decision is an act requiring judgment that is translated into action.Decision
making is much more comprehensive than problem solving.
are interrelated, but not interchangeable.
The Significance of Decision
making is the one truly distinctive characteristic of managers.
made by top managers commit the total organization toward particular courses of
made by lower levels of management implement the strategic decisions of top
managers in the operating areas of the organization.
invariably involve organizational change and the commitment of scarce
Characteristics of Managerial
choice from among a set of alternatives
ü Decision involves
requires a commitment of resources
components are decision-making functions.
functions are highly interrelated and interdependent.
process is highly dynamic with several subprocesses.
process can accommodate several concurrent Category II decisions.
Decision-Making Function No. 1
Setting Managerial Objectives:
constitute the foundation for rational decision making.
are the ends for the means of managerial decision making.
of the objective is the ultimate measure of decision success.
Decision-Making Function No. 2
Searching for Alternatives:
limitations of time and money
value of additional information
rising cost of additional information
search in the zone of cost effectiveness
Decision-Making Function No. 3
Comparing and Evaluating
result from the search.
usually three to five alternatives.
alternative is to do nothing.
are evaluated using criteria derived from the objective. Evaluation should
include an anticipation of the likely outcome for each alternative.
should also anticipate obstacles or difficulties at the time of implementation.
Decision-Making Function No. 4
The Act of Choice:
choice is the culmination of the process, not all of it.
choice confronts the decision maker with discernible constraints. The best
alternative may not be readily apparent to the decision maker. The best choice
is likely to ensue from the right approach.
choice should be the alternative most likely to result in the attainment of the
Decision-Making Function No. 5
success is a function of decision quality and decision implementation.
Areas contributing to decision success:
of operating constraints
of the decision maker
of decision implementers
of conflict of interest
Decision-Making Function No. 6
Follow-Up and Control
and control is essential to ensure that an implemented decision meets its
is measured by observing the implemented decision in relation to its standard
derived from the objective.
variance from standard performance should elicit timely and appropriate