Decision Making
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Definition of Decisions Making
• Process of selecting a course of action from
among alternatives core of planning.
• The elements of Decision Making Process are:
Decision
Maker
Problem
2
Environment
Objectives
Alternatives
Outcome of
Alternatives
Final Choice
Decision Making Process
Define the problem
• Main
• Sub-problems
Identify evaluation criteria
Classify objectives
• Cost
• Performance
• risk
Model building
• Computer simulation
Evaluate results
Feedback
• Decision is probably
implemented
3
Taking final decision
Techniques of Decision Making
Scientific
Management
• Cost control
• Managerial cost
Mathematical
Model
• Operation research
4
Human Relation
Empirical
• Mayo
• Problem of motivation
and leadership
• Experience of
successful managers
Decision Theory
Decision Support
• Quantitative and
qualitative aspects
• Focus on
understanding and
improving
Classification of Decisions
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• Organizational and
personal
• Routine
• Programmed and
non programmed
• Policy and operative
• Individual and group
• Major and minor
• Long term
Evaluating Alternatives
• Principle of limiting factors
– In choosing from among alternatives, primary
attention must be given to limiting factors
• Bases for selecting from alternatives
– Manager, experience, experimentation and
research
• Evaluating the decision
– According to size, flexibility of plan, certainty of
goal and human impact
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Difficulties in Decision Making
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•
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Incomplete info.
Unsupporting environment
Ineffective communication
Incorrect timing
None- acceptance by
subordinates
Q: Translate the following paragraph if you know the meaning of the
following words:
According: ‫بالنسبة‬
order to: ‫لكي‬
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•
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Environment
Primacy
Devised and executed
Unsporting environment
Concept
Decision maker
Objectives of business
Ensure productivity
Strategic
Competitive
Performance
Policies
“The Decision maker should
devise and execute his
strategic plans and policies
according to the objectives of
businesses and the
supporting environment in
order to insure productivity”
‫لمتخذ القرار ان يوجه وينفذ خططه و‬
‫سياساته االستراتيجية و فقا الهداف‬
‫المنظمة و البيئة المساندة من اجل‬
‫تحقيق االنتاجية‬
Management Concepts
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Entrepreneur
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• A person who has control over a
company, enterprise, or
venture and assumes significant
accountability for the inherent
risks and the outcome
• Anyone wants to work for
himself or herself is considered
entrepreneur
• Examples
– Michael Bloomberg - Financial
Info.
– Bill Gates – Microsoft
– Donald Trump - Real Estate
Business Plan
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• A business plan is a document
that summarizes the
operational and financial
objectives of a business and
contains the detailed plans and
budgets showing how the
objectives are to be realized.
• Business plan outline:
–
–
–
–
–
–
–
–
–
–
–
–
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The Executive Summary
Company Description
Industry Analysis
Market Analysis
Competitive Analysis
Marketing Plan
Management Plan
Development and Milestones
Operating Plan
Financial Plan
Risk and Contingencies
Summary and Conclusion
Appendixes And Exhibits
Benchmarking
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• Is the process of
comparing the cost,
time or quality of what
one organization does
against what another
organization does in
order to make changes
and improvements and
apply best practices
• Types of Benchmarking:
– Internal
– Competitors
– Functional
• Example of a typical shorter
version:
– Identify your problem areas
– Identify other industries
that have similar processes
– Identify organizations that
are leaders in these areas
– Survey companies for
measures and practices
– Visit the "best practice"
companies to identify
leading edge practices
– Implement new and
improved business practices
Change Management
Is a structured approach to transitioning individuals, teams, and
organizations from a current state to a desired future state
Goals of Change Management are:
•
•
To increase the ability of the organization team •
To learn from change •
To increase profitability •
The ADKAR model for individual change management
Awareness
• Why the
change is
needed
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Desire
• To support
and
participate in
the change
Knowledge
• How to
change
Ability
Reinforcement
• To implement
new skills
and
behaviors
• To sustain the
change
•
Process of Change
• Make the
need so
obvious
Unfreezing
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Changing
• New values
• New
patterns
Refreezing
Customer Relationship management (CRM)
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CRM solutions provide •
customer-oriented
services such as Internet,
mobile devices,
multichannel interaction
CRM is a tool that can help •
organizations to
profitability meet the
needs of customers
Total Quality Management (TQM)
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• TQM is a set of
management practices
throughout the
organization, geared to
ensure the organization
consistently meets or
exceeds customer
requirements.
