Decision Making, Decentralization

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DECISION MAKING,

DECENTRALIZATION
 DECISION MAKING
DEFINITION
• Decision making can be regarded as the mental
processes resulting in the selection of a course of
action among several alternative scenarios.

• Decision making is thought process of selecting a


logical choice from the available options.

• Decision making is the process of making a


choice between a number of options and
committing to a future course of actions.
Problem Analysis
vs
Decision Making
TECHNIQUES OF DECISION MAKING

• PROS AND CONS

• SIMPLE PRIORITIZATION

• SATISFYING

• EXPERTS ORDERS

• FLIPISM

• OPPOSITE ACTION TO THE ADVICE OF MISTRUSTED


AUTHORITIES
DECISION MAKING STAGES

• Orientation stage- This phase is where members


meet for the first time and start to get to know each
other.
• Conflict stage- Once group members become
familiar with each other, disputes, little fights and
arguments occur. Group members eventually work it
out.
• Emergence stage- The group begins to clear up
vague opinions by talking about them.
• Reinforcement stage- Members finally make a
decision, while justifying themselves that it was the
right decision.
DECISION MAKING STEPS

The first step - Outline your goal and outcome.


This will enable decision makers to see exactly
what they are trying to accomplish and keep
them on a specific path.
The second step - Gather data. This will help
decision makers have actual evidence to help
them come up with a solution.
The third step - Brainstorm to develop
alternatives. Coming up with more than one
solution able you to see which one can actually
work.
CONT….
The fourth step - List pros and cons of each
alternative. With the list of pros and cons, you can
eliminate the solutions that have more cons than
pros, making your decision easier.
The fifth step - Make the decision. Once you analyze
each solution, you should pick the one that has many
pros, and is a solution that everyone can agree with.
The sixth step - Immediately take action. Once the
decision is picked, you should implement it right
away.
The seventh step - Learn from, and reflect on the
decision making. Do the evaluation of the decision.
TYPES OF DECISION

• ROUTINE AND STRATEGIC DECISION


• STRATEGIC DECISION
• PROGRAMMED AND NON- PROGRAMMED
DECISION
• POLICY AND OPERATING DECISIONS
• MAJOR OR MINOR DECISIONS
• ORGANISED AND PERSONAL DECISIONS
• INDIVIDUAL AND GROUP DECISIONS
DECENTRALIZATION
DEFINITION

• "A decentralized system is one which requires


multiple parties to make their own independent
decisions“

• According to Allen, Decentralization refers to the


systematic effort to delegate to the lowest level of
authority except that which can be controlled and
exercised at central points.
GOAL OF DECENTRALIZATION

• The primary goal of decentralized is


to give autonomy to different
locations, allowing them to adapt to
the specific working climate of the
individual site.
PRINCIPLE OF DECENTRALIZATION
• Problem-Solving
• Motivation
• Experience Counts
• Involvement
• Be Realistic
• Balance
• Access
• No Pressure
TYPES OF DECENTRALIZATION
• POLITICAL DECENTRALIZATION

• ADMINISTRATIVE DECENTRALIZATION

• FISCAL DECETRALIZATION

• ECNOMIC AND MARKET DECENTRALIZATION


ADVANTAGES OF DECENTRALIZATION

• Top management is relieved of much day-to-day problem


solving and is left free to concentrate on strategy, on
higher level decision making, and coordinating activities.
• Decentralization provides lower level managers with vital
experience in making decisions. Without such
experience, they would be ill-prepared to make decisions
when they are promoted into higher level positions.
• Added responsibility and decision making authority often
result in increased job satisfaction. Responsibility and the
authority, that goes with it makes the job more
interesting and provides greater incentives for people to
put out their best efforts.
Cont…..
• Lower level managers generally have more
detailed and up to date information about
local conditions than top managers. Therefore
the decisions of lower level management are
often based on better information.
DISADVANTAGES OF DECENTRALIZATION

• Lower level managers may make decisions


without fully understanding the "big picture."
• In a truly decentralized organization, there may
be a lack of coordination among autonomous
managers. This problem can be reduced by clearly
defining the company's strategy and
communicating it effectively throughout the
organization.
Cont…..
• Lower-level managers may have objectives that
are different from the objectives of the entire
organization. For example, some managers may
be more interested in increasing the sizes of their
departments than in increasing the profits of the
company.
• In a strongly decentralized organization, it may be
more difficult to effectively spread innovative
ideas.
THANX

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