MTP - Decision Making

8/7/2019 MTP - Decision Making

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Decision Making Process

The decision-making process involves the following steps:

y Define and identify the problem.y Develop potential alternatives.y Analyze the alternatives.y Select the best alternative.y Implement the decision.y Establish a control and evaluation system.

1. Define the problem

The decision-making process begins when a manager identifies the real problem.The accurate definition of the problem affects all the steps that follow; if theproblem is inaccurately defined, every step in the decision-making process will bebased on an incorrect starting point. One way that a manager can help determinethe true problem in a situation is by identifying the problem separately from itssymptoms.

The most obviously troubling situations found in an organization can usually beidentified as symptoms of underlying problems. (See Table 1 for some examples of

symptoms.) These symptoms all indicate that something is wrong with anorganization, but they don't identify root causes. A successful manager doesn't just attack symptoms; he works to uncover the factors that cause thesesymptoms.



TALE 1 Symptoms and T heir Real Causes

Symptoms Underlying Problem

Low profits and/or declining

sales

Poor market research

High costs Poor design process; poorly trained employees

Low morale Lack of communication between management andsubordinates

High employee turnover Rate of pay too low; job design not suitable

High rate of absenteeism Employees believe that they are not valued

Identify limiting factorsAll managers want to make the best decisions. To do so, managers need to have theideal resources ³ information, time, personnel, equipment, and supplies ³ andidentify any limiting factors. Realistically, managers operate in an environment thatnormally doesn't provide ideal resources. For example, they may lack the properbudget or may not have the most accurate information or any extra time. So, theymust choose to satisfy ³ to make the best decision possible with the information,resources, and time available.

2. Develop potential alternatives

Time pressures frequently cause a manager to move forward after considering onlythe first or most obvious answers. However, successful problem solving requiresthorough examination of the challenge, and a quick answer may not result in apermanent solution. Thus, a manager should think through and investigate severalalternative solutions to a single problem before making a quick decision.

One of the best known methods for developing alternatives isthrough brainstorming, where a group works together to generate ideas and

alternative solutions. The assumption behind brainstorming is that the groupdynamic stimulates thinking ³ one person's ideas, no matter how outrageous, cangenerate ideas from the others in the group. Ideally, this spawning of ideas iscontagious, and before long, lots of suggestions and ideas flow.



3. Analyze the alternatives

The purpose of this step is to decide the relative merits of each idea. Managers

must identify the advantages and disadvantages of each alternative solution beforemaking a final decision.

Evaluating the alternatives can be done in numerous ways. Here are a fewpossibilities:

y Determine the pros and cons of each alternative.

y Perform a cost-benefit analysis for each alternative.

y Weight each factor important in the decision, ranking each alternativerelative to its ability to meet each factor, and then multiply by a probability

factor to provide a final value for each alternative.

Regardless of the method used, a manager needs to evaluate each alternative interms of its

y Feasibility ³ can it be done?

y Effectiveness ³ how well does it resolve the problem situation?

y Consequences ³ what will be its costs (financial and nonfinancial) to theorganization?

4. Select the best alternative

After a manager has analyzed all the alternatives, she must decide on the best one.The best alternative is the one that produces the most advantages and the fewestserious disadvantages. Sometimes, the selection process can be fairlystraightforward, such as the alternative with the most pros and fewest cons.Other times, the optimal solution is a combination of several alternatives.

Sometimes, though, the best alternative may not be obvious. That's when a

manager must decide which alternative is the most feasible and effective, coupledwith which carries the lowest costs to the organization. (See the precedingsection.) Probability estimates, where analysis of each alternative's chances ofsuccess takes place, often come into play at this point in the decision-makingprocess. In those cases, a manager simply selects the alternative with the highestprobability of success.



5. Implement the decision

Managers are paid to make decisions, but they are also paid to get results from

these decisions. Positive results must follow decisions. Everyone involved with thedecision must know his or her role in ensuring a successful outcome. To makecertain that employees understand their roles, managers must thoughtfully deviseprograms, procedures, rules, or policies to help aid them in the problem-solvingprocess.

6. Establish a control and evaluation systemOngoing actions need to be monitored. An evaluation system should provide

feedback on how well the decision is being implemented, what the results are, andwhat adjustments are necessary to get the results that were intended when thesolution was chosen.

