UNIT 8 DECISION MAKING

Structure

Introduction
Objectives
Significance of Decision making
Decision making Process
Types of Decisions
Models of Decision Making
Creativity and Decision making
Some Common Errors in Decision making
Let Us Sum Up
Unit-end Exercises
Suggested Readings

8.1 INTRODUCTION

Decision making is the process of choosing actions that are directed towards
the resolution. It can be defined as "the selection from among alternatives of a
course of action: it is at the core of planning". The decision making process
can be carried out either by individuals acting alone or by groups. There are
several models and theories which are developed to explain decision making
and how effectively you can make a decision.

Decision making is a process of selection from a set of alternative courses of

action which is thought to fulfill the objectives of the decision problem more
satisfactorily than others. Decision making is an essential part of every
function of management. In the words of Peter F. Drucker, "Whatever a
manager does, he does through decision making." When we talk of teachers it
can be seen that a teacher is continuously involved in decision making whether
it is regarding school activities or related student centered activities etc.
Knowingly or unknowingly a teacher is always at decision making. Decision
making involves thinking and deciding before doing and so is inherent in every
activity. That is the reason decision making is often called the "essence" of
managing.

No one can survive without effective decision making. Some of the decisions
may be of a routine type and repetitive in nature and some may be strategic in
nature which may require a lot of systematic and scientific analysis. In the
educational sector, a teacher is always a decision makedTeachers are expected
to make decisions that affect the growth and development of the students in
their care.
 Decision Making
8.2 OBJECTIVES

After going through this unit, you should be able to:

discuss the importance and process of decision making,

discuss the models of decision making,
explain the relativity of creativity and decision making, _ _--
discuss common errors in decision making.

8.3 SIGNIFICANCE OF DECISION MAKING

Decision making is important for organizational effectiveness because of its

central role in the overall process of directing and controlling the behaviour of
organizational members. Decisions are made that cover the setting of goals,
strategic planning, organizational design, personnel actions, and individual and
group actions. Besides its organizational effect, however, decision making also
has an individual effect. The quality of a decision has a bearing on his or her
professional success and sense of satisfaction. So studying decision making is
important from both an organizational and an individual perspective.

Another major reason for studying decisions is to enable us to make better

quality decisions than we do presently. This point must be emphasized strongly
because the quality of our decisions is often much poorer than we realize.
Selective perception tends to bias the information we use in making decisions
and our attitudes and values influence how we interpret that information.
Drives for consistency lead to oversimplified interpretations. Our willingness
to attribute positive outcomes to ourselves. (e.g., taking credit for good
decisions) and to attribute negative outcomes to forces outside our control
makes us remember the results of decisions in a personally favourable light.
All these forces degrade our decisions. and at the same time, limit our
understanding of the decision making problem,

Besides being unaware of our human limitations in the decision making

process, we are often unaware of the methods that can be used to increase our
decision effectiveness. Very little training that emphasizes the actual decision
making process is available either inside or outside organizations. In most
cases experience is our guide and while experience can be a good teacher, it
can be misleading as well. In many cases we may learn the wrong way to do
something or we may obtain information that is actually irrelevant for the
quality of the decision.

In order to increase our effectiveness in decision making, we must first

understand the decision making process. Decision making and planning are
deeply interlinked. The determination of objectives, policies, programmes,
strategies, etc. involves decision making. The most outstanding quality of a
teacher to be successful is hisher ability to make sound decisions, A teacher
may be in a situation where he/she has to make up hisher mind quickly on
certain matters, It is not correct to say that he/she has to make ~ p u rof the
moment decisions all the tima, While taking many decisions, he/she gets
enough time Pot ~areffilfact fiadin~,merlysis sf alternative8 and eheiee sf the
Interpersonal Process and
best alternative. Decision making is a human process. When a teacher decides,
Conflict Resolution
he/she chooses a course which he/she thinks is the best.

8.4 DECISION MAKING PROCESS

The basic characteristics of decision making are as follows:

It is the process of choosing a course of action from among the alternative

courses of action.
It is a human process involving to a great extent the application of
intellectual abilities.
It is the end process preceded by deliberation and reasoning.
It is always related to the environment. A decision may be taken in a
particular set of circumstances and another in a different set of
circumstances.
It involves a time dimension and a time lag.
It always has a curpose. Keeping this in view, there may just be a decision
to not to decide.
It involves all actions like defining the problem and probing and analyzing
the various alternatives which take place before a final choice is made.

