Managerial Decision Making Complete

7/31/2019 Managerial Decision Making Complete

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PRINCIPLES OF MANAGEMENT

PROJECT

PROJECT OF

MANAGERIAL DECISION MAKING

SUBMITTED TO

SIR AMIR RIAZ

GROUP MEMBERS:

1. Muhammad Rizwan Iqbal

2. Falak Shair

3. Muhammad Zubair Tariq

4. Haroon Mushtaq

5. Rabia Muneer

MBA (REGULAR)

SECTION (H)

UNIVERSITY OF AGRICULTURE, FAISALABAD


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MANAGERIAL DECISION MAKING

DECISION:

According to Stephen Robbins

The process of selecting from several choices products or ideas,

and taking action, is called Decision Making.

The selection of a course of action from among alternatives

Decision making is the essence of management and all managers are judged on the basis

of outcomes of the decisions which they made.

LEVELS OF MANAGEMENT INVOLVED IN DECISION MAKING:

Managers at all levels are involved in decision making. That is, they make choices.

EXAMPLES:

Top Management:

Top Management makes following decisions about their organization

Defining Organizational Goals

Where to locate Manufacturing facilities?

How inter into new markets?


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Middle & Lower managers:

They are involved in following types of decision makingDecision about

Production schedules

Product quality problems

Pay Raises

Employee Discipline

DECISION MAKING PROCESS

Decision making is a process not just as a simple act of choosing among alternatives but

decision making is something straightforward. Effective decision making determines the

destiny of an Organizations life.

A manager has to take much kind of decisions in an Organization, like

How to quit his job to venture into business?

How to increase the sales per month?

How market can be hold on?

And how discipline can be created in an organization?


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STEPS INVOLVED IN DECISION MAKING:

Table 1.1

FLOW CHART DIAGRAM

WHAT IS PROBLEM?

Definition:

According to Stephen Robbins

A Problem Is an Obstacle that makes achieving a desired goal or purpose

difficult.

OR


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Any question or matter involving doubt, uncertainty, or difficulty is called a problem

Following are steps involved in Decision making.

1) Identifying the problem

Every Decision starts with a Problem.

A problem is a difference between desired and existing state

Suppose there is need of new cars for business and for use of Business. Here

we have a problem to purchase new car according to our desired condition.

2) Identifying the decision criteria

After identifying a problem the next step is to define the Decision Criteria that are

important to resolve problem.For instance the following Decision Criteria is set about cars.

Speed in CC

Color

ModelFuel System ( CNG, Diesel, Patrol )

After Sales Services

Reliability Table 1.2

2) Allocating the weight to criteria

If relevant criteria are not equally important the decision maker must wait

the items in order to give them priority in the decision.

The weighted criteria for our example are given below

Table 1.3

4.

Development of alternative:

In the fourth step the decision maker lists out available alternative about an item that

may resolve a problem. In this step a decision maker needs to be a creative person.

Speed in CC 50

Color 10Model 8Fuel System ( CNG, Diesel, Patrol) 15

After Sales Services 5

Reliability 12


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A manager may looks for the following alternatives of an item. Following may be

the alternatives in examples of cars.

Honda

Toyota Corolla

Suzuki

5). Analysis of alternative

After identification of alternatives the decision maker must evaluate each one. The

values are given to alternatives in order to carry out assessment.

The alternatives may be analyzed as follows.

CARS SPEED

(cc)

COLOR MODLE FUEL

SYSTEM

RELIBILITY TOTAL

Honda 48 08 05 12 09 82

Suzuki 40 06 07 09 08 70

Toyota 55 08 07 13 10 93

Table 1.4

6). Selection of an alternative

In the 6th step the best alternative is selected by the highest total in step 5.

A manager will prefer to select the Car of Toyota Company because its weighting is 93,

the highest than others.

7). Implementing the alternatives

In this step the decision is put into action. In above example of cars the decision will be

implemented by purchasing a car of Toyota Company.

8). Evaluating decision effectiveness

This is the last step in decision making process and here the result or outcome of

decision is evaluated.