In order for a manager to evaluate his decision, he needs to gather information todetermine its effectiveness. Was the original problem resolved? If not, is hecloser to the desired situation than he was at the beginning of the decision-makingprocess?

If a manager's plan hasn't resolved the problem, he needs to figure out what wentwrong. A manager may accomplish this by asking the following questions:

y Was the wrong alternative selected? If so, one of the other alternativesgenerated in the decision-making process may be a wiser choice.

y Was the correct alternative selected, but implemented improperly? If so,a manager should focus attention solely on the implementation step to ensurethat the chosen alternative is implemented successfully.

y Was the original problem identified incorrectly? If so, the decision-makingprocess needs to begin again, starting with a revised identification step.

y Has the implemented alternative been given enough time to be

successful? If not, a manager should give the process more time and re-evaluate at a later date.



T ypes of Managerial decision

PROGRAMME AND NON-PROGRAMME DECISIONS: -

Programmed decisions are concerned with relatively routine and repetitive problems.

Information on these problems is already available and can be processed in a pre-planned

manner. Such decisions have short-term impact and are relatively simply. They are, made

at lower levels of management. These decisions require little thought and judgment. The

decision maker identified the problem and applies the predetermined solution.

For example, if an employee is habitually late comer he can easily be dealt with under the

established procedure. Non-programmed decisions deal with unique or unusual problems.

Such novel or non-repetitive problems cannot be tackled in a predetermined manner. There

are no cut-and-dried of executive judgment and deliberation is required to solve them. To

order firing on a rioting mob, to impose curfew in the city, opening of a new branch are

examples of such decisions. The ability to make good non-programmed decisions help to

distinguish effective executives from non effective executives.

For Example: Mc Donald's decides to order beef patty stocks because the stocks are

three-quarters empty. Programmed decisions making are a routine that you make every

time so that the organization run smooth. Managers can develop rules and guidelines to

regulate all routine organizational activities. Most decisions are related to daily activities.

ROUTINE AND STRATEGIC DECISIONS:-

Routine decisions are made repetitively following certain established rules, procedures and

policies. They do not require collection of new data and can be taken without much

deliberation. Such decisions are taken generally by the executives at the middle and lower

management levels. Strategic or basic decisions, on the other hand, are more important

and are generally taken by the top management organizations. They relate to policy

matters and so require a thorough fact finding and analysis of the possible alternatives.

Launching a new programme, location of a new plant, installation of a computer system areexamples of strategic decisions.

For Example: When a personal officer hires a new sales employee, the first line supervisor

changes the part of operation, a sales manager apportions him with new branch, and the

accountant makes entries into his books. It·s like a routine decision taken by the employees



who are repetitive in nature and they involve the application of familiar principles to a

situation.

POLICY AND OPERATIVE DECISIONS:-

Policy decisions are of vital importance and are taken by the top management. They effect

the entire organization. They are generally taken by top management or the very senior

executives of the organization. But operating decisions are taken by the lower management

in order to put into action the policy decisions.

For Example: The bonus issue is a policy matter which is to be decided by the top

management and calculation of bonus is an operating decision which is taken at the lower

levels.

Proactive and Reactive Decisions

Proactive decisions are those made in anticipation of certain changes in the external

environment while, reactive decisions are those taken as a result of changes happenend in

the environment. The success of a proactive decision requires accurate predictions of the

future trends, while a successful reactive decision requires very swift action in response

to the changes in the environment.

For Example: Banks use thick steel and concrete vaults with advanced electronic systems

to prevent and detect break-ins. Many companies, from convenience stores to casinos, usecameras to record business activities, the idea being that cameras both deter theft and

help identify perpetrators when thefts do occur. All of these examples represent

proactive approaches to securing a company's infrastructure.

Intuitive and Systematic Decisions

Systematic decisions a manger approaches the problem to take a decision in a step by step

and analytical fashion. Managers taking such decision first make an action plan, then

gather information required to facilitate the decision making process. On contraryintuitive decisions are more flexible and spontaneous at times may be creative. They deal

with problems considering ´hunchesµ or ´gut-feelingsµ.

