There are six steps typically associated with effective decision processes. These six steps in the Managerial Decision-Making Process are recognition of Decision Requirement, Diagnosis and Analysis of Causes, Development of Alternatives, Selection of Desired Alternative, Implementation of Chosen Alternative and Evaluation and Feedback. (Daft 1995) First steps in the decision-making steps are recognition of decision requirement. The ability to recognize what is known is usually very important in the decision making steps.
Therefore, during making-decision managers need to recognition problems and opportunity. This is because decision making is the process of identifying problems and opportunities and then resolving them. Problem is a situation in which organizational accomplishments have failed to meet established objectives. It can be also some aspect of performance is unsatisfactory. Opportunity is a situation in which managers see potential organizational accomplishments that exceed current objectives. Daft 1995) Awareness of a problems or opportunity is the first step in the decision sequence. For example, in the human resource department, the managers are playing vital roles to determine whether the organization is satisfactorily progressing towards its goals by detect potential human resource problems. Besides that, talk to other managers gather opinions on how things are going and seek advice on which problems should be tackled or which opportunity should be embraced also is the first steps in the decision making.
In step 2, the managers need to diagnosis and analysis of causes to understanding which of the problems and opportunity of the situation should be refined. This is means that once managers have determined and defined their problems, they must begin to decide what they are going to do about it. Diagnosis is the step in the decision-making process in which managers analyze underlying causal factors associated with the decision situation. (Daft 1995) The managers gathers as much information as possible because having all the facts gives the decision maker a much better chance of making the appropriate decision.
Managers may make the mistake if they jump right into generating alternatives without first exploring the cause of the problem more deeply. This is because when an uninformed decision is made, the outcome is usually not very positive, so it is important to have all the facts before proceeding. Kepner and Tregoe, who have conducted extensive studies of manager decision making, recommend that managers ask a series of question to specify underlying causes, including the following: •What is the state of disequilibrium affecting us? •When did it occur? •Where did it occur? How did it occur? •To whom did it occur? •What is the urgency of the problem? •What is the interconnectedness of events? In the step 3, the decision maker attempts to come up with as many alternatives as possible. This is because once the problem or opportunity has been recognized and analyzed, decision makers begin to consider take action. A technique known as “brainstorming”, is often used in this step. Therefore, the managers will generate possible alternative solution that will respond to the needs of the situation and correct the underlying causes.
Furthermore, developing alternatives allows managers to resist an understandable inclination to solve their problem quickly and makes it more likely that they will reach effective decisions. (Stoner 1978) Possible alternatives will often suggest themselves after managers have analyzed a problem and gathered information about it. In addition, managers may use their imagination to come out with other posibble solutions to their problems. For example, if we would be faced with a high employee turnover rate, we could obviously (1) raise salaries, (2) increase benefits, and (3) reduce the work load.
Any one of these solutions (or all of them) might apply. But if we investigated further, we might find that other alternatives available to us include (4) do nothing – the expense of raising salaries might wipe out the gain of a stabililized work force. (5) redesign the work area to make it more pleasant, and (6) dismiss or retrain those supervisors who are disliked by employees. Therefore, decision alternatives can be thought of as the tools for reducing the difference between the organization’s current and desired performance. In the steps 4 , once the alternative have beeen developed, one must be selected.
This might seem to be an obvious step after all, this is because managers have already determined what their best alternative is. However, this best alternative will be based on the amount of information available to the managers and by their imperfect judgement. In addition, the manager’s goal is to make the choice with the least amount of risk and uncertainty. Because some risk is inherent for most non-programmed decisions, managers try to gauge prospects for success. Under conditions of uncertainly, they may have to relt on their intution and experience to estimate whether a given course of action is likely to succeed. Daft 1995) For example, let us assume our problem is the low performance of sales department. We might believe that performance of sales would be most conveniently increased if we dismissed the department supervisor. But our investigation discovers that the supervisors is extremely important for increase the department mental morale. Therefore , our best alternative might then be retraining the supervisor or offering financial incentives to the employees to increase performance of sales. This would be a long-term, more expensive alternative for our organization, but it might be the “best” one considering all the relevant factors involved.