The decision making process includes the following components:

The decision maker.

The decision problem.
The environment in which the decision is to be made.
The objectives of the decision maker.
The alternative courses of,action.
The outcome expected from various alternatives.
The final choice of the alternative.

The stages of decision making are indicated in Figure 8.1

I
Wlmy
~oab mnd
objectives

Flg.8.l: Stages of Beclrlon Maklng

The fint leg of deeision making i8 goals md objeetiva. The seeand istags is
problem reeagnitian, Here the deeision:m&er has to be alert to know what i s
 Decision Making
happening and also to recognize the discrepancies which exist. During the third
stage, the decision-maker must evaluate the discrepancy whether it is an
important one or not. Next, it has to be found out how the problem occurred
i.e., 'information-search phase'. This stage is crucial but least handled well. In
the next stage 'course of action' must be explored i.e., number of alternatives
to be explored. This is the 'alternative-generation' phase. Next comes the
evaluation of alternatives that is the 'choice phase'. Here the pros and cons of
each alternative have to be thought about before taking a decision which is
known as choice of action. The last phase of the process involves the
implementation and evaluation of the decision.

8.5 TYPES OF DECISIONS

Decisions may be classified into five major types. These are:
Organisational and personal decisions
Routine and strategic decisions
Policy and operating decisions
Programmed and non-programmed decisions
Individual and group decisions
Let us discuss each type in brief.

(i) Organizational and personal decisions: Personal decisions are those

decisions that cannot be delegated to others. These decisions are meant
only to achieve personal goals. Organisational decisions are those decisions
that are taken to achieve organizational goals. For example you want to
solve food habits related problems of your students. Advising them to take
nutritious food becomes a personal decision. As a teacher you adopt
i
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different kinds of teaching methods so that your students are able to
understand science and mathematics better. These are for organizational
goals because good performance enhances the credibility of the school.

Activity 1

Illustrate with reference to your school on what occasions you had to

follow organizational or individual decisions.
I
(ii) Routine and strategic decisions: Routine decisions are those which are
repetitive in nature. For example, certain established rules, procedures and
policies are to be followed. You might have experienced that when a
teacher goes on leave another teacher who is free at that time has to engage
the class. This is a routine decision. 'Strategic' decisions are those
decisions which have to be deliberated upon in depth. For example,
highlighting the characteristics of the school, before giving an
advertisement for admissions, can bring more revenue to the school.

Activity 2

Cite an example with reference ta your school r e g d i n g a strategic

decision. - -
--- -.-
. - - - ---- - - -- - - - . -- --- --- -
Interpersonal Process and (iii) Policy and operating decisions: Policy decisions are those decisions
Conflict Resolution
which are taken at the higher level. For example, fixing pay scales for
teachers. Operating decisions are those decisions which mean procedure of
execution of the policy made. For example, how to disburse the arrears
accumulated to a teacher (e.g. calculations).

Activity 3

What do you mean by operating' decision?

(iv) Programmed and non-programmed decisions: Non-programmed

decisions are those decisions which are unstructured. For example, if a
child is often absent, the class teacher can analyse the reasons for hislher
absenteeism from the information provided by the child and then advise as
to how to recoup with the situation. Whereas programmed decisions are of
routine type and repetitive in nature. For example, when should children
take their breakfast, hlnch etc.

~ifferentiatebetween programmed and non-programmed decisions citing

appropriate examples.

(v) Individual and group decisions: A decision taken by an individual in the

organisation is known as 'individual' decision, where autocratic style of
functioning prevails. For example, if only the principal takes a decision
without the participation of teachers, it is an individual decision. 'Group'
decisions are collective decisions which are taken by a committee with a
proper representation. For example, decisions taken collectively by parents,
teachers and principal for the welfare of students.

Activity 5

Describe a situation where individual and group decisions have to be

taken?