For Example: Mc Donald·s franchise owner in India systematically planned the menu, need,

targeted teenagers and children·s and accordingly decided the programme. This is

referred as systematic decision.



Philippines

The Philippines (Filipino: Pilipinas, officially known as the Republic of the Philippines,

Filipino: Republika ng Pilipinas), is an island country located in Southeast Asia with Manila

as its capital city. The Philippines comprises 7,107 islands in the western Pacific Ocean,

sharing maritime borders with Indonesia, Malaysia, Palau, the Republic of China, the

People's Republic of China, and Vietnam. The Philippines is the world's 12th most populous

country with a population of 90 million people. Its national economy is the 46th largest in

the world with an estimated 2008 gross domestic product (GDP) of over US$154.073

billion. There are more than 11 million overseas Filipinos worldwide, about 11% of the total

population of the Philippines. It is a multi-ethnic country. Ecologically, The Philippines is

considered to be among 17 of the most megadiverse countries in the world.

CAPITAL: Manila

LOCATION: Southeastern Asia, archipelago between the Philippine Sea and the South

China Sea, east of Vietnam . It is surrounded by by the Philippine Sea from the east, by

the South China Sea on the west, and by the Celebes Sea on the south.



SOCIAL & CULTURE

Philippine culture is a fusion of pre-Hispanic Austronesian

(Malayo Polynesian) civilizations mixed with Hispanic, and

American. It has also been influenced by Chinese, Arab, and

Indian cultures.

The Hispanic influences in Philippine culture are derived from theculture of Spain. These Hispanic influences are most evident inliterature, folk music, folk dance, language, food, art, andreligion. Spanish colonialists introduced Iberian, and Mexican dishes, such as arrozvalenciana, to those of the Mexican cuisines (adobo preparation is the only exception asPhilippine adobo is made with soy sauce, vinegar, garlic, bay leaves, and peppercorns unlikethe tomato, corn, avocado, and potato in Mexican adobo). Philippine cuisine is a mixture of

Asian, Oceanian, European, and American dishes.

Filipino and English are the official languages of the Philippines, but more than 180languages and dialects are spoken in the archipelago.

Philippine tradition exhibits festivities known as barrio fiestas

(district festivals) to commemorate their patron saints. One of

the most visible Hispanic legacies is the prevalence of Spanish

surnames, and names among Filipinos. This peculiarity, unique

among the people of Asia, came as a result of a colonial decree,

the Clavería edict, for the systematic distribution of family

names, and implementation of the Spanish naming system on the

inhabitants of the Philippine Islands. A Spanish name, and

surname among the majority of Filipinos does not always denote Spanish ancestry.

Filipinos are lovers of art. Their art is reflected in the things they do and way they believe

in daily life. The best examples of architecture of the sixteenth to the nineteenth century

are the churches built by the Spaniards with the help of the Filipinos. They are structures

built in Baroque style with elaborate curved arches, altars and images of saints.

THE CATHOLICS CELEBRATIONS AND PRACTICES:

In spite of the diverse religious groups in the Philippines each with its particular practices;

the Filipinos believe in only one God who is almighty and omnipotent. Religious practices

show concern and love for one's neighbors. Among the Catholics, the Ten Commandments

set the standard of behavior. They keep images of their saints at home and every church



has a patron saint. The Lenten season is as significant to the Filipinos as Christmas.

Christian Filipinos commemorate the passion and death of Jesus Christ with as much

sincerity and seriousness as His birth.

THE FIESTA CELEBRATIONS:

Fiestas are held on the birthday of the patron saint

celebrated with the holding of a novena, a nine-day

devotion of masses followed by special prayers of

praise to the patron saint. The plaza around t5he

church is decorated with colorful buntings. On the

ninth day which is the feast day of the saint, a high

mass is celebrated by one or several priests. Suddenly

the plaza is transformed into a mini-market whereready-made clothes, toys, fruits, and native delicacies

are sold. A brass band plays after the mass and then makes a round of the immediate

vicinity playing popular Filipino songs, marches and kundimans. This sets a happy, festive

mood in the community with residents going on splurge entertaining relatives and friends

from other towns.

