.

Aim:- i.) maximum profitii.) equalizing managerial cost andiii.) equalizing managerial revenue.

Recent models of rational decision based on ABC(activity based costing).

Other model is EVA(economic value added) in which true cost of capital isdetermined.

And another is MVA(market value added) which is difference between market valueand invested capital.

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Bounded rationality and heuristicsmodels

Rational choice models maximizes the profit by examining all the alternatives basedon all information.

However it is UNREALISTIC.

So rationality is bounded and decision-makers identify obvious alternative andchoose one which is acceptable.

It does not discuss how the choice will be influenced.

Cognitive decision theorist suggested that decision-makers rely on heuristics. Heuristics are used for decision making like:-

i.) availability(judgment on available information)ii.) representativeness(judgment on matching against pre-existing category)

iii.) anchoring(judgment on the initial value and then adjusting it if necessary)

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Embedded models

Alternative to the rationality or bounded rationality models are the psychologicaland cultural embedded models.

This models emphasize the role of Values,

Emotions,Intuition andHabits(for individual decision making)

And are Socially,Culturally andPolitical embedded(for organizational decision making)

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Individual decision making

Etziomis concept

Franks concept

Manbridges concept

Flams concept

Katzs concept

Zeys concept

Habit has also been given central place in decision making.

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Organizational decision making

Micro level decision making to Macro level decision making.

Difference between individual decision making and organizational decision making.

Organizational decisions are no more made by individuals than the choice ofindividuals are made by the hand that sign the papers

March and Shapira point out five main areas demonstrating how rationality modelfails to explain the reality.

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1. Most organization in reality make decision and then collect information to validatethe decision.

1. Most organization copy what others do instead of applying a rational decisionmaking process to organizational change.

1. In reality, means are only loosely coupled to ends and loosely coupled to oneanother, unlike the means-end relation concept in the rationality model.

1. Rationality choice theories are unconcerned with the possibility of uncertainty aboutpreferences.

1. Myth, symbols and rituals are important in decision making but not recognize bythe rational models.

. Decision making is politically embedded.

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conclusion

Decision making both at the individual and organizational levels, is influenced byrational as well as psychological, social, cultural and political factors.

Each case of decision making is unique and requires a multi-disciplinary approachto understand and analyze it.

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Decision Making Styles

Decision: - made by individual- in personal matter/roles related to group/organization

Leadership, animportant role

Decision Making styles for Leaders

Leaders :- Responsible for making decisions ingroup/organizationDiffer according:-Their process orientation

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Leaders style(on the centralization-de centralization continuum)

STYLES DESCRIPTION

1. Autocratic/directive -Define & diagnose the problem-Generates, evaluates & choose among alternativesolution

2. Autocratic with groupinformation input

- Define problem- Diagnose cause of problem,

use group info. To determine cause- List potential solution on his own- Obtain data from group to evaluate the

alternatives & make choice from them

3. Autocratic with groupsreview & feedback

- Define problem, Diagnose its cause & select asolution-Then present to group for understanding, review &feedback

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4. Individual consultativestyle

- Define problem-Share definition with individuals-Solicits idea for problem cause & potential solutions-Individuals expertise in evaluation of alternativesolution

-After obtained info. Leader make choice the solution

to implement

5. Group consultative style - Define problem

-Share definition with group-Solicits idea for problem cause & potential solutions-Individuals expertise in evaluation of alternativesolution-After obtained info. Leader make choice the solutionto implement

6. Group Decision Style -Leader Define problem-Share definition with group-Group diagnose the cause of the problem-Group generates, evaluates & choose among the

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7. Participative Style -Group do the entire decision

making process-Leader roles as processfacilitator

8. Leaderless Team -No leader -Person changes from problemto problem

-Group do the entire decisionmaking process

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Individual Decision-making Styles

Styles

1 Deep deliberation

2 Impulsive decision

3 Escape

4 Compliance

5 Safe Playing

6 Procrastination

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CONSENSUS BUILDING

Identify the problem

Identifying alternative strategies

Prioritizing strategies

Selecting and detailing strategy

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Factors Hindering Consensus

Dominating by few

Withdrawal

Tendency to make a quick decision

Testing strengths

Avoiding confrontation

Trading or compromising

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Factors Facilitating Consensus