Some other types of decisions: Decisions can also be classified on the basis of
dimensionality i.e., complexity of the problem and certainty of outcome of
following the decision. These are described below:

Mechanistic decisions: Mechanistic decision is routine and repetitive in nature

where the outcomes are known. For example, if a child misbehaves in the
class, the teacher raises voice to control it.

Analytical decisions: In this type of decision one has to analyse the situation
and take a decision. For example, if students are 30t performing well in
science, the reasons have to be explored. It c x be because of the teacher or the
method of teaching science, lab-facilities provided, etc.

Adaptive decldenr: In thie kind of deei~ienoutcomse are not h e w n and

offen unpredictable, It varie~from Bibation to Bibation, For example, a
deei~iontaken by B teaekgr without prior experience of the outcome, 1
 Decision Making
Activity 6

I Cite examples regarding the above types of decisions with reference to your I
1 school or a school vou are familiar with. I

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1 I?)( ~ ' 0 1 1 1 p a ~t ~ ~ onr:s\\-ers
u ~ . ~ ' i t l tIl~i\;e
i give11i l l thc text.
j

..........................................................................

2. Mrl.itc any four ~ o m p o ~ i ~ ofthe

l i t s decision making process.

3. Namc three types of dccisioi~s classified on the basis of

tiimcnsionaJitj..

8.6 MODELS OF DECISION MAKING

The following are important decision making models which enable us to know
more about decision making:
Contingency model
Economic man model
Administrative man model
Social man model
Let us discuss each model in brief.

(i) Contingency model: Beach and Mitchell (1978) felt that the decision
maker uses one of three general types of decision strategies: aided analytic,
unaided analytic, and no analytic. The aided analytic strategy employs
some sort of formal model or formula, or an aid such as a checklist. An
unaided analytic strategy is one in which the decision maker is very
systematic in his or her approach to the problem and perhaps follows some
sort of model, but does it all in his or her head. Thinking of all the pros and
cons for each alternative or trying to imagine the consequences of each
action would fall in this category. Finally there is the category of no
analytic strategy. Here the decision maker chooses by habit or uses some
simple rule of thumb ("nothing ventured, nothing gained" or "better safe
than sorry") to make the choice.
Which strategy is to be selected depends on the personal characteristic of
the decision maker and the demands of the task. The underlying
assumption of this model is that a person will choose a strategy that
Interpersonal Process and requires the least amount of time and effort to reach a satisfactory decision.
Conflict Resolution
The more analytic a strategy, the more time and effort are required to use
it.
Since aided analytic techniques take the most effort and analysis, the use of
such techniques requires that 1) the ihdividual should have the personal
characteristics necessary to employ them (e.g., knowledge, ability, and
motivation) and 2) such techniques are demanded by the characteristics of
the decision problem.
The characteristics of the problem are divided into two groups: the decision
problem itself and the decision environment. The model suggests that as
the decision problem becomes less familiar and more ambiguous, complex,
and unstable, the decision maker will use more time and analysis (more
analytic strategies) ta reduce the uncertainty caused by these factors.
However, this process continues only up to a point. When the uncertainty
due to these factors becomes too great, the decision maker is likely to
return to a simpler rule. The reason is that when there is an extremely high
degree of uncertainty in the decision problem, the potential gains of a more
accurate analytic decision are small and are often far outweighed by the
cost (e.g., time and effort) required to arrive at that decision.
The decision environment is composed of four factors. The model suggests
that more analytic strategies will be .selected when decisions are not
reversible and very important, and when the decision maker is personally
accountable. Also, analytic.procedures are more likely to be used where
there are no time or money constraints.
(ii) Economic man model: In this model, it is believed that man is completely
rational in taking decisions. It is accepted that man takes decisions based
on the best alternatives available.
An econologic model of decision making is given in Figure 8.2.

Flg.8.2: An Econologlc Model of Declsion maldng

Source: Behling and Schriesheim, 1976
 Decision Making
(iii) Administrative man model: This model assumes that though people
would like to have best solution, they settle for less because the decisions
may require more information which they may not possess. Thus, there is
a kind of bounded (or limited) rationality in decisions. The following three
steps are involved in the process of this model.