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In this a manager assesses that either there is a problem or error in the decision which

he has taken and then that error is removed by redo another step or the whole process is

revised.

Decision making approaches

Teams, team leaders, supervisors and managers

often experience strife because of confusion regarding decision-making.

A variety of decision-making approaches can be used in different situations. Some main

and important approaches are:

Ideas or actions intended to deal with a problem or situation

Rational approach

The rational decision making model relies on a number of

assumptions, including that the decision maker has complete information, and is able to

identify all the relevant options in an unbiased manner, and choose the best option with

the highest utility.

OR

A rational decision making model provides a structured and sequenced approach to

decision making. Using such an approach can help to ensure discipline and consistency

is built into your decision making process.

Rational decision making model consists of a series of steps, beginning with

problem/opportunity identification, and ending with actions to be taken on decisions

made.

Assumptions of Rationality:

A decision maker or manager would:

Be objective and logical.


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Have a clear and specific goal and identified all viable alternatives.

Have carefully define problem.

Select alternative that maximizes likelihood of achieving the goal.

Make decision in the firm's best economic interests.

Table 1.5

Rational model strengths

The main strength of a rational decision making model is that

it provides structure and discipline to the decision making process. It helps ensure we

consider the full range of factors relating to a decision, in a logical and comprehensive

manner.

Decisions are consistent, value maximizing choices within specified constraints.

A rational decision making model can help us to make better decisions and thus help us

to be better managers.

Rational model criticism

Not all decisions are made on rational basis

Most problems, goals and preferences are not clear or well defined


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Not practical to know all possible alternatives

Time and cost constraints exist in all practical problems

Result are not maximizedin most cases

Bounded rational approach

The concept and associated decision model of bounded rationality was first discussed by

Herbert Simon in his celebrated book Models of Man published in 1957 by John Wiley

and Sons.

Bounded Rationality:

Behaves rationally within the parameters of a simplified decisionmaking process that is limited by an individuals ability to process information.

Accept solutions that are good enough.

Managers, usually because of time constraints, lack of information, and cognitive factors

usually make numerous daily decisions and seek to make the best possible decision

considering the circumstances, rather than the optimal decision.

This also implies that a particular manager faced with the same challenge but at

different time may make a different decision at that time.

Table 1.6

Because the human mind cannot formulate and solve complex problems with full

rationality, we operate within the confines of bounded rationality. We construct


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simplified models that extract the essential features from problem without capturing all

their complexity. We can then behave rationality within the limits of the simple model

Bounded rationality means that people have limits, or boundaries, on how rational they

can be. The organization is incredibly complex, and managers have the time and ability

to process only a limited amount of information with which to make decision. Because

the managers do not have the time or cognitive ability to process complete information

about complex decision, they must satisfy. Satisfying means that decision makers choose

the first solution alternative that satisfies minimal decision criteria. Rather than

pursuing all alternatives to identify the single solution that will maximize economic

returns, manager will opt for the first solution that appears to solve the problem, even if

better solutions are presumed to exist. The decision maker cannot justify the time andexpense of obtaining complete information.

Bounded Rational Assumptions:

Limited set of criteria.

Self-interest influences ratings.

Limited no. of alternatives.

Alternatives are assessed one at a time till a satisfying (or good enough)

alternative is found.

Politics influences acceptance and commitment of decision.

Example

An example of both bounded rationality and satisfying occurs when a manager on a

business trip spills coffee on his shirt just before an important meeting. He will run to a


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nearby clothing store and buys a poorly fitting shirt. Having neither the time nor the

opportunity to explore all the shirts in town, he satisfies by choosing a shirt that will

solve the immediate problem. Obviously it would be optimal to buy a proper fitting shirt.

But if the person is in a hurry and cannot wear a wet, coffee stained shirt, then buying

the poorly fitting one is appropriate. This is an example of bounded rationality.

In a similar fashion, manager sometimes generate alternatives for complex problems

only until they find one they believe will work.

