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Amit Kumar Sharma, Lovely Professional University Unit 5: Decision-making

Unit 5: Decision-making Notes

CONTENTS
Objectives
Introduction

5.1 Components of Decision-making
5.2 Decision-making Process
5.3 Simon’s Model of Decision-making

5.4 Group Decision-making
5.5 Creativity Problem-solving
5.6 Summary
5.7 Keywords
5.8 Self Assessment

5.9 Review Questions
5.10 Further Readings

Objectives

After studying this unit, you will be able to:

State meaning and importance of decision-making
Discuss the decision-making process
Describe models of decision-making

Introduction

Individuals in organisations make decisions. That is, they make choices from among two or
more alternatives. Decision-making is almost universally defined as choosing between
alternatives. Decision-making is a critical activity in the lives of managers. The decisions a
manager faces can range from very simple, routine matters for which the manager has an
established decision rule (programmed decisions) to new and complex decisions that require
creative solutions (non-programmed decisions).
The word "decision" is derived from the Latin words "de ciso" which means, "cutting away" or to
come to a conclusion. A decision is the selection of a course of action. According to Felex M
Lopez, "a decision represents a judgement; a final resolution of a conflict of needs, means or
goals; and a commitment to action made in the face of uncertainty, complexity or even
irrationality."
According to Philip Marvin, "decision-making may be viewed as the process by which individuals
select a course of action from among alternatives to produce a desired result. It is a process made
up of four continuous interrelated phases: explorative, speculative, evaluative and selective."

Thus, decision-making is the process by which the decision-maker tries to jump over the obstacles
placed between his current position and the desired future position.

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