Sequential attention to alternative solutions: In this step, all the alternatives

are identified and evaluated one at a time. If one of the alternatives fails then
the next alternative is considered

Use of heuristics: A heuristic is a rule which guides the search for alternatives
into areas that have a high probability for yielding satisfactory solutions. In
this step if the previous solution was working then a similar set of alternatives
are used in that situation.

Satisfying: Here the alternatives which are workable are found to be

satisfying.

I A bounded rationality model of decision making is explained in Figure 8.3.

(6)
I

I
1 Unacceptable

(1) (2) (3) (5b)

Set goal or Establish Employ ,
Appraise
define level of heuristic alternative
problem aspiration programmes
to identify
A feasible (53)
Feasible (74
alternative
alternative Acceptable
identified v
(7b)
Act

(4b)(8b) (4a)
Adjust No feasible
aspiration alternative (8a)
level identified Appraise
ease of
aspiration
level
attainment

Fig.8.3: A Bounded Rationality Model of Decision Making

Source: Behling and Schriesheim, 1976

(i) Social man model: This model was developed by the classical
psychologists. This model feels that man being a social animal is subjected
to social pressures and influences. Here the decisions are taken under the
following conditions:

Certainty: Because of certainty, accurate decisions can be taken.

Uncertainty and risk: Several decisions are taken under conditions of
risk.
Interpersonal Process and
Identification of Alternatives
Conflict Resolution
In order to generate alternatives three main processes are generally used.
These are brainstorming, synectics and nominal grouping.

(i) Brain storming: This is developed by Alex F. Osborn. It is the best

technique in stimulating creative thinking. The objective of this method
is to produce as many ideas as possible. In this method 'criticism' is
prohibited. 'Freewheeling' is welcome. Generating a number of
alternatives is the motto. Combination and improvement are sought. This
method does have limitations. They are time consuming and costly. Care
should be taken to select group members who are familiar with the problem
to be considered (e.g. Parent - Teacher Association meetings).

(ii) Synectics: Here members are selected from different backgrounds and
training. The leader poses the problem in such a way that the members
deviate from traditional ways of thinking. Various methods employed
include role playing, use of analogies, paradoxes, metaphors and other
thought provoking exercises.

This is a widely used method and though it has limitations like brain
storming, it is very useful for complex and technical problems.
>

Activity 7

lllustrate the above mentioned decision making technique and situation

where it can be used. .
(iii)Nominal grouping It means group in name only. This model is useful
when it requires a high degree of innovation and idea generation. Here the
search process is proactive rather than reactive. It is also time consuming
and costly.

8.7 CREATIVITY AND DECISION MAKING

Creativity involves a novel combination of ideas which must have theoretical

or social value or make an emotional impact on other people. Creative
decisions and the quality of such decisions is influenced by many factors. It
would depend upon the quality of the information input and any prejudices
intmduced because of our perceptual processes and cognitive constraints. In
addition to the outside factors, the characteristics of the decision maker greatly
affect the quality of the decision. The primary characteristics are the attitude
of the decision maker towards risk that helshe may be facing and the types of
social and cultural influences on hindher.

Some of the factors and. personal characteristics that have an impact on the
decision maker are:

(i) Information inputs: It is very important to have adequate and accurate

information about the situation for decision making, otherwise the quality
of the decision will suffer. It must be recognized, however, that an
individual has certain mental consmints which limit the amount of
 Decision Making
information that helshe can adequately handle. Less information is as
dangerous as too much information, even though some risk takers and
highly authoritative individuals do make decisions on the basis of
comparatively less information than more conservative decision makers.

(ii) Prejudice: Prejudice and bias are introduced by our perceptual processes
and may cause us to make ineffective decisions. First of all, the perception
is highly selective, which means that we only accept what we want to
accept and hence only such type of information filters down to our senses
and secondly, perception is highly subjective meaning that the information
gets distorted to coincide with our pre-established beliefs, attitudes and
values. For example, a pre-conceived idea that a given person or an
organization is honest or deceptive, good or poor source of information,
late or prompt on delivery can have a considerable effect on the objective
ability of the decision maker and the quality of the decision.