Another Example:

The concept of bounded rationality can be illustrated by a simple purchasing example:

John wishes to buy a new and expensive stereo system. John, in trying to decide on a

particular brand consults with a number of friends, relatives as well as trade journals.

John decides to purchase Reasonable Stereo. While at the store, the saleswoman,

Janet, explains and proves to John that he can do much better with his budget if he goes

for Optimal Stereo.

Optimal Stereo gives better value for money with respect to cost, performance and

fidelity, design, warranties as well as style.

John nevertheless, even if he would receive more value for his money withOptimal

Stereo, Optimal Stereo being the rational choice, opts for Reasonable Stereo.

Intuitional approach

In the course of a day, you make hundreds of decisions and other

problem solutions, usually based on your intuition. These are called by such names as


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intuitive decisions, instantaneous decisions, gut feelings, leaps of understanding,

hunches, and arbitrary guesses, jumping to conclusions, hasty decisions, sixth sense,

quick guesses, snap judgments, and other terms.

Table 1.7

Intuition represents a quick apprehension of a decision situation based on past

experience, feelings and accumulated judgment but without conscious thought. Intuitive

decision making is not arbitrary or irrational, because it is based on years of practice and

hands-on experience that enable managers to quickly identify solutions without going


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through painstaking computations. In todays fast-paced, turbulent business

environment, intuition plays an increasingly important role in decision making. A

survey of managers found that nearly half of executives say they rely more on intuition

than on rational analysis to run their companies.

People make good decision using their intuition under extreme time pressure by

recognition.

When people build a depth of experience and knowledge in a particular area, the right

decision often comes quickly and effortlessly as recognition of information that has been

largely forgotten by the conscious mind.

Good intuitive decision making skills

Alexis Carrel (French surgeon, biologist,Nobel Prize in Physiology or Medicine) Said:

All great men are gifted with intuition. They know without reasoning or analysis, what

they need to know.

This is very important to everyone and especially for those in managerial positions. A

good intuitive base depends on a great number of decision making skills, such as:

Curiosity

A good memory

Emotional stability

Freedom from biases

An extensive body of knowledge

Ability to distinguish between relevant and irrelevant concepts

Good reasoning and analytical ability

Creative ability

A variety of experience memories & accurate interpretation of them

Memory of other peoples experiences and accurate interpretation of them

Example


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Typical examples where intuition can play an important role in making

decisions are:

Choosing your life partner.

Selecting the right car to buy.

Evaluation of a job.

Decision about an education.

Selecting a meal when eating out.

Selecting the next book to read.

Decide how to dress for today, and so on.

Another Example:

Firefighters make decision by recognition what is typical or abnormal about a fire, based

on their experience.

Similarly, in the business world, managers continuously perceive and process

information that they may not consciously be aware of, and their base of knowledge and

experience help s make them decisions that may be characterized by uncertainty and

ambiguity.

Group decision making

Definition

Group decision making is a type of participatory process in which multiple

individuals acting collectively, analyze problems or situations, consider and evaluate

alternative courses of action, and select from among the alternatives a solution or

solutions.

Group decision making is a situation faced when people are brought together to solve

problems in the anticipation that they are more effective than individuals under the idea

ofsynergy.

The number of people involved in group decision-making varies greatly, but often

ranges from two to seven. Decision-making groups may be relatively informal in nature,
http://en.wikipedia.org/wiki/Synergyhttp://en.wikipedia.org/wiki/Synergy


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or formally designated and charged with a specific goal. The process used to arrive at

decisions may be unstructured or structured. The nature and composition of groups,

their size, demographic makeup, structure, and purpose, all affect their functioning to

some degree. The external contingencies faced by groups (time pressure and conflicting

goals) impact the development and effectiveness of decision-making groups as well.

In organizations many decisions of consequence are made after some form of group

decision-making process is undertaken. However, groups are not the only form of

collective work arrangement. Group decision-making should be distinguished from the

concepts of teams, teamwork, and self managed teams. Although the words teams and

groups are often used interchangeably, scholars increasingly differentiate between the

two. The basis for the distinction seems to be that teams act more collectively and

achieve greater synergy of effort.