The town fiesta is an event that the residents look forward to. Three or four months

before the fiesta the family takes good care of a piglet and chickens earmarked for the

fiesta. Of course, the fiesta is an occasion when friends and relatives can be together,enjoy each other's account of the past year's experiences and partake of the palatable

dishes prepared for a day.

IMPORTANT RELIGIOUS GROUPS

The Philippines is one of two countries in Asia, and the

Asia-Pacific region with Roman Catholic majorities;

the other being East Timor. The Philippines is

separated into dioceses of which the Archdiocese of

Manila is the main primacy. About 90% of Filipinos

identify themselves as Christians, with 81% belonging



to the Roman Catholic Church. 2% are composed of Protestant denominations, and 11%

either to the Philippine Independent Church, Iglesia ni Cristo, and others.The Philippines is

also well-known for its Baroque-style churches. They are a part of the long list of

UNESCOWorld Heritage Sites.

Approximately 5% of Filipinos are Muslims, and are locally known as Moros, having been

dubbed this by the Spaniards due to their sharing Islam with the Moors of North Africa.

They primarily settle in parts of Mindanao, Palawan, and the Sulu archipelago, but are now

found in most urban areas of the country.

Most lowland Muslim Filipinos practice Islam, although the practices of some Mindanao's

highland Muslim populations reflect a mixture with Animism. There are also small

populations of Buddhists, Bahá'í, Hindus, Sikhs, and animists, which, along with other non-

Christians, non-Muslims and those with no religion, collectively comprise 2.5% of thepopulation.

Philippines religiosity

religion percent

Christianity 90%

Islam 5%

Others 5%

Lifestyle

ABOUT T HE FILIPINO CLOT HES:

Their ancestors, both men and woman wore two-piece clothes; a collarless, short-sleeved

jacket and strip of cloth wrapped around the waist and in between the legs. The women

wore the baro, a wide-sleeved jacket and a skirt of cotton cloth wrapped about the waist.

The Filipina wardrobe was later modified. They say is a long skirt which touches the



floor. It has a kola or train which means the woman holds to keep it clean she moves.

Printed satin is the usual material used for the says; brocade for gala use.

Over this says, a tapis with tassels on the edges is worn. Beneath the saya and tapis is

the enagua, a slip with lace edging. The elegant clothes of the Filipino women areproperly taken care of. Women give special attention to their clothes especially those

made of fibers such as fina or sinamay.

ABOUT T HEIR MANNER OF DRESSING:

The washerwoman would sort out the white from the

colored ones. The plain from the printed, the cotton

and satin from those made of fibers. Dirt was removed

using a wooden palu-palo or by trampling upon theclothes laid out on smooth rocks. Round sabon intsik or

Chinese soap and blue tina were essential washing

materials.

After washing, some clothes were starched. The starch used was made from rice lugaw

pressed with a wooden sandok or ladle form a cheesecloth duyan (hammock) tied tto the

clothes line at four points. Below this was a wooden batya or basin to catch the starch.

This was then gently patted on the barong tagalog and butterfly sleeves of the women's

baro. The starched clothes were later stretched into shape and dried on the flatgalvanized iron sheets. Stains are removed from the clothes by dropping calamansi juice

on the stained spots after which the clothes are bleached in the sunlight. Starched

clothes were sprinkled with water before pressing with a flat iron filled with glowing

charcoal.

ABOUT T HE FILIPINO HOUSES:

The houses vary in the same style depending on their location and social status and taste

of the family. Houses of the Filipinos are usually made of wood and nipa. Later galvanized

iron replaced nipa for roofing.



In some towns, barrios, and cities, houses made of nipa and bamboo are still to be found.

Some have sawali walls and cogon roofings. Most of the houses especially the older ones

are situated high above the ground for better ventilation and reduced humidity. In the

past, building a house was fast and inexpensive. Houses were built then through the help of

friends and neighbors.

Today there are only few bamboo houses. Most

houses are already built of strong materials like hollow

blocks, wood, galvanized iron and glass windows.

Modernity has not entirely changed the architecture

of the Filipino houses. The batalan is stall a part of the

houses in Luzon and is used as an open bathroom, a

place for water jars or tapayan and a place for washing.The modern batalan is made of concrete and is still adjacent to the kitchen. The

banguerahan, a storage shelf and drainer before the dish rack was introduced, is still a

part of a few modern houses. The modern banguerahan is no longer enclosed with bamboo

spikes but is screened.