(iii)Cognitive constraints: A human brain, which is the source of thinking,

creativity and thus decision making, is limited in capacity in a number of
ways. For example, except in unique circumstances, our memory is short
term with a capacity of only a few ideas, words and symbols. Secondly, we
cannot perform more than a very limited number of calculations in our
heads which are not enough to compare all the possible alternatives and
make a choice. Finally, psychologically, we are always uncomfortable with
making decisions. We are never really sure if our choice of the alternative
was correct and optimal, until the impact of the implication of the decision
has been felt. This makes us feel very insecure. These constraints limit us
to use 'Heuristics', which means limiting the search for facts and data and
using the limited information for decision making. This leads to
'satisfactory' decisions rather than optimal decisions.

(iv) Attitudes about risk and uncertainty: These attitudes are developed in a
person, partly due to certain personal characteristics and partly due to
organizational characteristics. If the organizational policy is such that it
penalizes losses inore than it rewards gains, then the decision maker would
tend to avoid such alternatives that have some chances of failure even
though the probability of substantial potential gains is very high. The risk
taking attitude is influenced by the following variables:

Intelligence of the decision maker. Higher intelligence results in highly

conservative attitudes and highly conservative decision makers are low
risk takers. The less intelligent decision makers are generally more
willing to take calculated risks if the potential rewards are large and
there is some chance of success.

Expectations of the decision maker. People with high expectations are

generally highly optimistic in nature and are willing to make decisions
even with less information. The decision makers with low expectations
of success will require more and more information to decide upon a
course of action.

Time constraints. As the complexity of the personal habits of the

decision maker and the complexity of the decision variables increases,
so does the time required to make a rational decision. Even though,
there are certain individuals who work best under time pressures and
Interpersonal Process and may out-perform others under severe time constraints, most people, by
Conflict Resolution
and large, require time to gather all the available information for
evaluation purpoges. However, most people under time pressures rely
on 'Heuristic' approach, considering few characteristics of alternatives
and focusing on reasons to reject some alternatives. This approach
may also be in use when the cost of gathering information and
evaluating all such information is high.
7

(v) Personal habits: Personal habits of the decision maker, even though
formed through social environmental impact and personal perceptual
processes, must be studied in order to predict his decision making style.
Some people stick to their decisions even when these decisions are not
optimal and try to shift the blame for failure on outside factors rather than
their own mistakes. For example, Hitler found himself bound by his own
decisions. Once he decided to attack Russia, there was no coming back
even when it was realised that the decision was not the right one. Some
people cannot admit that they are wrong and they continue with their
decisions as before even ignoring such evidence which indicates that a
change is necessary. These personal habits have a great impact on
organizational operations and effectiveness.

(vi)Social and cultural influences: The social and group norms exert
considerable influence on the style of the decision maker. Ebert and
Mitchell define a social norm to be "an evaluating scale designating an
acceptable latitude gnd an objectionable latitude for behaviour, activity,
events, beliefs or any object of concern to members of a social unit. In
other words, social norm is the standard and accepted way of making
judgements". Similarly, cultural upbringing and various cultural
dimensions have a profound impact on the decision making style of an
individual. For example, in the Japanese organizational system, a decision
maker arrives at decisions in consensus with others. This style is culturally
oriented and makes implementation of the decision much easier, since
every body participates in the decision making process. In America, on the
contrary, the decision making style is highly individualistic with the @lp
of decision models and decision techniques.

8.8 SOME COMMON ERRORS IN ,DECISION MAKING

Since the importance of the right decision cannot be overestimated, because

the quality of the decision can make the difference between success and
failure, it is imperative that all factors affecting the decision be properly looked
at and fully investigated. In addition to technical and operational factors which
can be quantified and analyzed, other factors such as personal values,
personality traits, psychological assessment, perceptions about the
environmenf, intuitional and judgemental capabilities and emotional
interference must also be understood and credited.

Some researchers have pinpointed certain areas where managerial thinking

needs to be re-assessed and where some common mistakes are usually made.
These mistakes that affect the decision making process as well as the
efficiency of the decision should be avoided as far as possible. Some other
errors are:
 Decision Making
(i) Indecisiveness: Decision making is a very heavy responsibility. The fear
of its outcome can make some people timid about making a decision. This
timidity may result in taking a long time for making a decision and this
may result in the loss of a good opportunity. This trait is a personality trait
and must be looked into seriously.