GROUP DECISION MAKING METHODS

There are many methods or procedures that can be used by groups. Each is designed to

improve the decision-making process in some way. Some of the more common group

decision-making methods are

Brainstorming Dialectical inquiry

Nominal group

technique

Delphi technique

Table 1.8

Brainstorming


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Brainstorming involves group members verbally suggesting ideas or alternative courses

of action. The "brainstorming session" is usually relatively unstructured. The situation at

hand is described in as much detail as necessary so that group members have a complete

understanding of the issue or problem. The group leader or facilitator then solicits ideas

from all members of the group. Usually, the group leader or facilitator will record the

ideas presented on a flip chart or marker board. The "generation of alternatives" stage is

clearly differentiated from the "alternative evaluation" stage, as group members are not

allowed to evaluate suggestions until all ideas have been presented. Once the ideas of the

group members have been exhausted, the group members then begin the process of

evaluating the utility of the different suggestions presented. Brainstorming is a useful

means by which to generate alternatives, but does not offer much in the way of process

for the evaluation of alternatives or the selection of a proposed course of action.

One of the difficulties with brainstorming is that despite the prohibition against judging

ideas until all group members have had their say, some individuals are hesitant to

propose ideas because they fear the judgment or ridicule of other group members. In

recent years, some decision-making groups have utilized electronic brainstorming,

which allows group members to propose alternatives by means of e-mail or another

electronic means, such as an online posting board or discussion room. Members could

conceivably offer their ideas anonymously, which should increase the likelihood that

individuals will offer unique and creative ideas without fear of the harsh judgment of

others.

Dialectical inquiry

Dialectical inquiry is a group decision-making technique that focuses on ensuring full

consideration of alternatives. Essentially, it involves dividing the group into opposing

sides, which debate the advantages and disadvantages of proposed solutions or

decisions. A similar group decision-making method, devils advocacy, requires that one

member of the group highlights the potential problems with a proposed decision. Both

of these techniques are designed to try and make sure that the group considers all

possible ramifications of its decision.


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Nominal group technique

The nominal group technique is a structured decision making process in which group

members are required to compose a comprehensive list of their ideas or proposed

alternatives in writing. The group members usually record their ideas privately. Once

finished, each group member is asked, in turn, to provide one item from their list until

all ideas or alternatives have been publicly recorded on a flip chart or marker board.

Usually, at this stage of the process verbal exchanges are limited to requests for

clarificationno evaluation or criticism of listed ideas is permitted. Once all proposals

are listed publicly, the group engages in a discussion of the listed alternatives, which

ends in some form of ranking or rating in order of preference. As with brainstorming,

the prohibition against criticizing proposals as they are presented is designed to

overcome individuals' reluctance to share their ideas. Empirical research conducted on

group decision making offers some evidence that the nominal group technique succeeds

in generating a greater number of decision alternatives that are of relatively high quality.

Delphi technique

The Delphi technique is a group decision-making process that can be used by decision-

making groups when the individual members are in different physical locations. The

technique was developed at the Rand Corporation. The individuals in the Delphi "group"

are usually selected because of the specific knowledge or expertise of the problem they

possess. In the Delphi technique, each group member is asked to independently provide

ideas, input, and/or alternative solutions to the decision problem in successive stages.

These inputs may be provided in a variety of ways, such as e-mail, fax, or online in a

discussion room or electronic bulletin board. After each stage in the process, other group

members ask questions and alternatives are ranked or rated in some fashion. After an

indefinite number of rounds, the group eventually arrives at a consensus decision on the

best course of action.

Types of decisions


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Manager in different types of organization Business facing different types of problem

Decisions as they totally depend upon the nature or kind of Business .As manager can

make one of two different types of Decisions.

Programmed decision

Non Programmed decision

Now we explain them one by one by different examples

Programmed decisions

Repetitive decisions that can be solved handle by

using routine approaches. It applies on structure problem.