Concern for others

Listening

Identifying and using resources

Discussing underlying assumptions and logic

Testing consensus and disagreements

Process

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CONSENSUS COMPETENCIES

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Deciding priorities

Analyzing the problem at several levels

Generating alternatives

Discussing the consequences of each alternative

Developing criteria for decision making

Reviewing

PROBLEM SOLVING

2020

T k F ilit ti


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Task Facilitating

Initiative

Information seeking

Giving Information

Summarizing

Expressing opinions

Synthesizing

Focusing on strategies

Time keeping

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Beginning

EndAttention to problem solvingAnd group-building functions

Attention to taskfunctions

LifeofaG

roup

Three Types of Functions During the Life of a Group

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SALES TARGET AT KNBBANK

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OVERVIEW OF CASE STUDY

INTRODUCTION TO KNB BANK

GROWING PRIVATE SECTOR BANK.

SAFE AND SECURE BANKING.

ENTERED INTO JOINT VENTURE WITH A UK BASED INSURANCE

COMPANY.

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PROBLEMS WITH TIRUPURBRANCH

UNDER PERFORMANCE

LOW CUSTOMER SATISFACTION

LACK OF EMPLOYEE PARTICIPATION

PROBLEMS WITH MANAGEMENT

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APPROACH BY KNB BANK

APPOINTMENT OF NEW MANAGER

FIXED TARGETS FOR THE BRANCH

JOINT VENTURE WITH SECURE INSURANCE SERVICES.

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DIVERSIFICATION

HUGE GROWTH OF INSURANCE SECTOR

COMPETITIVE EDGE

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MEETING

DISCUSSED BRANCH PROBLEM

BANKS FORAY INTO INSURANCE SECTOR

ADDITIONAL RESPONSIBILITIES TO EMPLOYEES

LITTLE EMPLOYEE PARTICIPATION

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MEETING

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OUTCOMES OF MEETING

ENFORCEMENT OF SALES TARGET .

JOB ENLARGEMENT OF EMPLOYEES.

NO SUBSTANTIAL INPUTS FROM EMPLOYEES

RESENTMENT AMONG EMPLOYEES

ACTION PLAN WAS REJECTED BY EMPLOYEES

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OUTCOMES OF MEETING

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QUESTIONS FOR DISCUSSIONS

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RAJ MALHOTRA ENCOURAGED EMPLOYEEPARTICIPATION IN THE DECISION MAKING

PROCESS OF HIS BRANCH

TO COPE UP WITH THE NEW CHALLENGE

INCREASE IN DOMAIN KNOWLEDGE OF FINANCIALPRODUCTS

EMPLOYEES MISSED THE OPPORTUNITY TO EXPRESSTHEIR VIEWS.

INNOVATIVE IDEAS FROM THE SUBORDINATES

ABLE TO CONCLUDE MEETING/AGENDA IN AN EFFICIENTMANNER

EFFECTIVE WAY OF COMMUNICATION

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What could malhotra could do to buildconsensus leading to commitment for

action? MAKE AN ACTION PLAN FROM ALL THE EMPLOYEES OF THE

BANK

ABILITY TO DO WORK THROUGH THE OTHERS

MAKE THE QUESTIONNIARE TO JUDGE THE SKILLS OF

EMPLOYEES

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Malhotra attempted to developconsensus but failed. Which processes

impeded consensus building? MAKE THE TWO WAY COMMUNICATION

COACHING, MENTORING

EXAMPLES OF CORPORATES WHICH ARE IN

DIVERSIFICATION MAKE EMPLOYEES AWARE OF MISSION AND VISSION OF BANK

FEEDBACK FROM EMPLOYEES THROUGH A RESULT ORIENTEDWAY

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BENEFITS OF EMPLOYEE PARTICIPATION

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Employee Engagement

Opps for

upwardfeedback

Feelinginformed

Mgtcommitment

toorganisation

Managersfairnessre: issues

Treatingemployees

With t

Engagement

Performance

Intention toStay

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Decisional Process