(ii) Postponing the decision until the last moment: This is quite a common
practice and results in decision making under pressure of time which
generally eliminates the possibility of a thorough analysis of the problem
. since such analysis is time consuming. It also makes it practically
imbossible to establish and compare all possible alternatives. For example,
I many students who postpone studying until their final exams usually do not
I fare well in the exams.

I
(iii)Failure to isolate the root cause of the problem: It is a very common
practice to cure the symptoms, rather than the causes. For example, a
headache may be a symptom of some deep rooted emotional problem so
that just a medicine for the headache would not cure the problem. It is
necessary to separate the symptoms from the causes. Success of a decision
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1
is dependent upon the correct definition of the problem.

1
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(iv) Failure to assess the reliability of informational sources: Very often, we
take it for granted that the other person's opinion is very reliable and
1 trustworthy and we do not check for the accuracy of such information for
I ourselves. Many times, the opinion of the other person is taken so that if
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the decision fails to bring the desired results, the blame for the failure can
I be shifted to the person who had provided the information. However, this
is a poor reflection on the manager's ability and integrity and the manager
must be held responsible for the outcome of the decision. Accordingly, it
is his moral duty to analytically judge the accuracy and reliability of the
information that is provided to him.

(v) The method for analyzing the information may not be a sound one:
Since most decisions and specially the non-programmed ones have to be
based upon a lot of information, and many factors and variables, the
procedures to identify, isolate and select the useful information must be
sound and dependable. Usually, it is not operationally feasible to
objectively analyse more than five or six pieces of information at any given
time. Hence, g model must be built which incorporates and handles many
variables in order to aid the decision maker. Also, it is desirable to define
the objectives, criteria and constraints as early in the decision making
process as possible. This would assist in making the process more formal
so that no conditions or alternatives would be overlooked.
 -

Interpersonal Process and

Conflict Resolution
Stages in the creative process

Stage Type Behaviours

Preparation Conscious Saturation: Investigating the problem in all

directions to become fully familiar with it, its
setting, causes, and effects.
Deliberation: Mulling over these ideas,
analyzing and challenging them, viewing them
from different optics.

Latent period Unconscious Incubation: Relaxing, switching off, and turning

the problem over to the unconscious mind.
Illumination: Emerging with possible answers -
dramatic, perhaps off beat, but fresh and new.

Presentation Conscious Verification: Clarifying and flushing out the

idea, testing it against the criterion of
appropriateness.
Accommodation: Trying out the solution on
other people and other problems.

Activity 8

Do you use any other model for making decisions other than the models
presented above? Illustrate.

8,9 LET US SUM UP

In this unit we have discussed the importance of decision making, the process
involved and different models of decision making and how decision making is
helpful in everyday life. We discussed various characteristics of decision
making. Four types of decisions have been discussed in this unit. We have also
discussed four major models: contingency model, economic man model,
administrative man model and social man model. Various factors and personal
characteristics that have an impact on decision making have also been
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discussed.

8,lO UNIT-ENDEXERCISES
1. Explain the concept of rationality in decision making?
limitations?
What are its
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2. Discuss the economic man model of decision making. How does it differ
from administrative man model of decision making?
3. Discuss various types of decision making and illustrate with reference to
the school you are working in.
4. Discuss the process and relationship of creativity and decision making.
1 8.11 SUGGESTED HEADINGS
Decision Making

I . Chhabra, T.N., (2002): Principles and Practice sf Management. Dhanpat

Ii Rai &.Co., Delhi.
1 2. IGNOU, (1987): Management Functions and Rehaviour ,MS-1. IGNOU

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Study Material, New Delhi.
3. JITS, Chandan, (1 998): Organisational Rehaviour. Vikas Publishing House
b Pvt. Ltd.,Delhi.
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4. Mitchell, T.R. and Larson, J.R., (1987): People in Organisations: An

I
Introduction to Organizational Behaviour. McGraw Hill International
- Edition.
5. Raju, R.S. and Parthasarathy, A., (2000): Management Text and Cases.
Prentice-Hall of India Private Limited, India.