The entire planning process is nothing but a decision-making activity. A decision-making is an activity for choosing. A decision-making process - involves (1) purpose for decision-making, )2) generating of choices or alternatives that are likely to meet that purpose, and (3) establishing a criteria for making the choice. In an organization decision-making occasion arises- generally either when it encounters (a) problem-solving situation, or/ and (2) exploit a new opportunity.
Depending on the nature of decision making situations- it may involve one or more decision-makers ( a group, team, management etc)
There are two types of decisions in an organization
- Programmed Decisions: Programmed decisions are taken with the application of a policy- For instance - admitting a student to a course. This kind of decision is also called Pragmatic decision
- Non-Programmed Decision: are those decisions that involve novel situations or those decision that have no precedence
The outcome of a decision may be certain, uncertain or risky
In case a decision-maker is using a subset of all possible choices open to him- he is said to be making bounded rationality decision
Some of the challenges faced by decision-maker include
- Insufficient information
- non-cooperative environment
- incompetence
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