The old house of before were not painted. The present ones are painted in varied colors

and built styles. The old houses were built high on the ground and the space below calle4d

silong was fenced with bamboo to keep pigs, dogs, and chickens out. Chairs, tables, beds

and other furniture are found in most hours. Many Filipinos, particularly t6he Tagalogs,still prefer to sleep on bamboo or wooden floors instead of on beds.



BUSINESS ETIQUETTE & PROTOCOL

Relationships & Communication:

Filipinos thrive on interpersonal relationships, so it is advisable to be introduced by a third

party. It is crucial to network and build up a cadre of business associates you can call upon

for assistance in the future. Business relationships are personal relationships, which mean

you may be asked to do favours for colleagues, and they will fully expect you to ask them

for favours in return.

Once a relationship has been developed it is with you personally, not necessarily with the

company you represent.

Therefore, if you leave the company, your replacement will need to build their own

relationship.

Presenting the proper image will facilitate building business relationships. Dress

conservatively and well at all times.

Business Meeting Etiquette:

Initial greetings are formal and follow a set protocol of greeting the eldest or most

important person first. A handshake, with a welcoming smile, is the standard greeting.

Close female friends may hug and kiss when they meet.

Use academic, professional, or honorific titles and the person's surname until you are

invited to use their first name, or even more frequently, their nickname.

Appointments are required and should be made 3 to 4 weeks in advance. It is a good idea

to reconfirm a few days prior to the meeting, as situations may change.

Avoid scheduling meetings the week before Easter. Punctuality is expected. For the most

part your Filipino colleagues will be punctual as well.Face-to-face meetings are preferred

to other, more impersonal methods such as the telephone, fax, letter or email. Send an

agenda and informational materials in advance of the meeting so your colleagues may

prepare for the discussion. The actual decision maker may not be at the meeting. Avoid

making exaggerated claims. Always accept any offer of food or drink. If you turn down

offers of hospitality, your colleagues lose face. It is important to remain for the period of

social conversation at the end of the meeting.



Business Negotiation:

You may never actually meet with the decision maker or it may take several visits to do so.

Decisions are made at the top of the company. Filipinos avoid confrontation if at all

possible. It is difficult for them to say 'no'. Likewise, their 'yes' may merely mean'perhaps'. At each stage of the negotiation, try to get agreements in writing to avoid

confusion or misinterpretation. If you raise your voice or lose your temper, you lose face.

Filipinos do business with people more than companies. If you change representatives

during negotiations, you may have to start over. . Negotiations may be relatively slow. Most

processes take a long time because group consensus is necessary.

Decisions are often reached on the basis of feelings rather than facts, which is why it is

imperative to develop a broad network of personal relationships. Do not remove your suit

jacket unless the most important Filipino does.

Dress Etiquette:

Business attire is conservative. Men should wear a dark coloured, conservative business

suit, at least for the initial meeting. Women should wear a conservative suit, a skirt and

blouse, or a dress. Women's clothing may be brightly coloured as long as it is of good

quality and well tailored. Appearances matter and visitors should dress well.

Business Cards:

You should offer your business card first. Make sure your business card includes your

title. Present and receive business cards with two hands so that it is readable to the

recipient.

Examine the card briefly before putting it in your business card case.

Some senior level executives only give business cards to those of similar rank.



T RADE PRACT ICES

T he current state of the Philippine market:

A lot of people underestimate the Philippine economy because of negative press coverage

in the past related to extremism and an unsafe business environment.However, the

Philippine economy continues to achieve growth despite political challenges. Its growth is

fuelled by large inflows of funds from millions of overseas Filipino workers; increased

investor interest for the local workforce, as it still has one of Asia's highest literacy

rates; and an investment-friendly government. As in any emerging economy, there will be

the usual challenges of dealing with the lack of infrastructure and pro-business policies

but the positives outweigh the negatives.