• TQM places strong focus
on process measurement
and controls as means of
continuous improvement.
Eight elements of TQM are: •
Enterprise Resource Planning (ERP)
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• ERP is an enterprise-wide
information system designed
to coordinate all the
resources, information, and
activities needed to complete
coherently business
processes such as order
fulfillment or billing
Globalization
• Is the process of transformation of local or regional phenomena
into global ones
• It can be a combination of economic, technological, sociocultural
and political forces
• Reasons for Globalization:
– Internal efficiency
• Become global to gain more volume
– Compete in homogenous markets
• Lower prices can be offered as a result of standardization
• Strategies used:
– Marketing
• Not only product but also price and distribution
– Product
• Identical
– Branding
• Same brand or logo worldwide
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Management by Objectives
• Is a process of agreeing upon objectives
within an organization so that management
and employees agree to the objectives and
understand what they are in the organization
• Objectives for MBO must be SMART
S
• Specific
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M
• Measureable
A
• Achievable
R
• Relevant
T
• Time Specific
Outsourcing
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• Is contracting with
another company
or person to do a
particular function
• The function being
outsourced is
considered noncore to the business
Quality Circle
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• A small group of employees who
perform similar duties and meet
at periodic intervals, often with
management, to discuss workrelated issues and to offer
suggestions and ideas for
improvements, as in production
methods or quality control.
Supply Chain Management
• SCM is the management of a network of interconnected
businesses involved in the ultimate provision of product and
services packages required by end customers (Harland, 1996)
Suppliers
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Purchas
e
Productio
n
Distributio
n
Customers
The 7 Habits of Highly Effective People
• From dependence to independence:
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Mind Mapping
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• Is a diagram used to
represent words, ideas, tasks
or other items linked to and
arranged radically around a
central key word or idea
• Mind maps are used to
generate, visualize, structure
and classify ideas and as an
aid in study, organization,
problem solving, decision
making and writing.
Five Competitive Forces
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• Is a framework for the
industry analysis and
business strategy
development developed
by Michael E. Porter of
HBS in 1979
SWOT Analysis
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• Is a strategic planning
method used to evaluate
the Strengths,
Weaknesses,
Opportunities, and Threats
involved in a project or in a
business venture.
Value Chain
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• Interlinked valueadding activities that
convert inputs into
outputs which, in turn,
add to the bottom line
and help create
competitive advantage
Balanced Scorecard
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• The balanced scorecard
approach is a measurement
system, performance
management tool that
enables organizations
– to clarify their vision and
strategy, and
– translate both into action.
– It provides feedback around
both the internal business
processes and external
outcomes
• Goal: continuously improve
strategic performance and
results
Time Management
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• Is commonly defined as
the various means by
which people effectively
use their time and other
closely related resources
in order to make the
most out of it
Time
Management
Matrix
Urgent
Not Urgent
Important
•Crises
•Pressing
problems
•Deadline
Need to deal with
these as soon as
possible
•Prevention
•Relationship
building
•Planning
Need to plan
Not
Important
•Interruptions
•Some calls &
email
•Some meetings
Check your
schedule to see if
you can eliminate
some
•Trivia
•Gossip
•Time wasting
Try to minimize
distractions
References
BUS 230 – Business Administration
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References
M. Govindarajan and S. Natarajan, “Principle of •
Management”, 2005 Prentice-Hall
www.wikipedia.com •
www.about.com •
www.quickmba.com •
www.netmba.com •
www.isixsigma.com •
www.12manage.com •
www.answers.com •
www.businessdictionary.com •
www.learn.com •
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