Decision making in management

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Decision making is said to be a psychological construct. This means that although we can never "see" a decision, we can infer from observable behavior that a decision has been made. Therefore we conclude that a psychological event that we call "decision making" has occurred. It is a construction that imputes commitment to action. That is, based on observable actions, we assume that people have made a commitment to effect the action.

Making effective decisions in this environment is challenging to say the least, and the consequences of a miscalculation or a lost opportunity are substantial.

Decision-making is a human activity involving free will & choice. It must be differentiated from a transaction where only rationality & logic are involved & the action required is unambiguous & hence, the process can be automated. In decision-making there is conflict, ambiguity & uncertainty & hence, both rationality & emotions come into play, both sides of the brain are required --- the Left Brain for logic, rationality & judgment & the Right Brain for creativity, ideas & vision.
(Francis Lobo)

Thus it is a challenging and difficult job because we cannot predict the actions. With the passage of time, business operations around the world have become complex because of the dynamic nature of the industries in which the firms operate. The main reason for that is the increase in the level of uncertainty of the factors that play an important role in the business processes. For almost any decision to be taken, the management committee or the individual in any firm is now faced with a) an increased number of alternatives, b) massive change in the number and nature of goals, criteria or evaluations and c) increased complexity of the decision-making environment.

Business decisions involve choosing between alternative courses of action and developing formal plans for future action.

Methods of decision making under uncertainty
1. On intuition based
Intuition technique is like any other decision making technique. Before making any decision , we need to ask ourselves , what am I trying to do , do I have plan, what information do I need , who is involved in my plan , do I need to ask them how they feel about my plan. I believe everyone is capable of receiving intuition messages. It is a skill which we learned from our previous experiences the more we practice the better we ...