Now we explain the stevedored problem

Structured problems

A clear straight forward familiar and easily defend problems

Example

Breakup of needle of machines it all ready defined problems and can be handled by

routine decision we will purchases replacement of old

! Non availability of Raw material in city we will purchases if from another city if easilyand clearly problem we can handle if easily

Non-programmed decisions

A managers can it solve all problem by using

programmed decision. Many time managers feeling unstructured problem that can it be

solved by using programmed or routine decision we apply non-programmed decision to

solve it

A unique and non recurring decision that required a custom made solution

Custom made solution


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A solution by himself new which not apply in routine or

It apply on non structured problems

Unstructured problems A problems that if new or unusual and for whichinformation is ambiguous or incomplete

Now we explain them with examples

ECONOMISE BAD CONDITION

Like political instability inflation, pressure groups how

we removed these problems to settle Business.

Decision making conditions

When managers making decisions he/she may face there different conditions

1) CERTAINITY

2) RISK

3) UNCERTAINITY

Now we explain one by one

1)Certainty

A situation in which a decision maker can make correct or pet decision

because the outcomes or known

a)Depositing money at bank or certain percentage of interest here manager know the all

the rate of all the banks and certain about the decision this situation is called certainty.

b) Decision in joining job at 75000 monthly we can take decision involving job

offering by certain organization.

2) Risk


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A situation in which the decision makes is able to estimated the like hood of certainoutcome

Example

Run the business of the same nature in the same place or increasing the

business like increased the business of the stationary which we already doing

2 addition of one more branch of college in another city on the behalf of goodwill

3) Uncertainties

A situation in which the decision maker has not the certainty or not

the reasonable probability estimates available simply the decision maker cannot estimate

the out comes

Example

In a job opportunity you submitted the C.V but you dont know the outcomes

Purchase of new car or firstly purchase but you dont know the outcomes of car

facilities flexibility consume of CNG petrol

Decision making stylesThe person making decision is totally depend upon his or her thinking styles

Your thinking styles reflect two things

1 source of information you tend to use

It may be external logic facts figure or

internal source of information feelings intuition

2 process to that information

Linear ration logic facts and figure nonlinearintuition insights emotion feelings

Linear thinking styles


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A decision styles characterizes by persons performance for

external data and facts processing that information through rational facts and figure

Example

In job opportunities you are as employer you taking interview you dont hire

the employee at the time interview you get information about employee from external

source like past organization about performance characteristics job style after getting

information you hire employee this is linear decision making style

Non linear decision style

A decision making style characterize by a person internal

source of information feelings intuition past experience and process that through internal

feelings judgments based

Example

1 at the time of hiring employee you dont took information from outside about personperformance hire without that

2 at the time of purchase of TV you dont get information about TV performance colorresult but purchase on intuition feelings basis this in non linear decision making

Biases and errors in decision making


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Managers make decisions they

dont use only the rules and styles discuss before but they often use heuristics to simplify

their decision heuristics can be useful because they help to make decision in complex

situations. Than what does happen, this lead to the biases and errors in the decision

making.

What is a bias, the inclination or prejudice for or against one thing or person. So this

mean in decision making the biases are the favorable thinking for particular alternative

in the mind of decision maker.

And the error in the wrong selection in the decision making because of some reason that

are discuss below

Table 1.9

Immediate gratification

This is the situation when decision maker take some decision to

get some immediate benefit or to avoid some punishment at the time

Confirmation

Because of past good experience or having some confirmation about the

any of one alternative among many the decision can be biased

Sunk costs

when decision maker dont want to take high risk than to avoid the element of

risk he may not select the best alternative


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Anchoring effect

First impression is very important thing so the decision may be biased

because of first impression that is anchoring effect

Availability

Due to unavailable information the decision may have error or the decision

totally depend on the available information

Selective perception

Perception mean thinking of a person about particular thing so

decision made on the perception not on the information can have error or may be biased

Self serving

Mean to make decision to provide benefit to his self and to provide benefit tothe organization

