Managerial Decision Making: An Important Process

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Decision making is an important process undergoes by each of us every day in our life. The four managerial functions which are planning, leading, organizing and controlling require decision making. Making decision not only involving top managers, but it also involves everyone in the organization. Decision making is choosing among two or more alternatives. It may sounds easier than it is. We should remember that decision making is the heart of all the management functions. First Step: Define situation and recognize requirement of decision. The first step in the process of managerial decision making is to analyse situation and identify problems in the organization. Problem is a situation in which organizational accomplishment have failed to…show more content…
Alternatives are important in having the best solution or decision because it has gone through several processes which consider many angles before we get the best one. In this step, we are required to develop alternatives by generating possible options in dealing with our problems. This is because, throughout the process of gathering information in the previous step, we will identify few possible paths of actions. From the information and data, we can construct new alternatives with the help of imagination and creativity. We can ask ‘what if’ questions or questions such as “How would we like the situation to be?” and “Is this relevant or not to the decision?” In developing alternatives, we should concern about several aspects if the alternative is chosen as the decision such as the futurity of the alternative, the effects of the decision towards others in the organization and qualitative considerations which come into the…show more content…
Cause-and-Effect analysis is a way of generating and sorting out problems of an organization especially in decision making process. It is because this tool helps us to consider all the things that could cause it before making decisions for the solution. Besides, a tool called ORAPAPA can help in selection of alternatives. ORAPAPA tool is a checklist for making better decision by encouraging us to consider many different perspectives which we never explored before. ORAPAPA stands for Opportunities, Risks, Alternatives and improvements, Past experience, Analysis, People, Alignment and ethics. When we work through checklist, we will think about the decision relation to each element. In addition, Pareto Analysis also can be used in identifying the best alternative. Pareto analysis will help to prioritize possible changes by identifying factors that will be resolve by making these changes. It uses ‘Pareto Principles’ –known as 80/20 rules. 80/20 rules is the idea that helps us to choose alternative that have 20 percent of causes which can generate 80 percent of
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