Managerial Decision Making

Managerial Decision Making

“Decision making is a process of developing a commitment to some course of action.”

Characteristics of Decision Making

1. Element of Risk:
Decision making is always charged with Risk. The probability of success is always less than 100. The decisions are either major or minor the risk is there.

2. Uncertainty:
The decision making process is uncertain. You never know what will be the outcome. The final result is totally unpredictable.

3. Lack of Structure:
Decision making process is implemented on the newly faced problems which haven’t already been solved. These are mostly non-routine problems and the solution process is un-structured that means there aren’t specified rules or procedures to follow.

4. Conflict:
Whenever a decision is going to be made there will be an opposing party so conflicts may arise. That could be a pressure group or employees or anything. The conflict may arise within our self too.

Decision Making Process

1. Identify the problem:
The first step in decision making is to identify the problem, what actually the problem is? Whether there is some discrepancy.

2. Generate Alternatives:
The second step is to generate alternatives. Look for the possible solutions of the problem, talk to relevant people, call meetings, collect the required information and get the ideas from other people whether they are feasible or not. The ideas should be creative and originative.

3. Evaluation of Alternatives:
Now list all the possible alternatives and evaluate them. Which are feasible and practically implement able? Also look for the resources needs to implement those ideas. Then finally list the best possible ones.

4. Make a Choice:
After evaluating, get the best possible solutions with you and then give them another look to choose the best of the best. The solution with few negatives and less cost with high returns will be selected.

5. Implementation:
Now the selected solution will be implemented practically and resources will be allocated to do the job.

6. Evaluate or Monitor the Decision:
After implementation, look if the things are going the way they were planned. Whether the problem is resolved or there are some lapses. If the selected solution is unable to solve the problem then choose another alternative solution.

Pros and Cons of Decision Making Process

Decision making made in groups has following advantages:

1. Quality of Decision:
When so many people will be involved the quality of decision will improve.

2. Diversification:
There will be variety in the decision and complete understanding of the scenario.

3. Commitment:
When decisions are made in groups, the consent of other members is inclusive so they will be committed to the decision.


1. Time Consuming:
Group decision making is time consuming as it’s difficult to gather people on one place frequently. The process will take some time to complete.

2. Dominating Individuals:
The dominating individuals may influence the decision, so the dominating personalities are discouraged in group decision making.

3. No Coalitions:
There shouldn’t be groups within a group. The coalition should be discouraged in group decision making as a particular sub-group may influence the decision.

4. Criticism:
Criticism should be constructive and positive. The negative criticism should be deterred and the personal differences should be kept aside.

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