Framing

When some particular information are provided specially or highlight some

information before the decision maker

Randomness

All the information are not included in the decision making instead some

information are included and decision based on sample of information is biased

Hind sight

When a person falsely believe on a certain outcome of a decision and made

his decision on his false believe

Representation

Decision based on the representation of the information to the decision

maker and if the representation of information in biased than decision will become

biasedOver confidence

Because of over confidence the decision may have any error, the

decision maker make decision because of his past experience and his confidence

Overview of managerial decision making


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All the factor describe

above have their effect in the decision of any manager and that is shown by

the diagram


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Practicalstudy

Introduction of organization

Organization name

Organization which we have visited is the

Klash (private) limited

Address


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117/J.B. Near Paharang Drainage, Millat Road,

Dhanola, Faisalabad

Products

this organization is a textile firm and deal in garments of men and women

normally make

shirt for men

upper for women

they also have their dying unit and die the cloths

We have met the HR manager and the assistant manager of human recourse and also

meet the production manager and quality control manager

Authority hierarchy

Table 2.1

Than at the end the non managerial staff

Use of different approachesIn the klash private limited most of the manager which

we have met fallow the intuitional approach in their decision making but this practise is

more in the top manager and less in the lower level of managers

They people hardly use rational approach as this approach is difficult to fallow in the

real life or you can say in the practical situation as manager often dont have all the data

and all information about the all alternative


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Some low level managers use bounded rational approach but the use of different

approach is depend on the situation

Example

the hiring of employees is the duty of the assistant manager and one of the

assistant manager is the senior than other assistant manager as he has 5 year more

experience than other use the intuitional decision and highly relay on his experience and

skill

but the other how is junior than him is make same kind of decision after proper

evaluation of the all the alternative

On the other hand the top manager thing that they have enough experience to take daily

decision about the salary of the non managerial staff and low level managers

Conditions of decision making

There are all three conditions exist in the

organization and all the manager try to eliminate the risk and uncertainty condition

typically low level of managers

In the condition of certainty the managers feel more comfortable but at the risk or the

uncertain condition they try to avoid to take any decision

to avoid the risk condition they give their authority to their head and leave the decisionon their head

that is why most of the decision are taken by the top management

Process of decision we have observed the process for a decision that is to hire a

person for human recourse manager assistant first there is the need of the person

because of the work load of the office because only four men working at the office than

they specified the person ability that they want and give weights to his/her different

abilities as a person MBA specialized in human resource and have good communication

silks than they gather different information and have many applicant for that post but


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have not yet take any decision or pick any applicant because when we visited the firm

they are taking interviews of the applicant

Structured problems and programme decisions

We have seen some example

of structured problems and programmed decision making in Klash private limited

Example

in the case of reward of the employee for their overtime work manager take

decision on the bases of the overtime they have spend in the organization

In production department the structured problem is when the cloth is die with dark

color or the colour which is not required than their solution is to die that cloth with dark

color

Unstructured problems and non programmed decision

When the lot of cloth

have the stain of oil or grease this is a unstructured problem and the quality control

manager have to tell the specific operation or process to remove that stain form cloth

Group decision

Company arrange many meeting some of the periodic but some are

for some special purpose

but the organization use only the one technique of group decision making and that is the

nominal group technique but some assistant manager also ask to one and other for some

decision

Some of the meetings are of daily bases some are on weekly, than monthly and annually

Biases in the decisionThere are many biases in their decision making even in the

matter that they handle daily and the biases exits in the low level of managers as well as

in the top managers

Low level managers

In lower management the biases are the self serving and prefer

the relative if they have any situation in which there any friend or relative can be


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beneficial than they often prefer the people that have some importance for them and

may be some other alternative can be more beneficial for the organization

They also have a bias of immediate gratification and some time try to get some

immediate benefit or to avoid the punishment at the time

Top management

In top management most common bias is the over confidence on

their skills and their experience because they have many years experience in Klash