The process of selecting the alternatives usually starts by narrowing the choices down to two or three and then choosing the best one. This step is usually the most difficult, because there are often many variables to consider. .(Stoner 1978) The decision maker must attempt to select the alternative that will be the most effective given the available amount of information. In the 5 steps, is the implementation of chosen alternative. The implementation stage involves the use of managerial administrative, and persuasive abilities to ensure that the chosen alternative is carried out.
Implementation often requires some additional planning time as well as the understanding and cooperation of the people involved. The ultimate success of the chosen alternative depends on whether it can be translated into action. Utimately, no decision is better than the action taken to make it a reality. This is because if the decision is a good one, but subordinates are not willing or able to carry it out, then it is unlikely the decision will be very effective. Implementation may require discussion with people affected by the decision.
Comunication, motivation, and leadership skills must be used to see that the decision is carried out. (Daft 1995) This is because communication is very important in the implementation step, because most people are resistant to change simply because they do not understand why it is necessary. Effective implementation of a decision involve much the same steps as implementation of plans. For example, managers can set up a budget or a schedule for the action they decide upon, so they can measure its progess in specific terms. There must also be clearly assigned responsibility for carrying out the action.
After that, managers set up a procedure for regular ,periodic reports on the progess of the action, and they must be prepared to to take appropriate measures for some problems arise. Finally, managers can set up an “ early warning system” to let them know as soon as possible of some problems with the action. .(Stoner 1978) In step 6, after the decision has been implemented, the decision maker must evaluate on the decision to see how effective each would be. Evauluating alternatives in light of the goals and resources of the organization is an important part of the decision-making process.
The alternative may seem logical, but if they cannot be implementd in the organization, they will be of little use. For example, if our sales are high but our profits are declining, we may want to reduce overhead costs. But if we find that costs have already been cut sharply, or that further cuts would reduce the quality of our product, this alternative would be less feasible. Besides that, if the decision that was implemented has corrected the difference between the actual and desired outcome, the decision is considered successful. However, if the implemented decision has not produced the desired result, once again a decision must be made.
The decision maker can decide to give the decision more time to work, choose another of the generated alternatives, or start the whole process over from the beginning. .(Stoner 1978) In addition, feedback is important because decision making is a continuous, never-ending process. Feedback provides decision makers with information that can precipitate a new decision cycle. The decision may fail, thus managers can generating a new analysis of the problem, evaluation of alternatives and selection of a new alternatives. Therefore, feedback is the part of monitoring that assesses whether a new decision needs to be made. Daft 1995) Group Approaches to Decision Making Decision making is something that individual managers often do, but decision makers in the business world also operate as part of the group. Decisions may be made through a committee, a task group, department participation, or informal coalition. This is mean that group decisions can be made by both consulting with others and allowing them to help make the final choice. To complete the example, the manager may hold a meeting to get everyone’s agreement on a lunch schedule or a system for deciding how to make the schedule.
Therefore, the Vroom Jago model provides ideas for including groups in decision making. Vroom and Jago developed a model of participation in decision making that provides guidance for practicing managers. The Vroom Jago model helps the manager gauge the appropriate amount of participation for subordinates. It has three major components: leader participation styles, a set of diagnostic questions with which to analyze a decision situation, and a series of decision rules. For participation styles, the model employ five levels of subordinate participation in decision making ranging from highly autocratic to highly democratic.
For diagnostic question, this will links to how do a manager decide which of the five decision styles to use? The appropriate degree of decision participation depends on the responses to eight diagnostic questions. The question will be as follow: 1. Quality Requirement (QR): How important is the quality of this decision? 2. Commitment Requirement (CR):How important is subordinate commitment to the decision? 3. Leader’s Information (LI): Do I have sufficient information to make a high quality decision? 4. Problem Structure (ST): Is the decision problem well structured? 5.
Commitment Probability (CP): If I were to make the decision by myself, is it reasonably certain that my subordinates would be commitment to the decision? 6. Goal Congruence (CO): Is conflict over preferred solutions likely to occur among subordinates? 7. Subordinate Information (SI): Do subordinates have enough information to make a high-quality decision? For selecting a decision style, several decision styles are equally acceptable in many situations. When this happens, Vroom and Jago recommend using the most autocratic style because this will save time without reducing decision quality or acceptance.