Favorability of the Philippines for foreign investors:

When lined up with India, China and Vietnam, the Philippines appear to be well positioned

for the long term. It is emerging as the next frontier in the business process outsourcing

(BPO) sector, because like India, it has a highly-educated workforce. This enables Filipinos

to perform more sophisticated tasks such as knowledge process outsourcing (KPO) for

medical diagnosis, legal work and design.Similar to Vietnam, it has one of the region's

highest proportion of young people, who are adept in Internet technology. Filipinos' good

command of English, however, gives them an obvious advantage over their Vietnamesecounterparts.Since there is still much room for growth, wages and business costs are low

and not rising as fast as those in China.The most promising industrial sector in Philippines

Philippines is a big country, therefore, promising sectors vary from region to region. For

Metro Manila, one of the hot sectors to look out for is retail. Many Filipinos are well-

travelled, so they have a higher level of appreciation for sophisticated retail

experiences.Outside of Metro Manila, BPO in the fields of information technology, legal

services and design will be suitable for Singaporean companies seeking lower costs and

scalability.

Tourism is also expected to be strong in the coming years, and there are many under-

developed tourist destinations in the country. In recent years Koreans and the Chinese

have overtaken the Japanese in making up the highest percentage of tourists. With warm

personalities and innate musical talent, Filipinos are natural hosts.



Cebu is becoming an attractive investment and tourist destination. With budget airlines

directly to Cebu from Singapore, more Singaporeans will be expected to visit. Cebu has

also begun to compete internationally for ship-building projects. With a large workforce,

deep water port and increased foreign participation, the Philippines can emerge as a

regional powerhouse in marine construction.The other new sector that should be takennote of is the country's nascent green economy. There is rising awareness of the

importance of sustainable resource use in the Philippines. The government and the local

business community, for instance, have begun exploring the possibility of turning

wastelands into power plants. Access to clean water is also a concern to a growing Filipino

population, so there are also opportunities for development in that industry.

T ypes of businesses most likely to flourish in the Philippines:

If you are in the service sector, many skilled personnel are ready to join your workforce.Filipinos are highly adaptable and intelligent, so it isn't difficult to imagine giving more

responsibilities to Filipino staff and eventually bringing them over to the local

headquarters. If you are in the creative business, you will also be able to find many talents

to fill your ranks, as the Filipino culture has an innate appreciation for beautiful visuals and

colours.As indicated earlier, the supply sector is open to innovations. Metro Manila is

undergoing a lot of infrastructural change, with new roads and highways being built to

enhance both intracity and intercity connectivity. The process is slow at times, but it will

be needed to sustain growth.

Initial steps companies should take if they are interested to expand into the

Philippines:

Singapore companies must first change their mindsets about the Philippine market and be

more adaptable. Unlike Singapore, things are rather dynamic in the Philippines. Singapore

companies might find that certain conditions to not be ideal, but they will see over time

that Filipinos adapt very well to the work required.

Before setting up operations in the Philippines, it will be essential to visit the place a fewtimes and meet with relevant partners. As for the type of company structure, you might

want to review your commitment first before coming in 100 percent. It will be good to take

a phased-in approach, because sometimes the location might not be suitable to attract the

type of employees you want or some unfavorable conditions might emerge.



We advocate that you have a long-term vision before setting up in the Philippines. You will

need some patience to develop scalability before moving forward. At the end of the day,

it·s all about building relationships, so staying within the same province will help in terms of

networking and business approvals.

Obstacles likely to face by companies when expanding into the Philippines:

Some companies might find the difference in communication style challenging. Filipinos are

communal in nature, so smaller Singapore companies must be prepared to answer all queries

and clearly communicate the goals of the company with all staff. Singaporean companies

must also frequently communicate and clarify objectives to minimize misunderstanding. It

is important for Singapore companies to treat its entire staff well; else word will go

around, making it tough to recruit good managers in the long run.

Working with local government agencies can also be a challenge. Singapore companies must

not expect the same level of efficiency that they have experienced here.

Aspects which differ Philippine business environment/culture from others:

As in most Asian business cultures, don't just come in and start your business pitch. Aim

to be a friend. Then get to know your new friends in the Philippines before you discuss any

possible business together.Importance of maintaining local contacts for foreign companies

looking to expand into the Philippines:

It's very important, because local contacts that have connections with the local

authorities will be better facilitators for set-up issues. Local contacts will also be able to

provide reliable feedback on the possible talent base of the area and the state of the

economy.

Documents

MTP - Decision Making