The human resource manager highly relay on his experience and dont even get all

information that can be easily available to him for some normal decision in respect of

the affect of the decision on the firm

Manager also has a point of view that the females are more efficient than male

In short low level management dont take many decision and normal to take a decision

they depend on the information and numeric data

And the top level management normally responsible for more decisions and relay on the

experience and skills and the information provided to them by subordinates


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Short comings

OR

Gaps

In the decision making of

the managers of

Klash private limited

Authority hierarchy

The authority hierarchy of this organization is good and well

to make the good decisions but the existence ofdeputy managers have no importance

the functions of deputy managers and the assistant manager are almost same

The assistants of managers and the deputy managers are to help the managers


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Information gathering

The way the all the manager give importance to the step

of information gathering is no good in many decision we have observed that the

managers dont give proper attention to this step

This practice is most common in the top level of management without the information

the decision have more chance to be wrong

The reason of this is the highly relay on the personal skill and the experience of the

managers

Approaches of decision making

Some time the approaches use by the

managers is not good according to the situation of the decision as the decision of the

hiring the non managerial staff the manager use the intuitional approach as the y relay

on the experience so this is the that kind of situation the where according to our point of

view this approach is not suitable according to situation and in next chapter the solution

of this situation we be suggested

Conditions for decision making

As all the conditions of that three almost

exist in every organization and every manager try to minimize the uncertainty and to

minimize the risk in any situation

The behavior of the manager specially low level management at the uncertainty and in

risk is not good they try to leave the decision on their head when they have any situation

where risk is involve the assistant managers of human resource dont take decision and

try to avoid decision that is big hindrance in the innovation and the improvement in the

skills of personnel


The company use only one group decision making

technique and that is the brain storming technique

In the meetings that are held in the organization on daily bases, weekly, monthly, and

annually is followed by the brain storming technique


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And the number of group decision making is also rare in the organization mostly

the decisions are taken by the individuals

There is no existence of dialectical technique this is the importance technique in

the organization the matter with great importance

And this is the new age and the developing all the resources all the big

organization use video conferencing that is Delphi technique this is the very

important you can say the necessary thing that a organization should have when

the important person cannot be present as the spot but in the decision there is the

need of that person for decision

Biases

The biases make the decision wrong and make the error in the decisions

We have found some biases in the decisions of the managers that are as under

Biases of low management and the top management are different so we have make the

two heading of

1) In lower management

2) In top management

In lower management

In lower management especially the assistant manager of

human resource management has most common are

Immediate gratification


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This is the common bias is that is presence in the lower

management the assistant manager to avoid the work load or to finish their work in time

they take the decision that make affect the work load and reduce the work load but that

decision may not be beneficial for the organization 2nd thing is

Self serving

They have the attention to serve their self or to support their relative or the

friends

In the hiring an employee they are keen to hire the person which have some relation

with them and may be any other person may be more profitable for organization

And also in the firing of person they protect specific person not base on their skills but

on their relation with them

Sunk cost As we have already describe that the manager are not innovative and try to

minimize the risk and not take decision in risky situation so when there is the situation

where one alternative is can be very risky the managers avoid that alternative and chose

other one

In top management

The biases that top management have is somehow different

from the biases of the low level of management and that are

Over confidence

Because of experience the human resource manager have the bias of

the over confidence and thing that the decision made by him always right and he dont

give proper attention to the information gathering and dont properly process the

information that are provide d to them

Gender discrimination

Gender discrimination also is the important bias and while

talking to him we have knew his view that male can work more efficiently in the human


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resource area so he give wrong importance to the male applicant while taking interview

for assistant manager on the female applicant

Decision making ratio by all the managers

This is often describe above

that the most of the decision are made by the top management the ratio between the top

management and the low level of management is not appropriate the lower rank

managers are very rigid and are not innovative at all

in short the company have some short coming in the decision making and the

suggestion will be made in the next portion but the decision making in Klash private

limited is good


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Suggestion and

opinions for the

short coming and

error in the

decision making at

Klash (pvt) ltd

There are many good things we have found in that organization an some bad thing

always exits with good one but we should always try to eliminate that bad thing here are

some measures to remove the errors in the decision making of the manager of Klash


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All the suggestions and recommendation would be beneficial for the organization and

these suggestions are made keep in view that the textile industry always in the need of

some innovation as there is great competition in this industry

UN appropriate authority hierarchy

It is describe above that the firm have

CEO than director than departmental managers than deputy managers than assistant

managers after these supervisor

The deputy managers and the assistant manager have same function and are almost of

same rank so they cant influence each other but in reality the function of one or the

working of assistant manager is disturbed by the deputy manager and vice versa

These two different authorities are not good so the organization should remove the

deputy manager in their authority and make deputy manager also as the assistant

manager

The rank of deputy manager may cause the leg puling in the organization that may not

good for organization

Proper information collection

Top management does not take interest to

collect information in relatively some less important matter but these decisions can

cause great impact on the efficiency of the organization so managers should take more

interest to collect proper information for every kind of decisions this will increase the

efficiency of the firm

Suggestion to assistant manager

One of the assistant manager is relatively senior

than his other peers so at the time of hiring employee he is more intuitional than others


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he should try to maximize the decision and use bounded rational approach in his

decisions

Try to reduce the fear in decision making

There is immense fear in the mind of

low level of managers to take any risky decision so they dont take this kind of decision

and try to avoid these situation that cause the delay in working and the innovation is the

mind of employees top management should give them confidence to take some risky

decisions to smoothly run the organizational work

Group decision making Company only use one technique they should fallow

two points

There should be the concept of video conferencing in the organization the

absence cause the delay in the decision making in fact organization need a big

meeting room equipped with the facilities of video conferencing

Dialectical group technique is also a good thing to practice is the important

matter top manager should make two groups of for that decision one in the favor

of that particular decision and one against in this way the proper evaluation of

anything can be made is this way manager can maximize the decision is less time

and resources

Remove biases


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There are different biases in low level of management and in top management

that cause the errors in the decision making so there should be some measures to

remove the biases

Measures to remove biases

Following are some measures to remove the biases

There should be some proper check and balance on the assistant managers and

some time surprise inspection by the boss to avoid the biases in the lower level of

management

There top management should arrange the some meeting or some learning

classes to tell their managers how to evaluate the information and how to

maximize the decision at certain situations

The biases in the top management can be remove by the self determination of the

top management they should try to give proper time to all decisions

If they dont have enough time than organization should arrange the person how

can reduce the work load from the top management

Delegation of powers to low level

Top management has more work load of decisionso the policies should be made to delegate some power to the low level for the time

saving and the innovation and confidence in employees

Table of Contents

Page#


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Summary

Theory

What is decision

Decision making process

Decision making Approaches


Types of decisions

Decision making conditions

Decision making styles

Biases and error in decision making

Practical studyIntroduction of organization

Authority hierarchy

Conditions of decision making


Biases and error

Short comings OR Gaps

Authority hierarchy

Approaches of decision making

Conditions for decision making


Biases

Suggestion and opinions

Un appropriate hierarchy of authority

Proper information collectionGroup decision making

Remove biases

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Summary

The topic of our project is the Decision Making and the first

thing is the theory of the decision making and we have write

the different approaches, process of decision making, group

decision making, conditions, styles, types and biases of

decision making and to analyze the theory we have visited

the Klash private limited (textile firm) and have observed

the different practices follow in the organization every firm

have some short comings as Klash we have write down that

gaps like absence of some group techniques and the biases

in the decision making of the managers than at the end the

suggestion and recommendation for the organization like to

remove the deputy manager and to have the Delphi

technique in the decision making to improve their standard

of decision making.


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Acknowledgement

In the preparation of our project of the Principle of

Management we are very thank full to our kind teacher

Sir Amir Riaz for his kind guidance and to the institute of

Business Management Sciences to provide us appropriate

facility for our project and to give us their reference to visit

the any organization and also the Klash private limited and

the manager for giving us their precious time and at the end

all other person who have any way help us to complete our

work


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Decision Making

Documents

Managerial Decision Making Complete