FUNCTIONS OF

MANAGEMENT

DECISION MAKING
• Decisions are made by everyone in this world and people involved in the

business world, but managers typically face the most decisions on a daily

basis. Many of these decisions are relatively simple and routine, such as

ordering production suppliers, choosing the discount rate for an order etc.

• A major part of decision making involves the analysis of a finite set of

alternatives described in terms of some evaluative criteria. A decision is a

choice and decision making is choice making.

 INTRODUCTION
• For People and organizations including institutions of learning

(schools and colleges) to attain their goals and organizational

objectives, it is important that the best administrative practices must be

functional. One of such practices is democratic governance with

participatory decision making. This means that all stakeholders

(teachers inclusive) must be given the opportunity to play their defined

and legitimate roles.

 WHAT IS DECISION MAKING?

• Decision Making refers to identifying and choosing

alternatives based on the values and preferences of the

decision maker.

• Making a decision implies that, there are alternative choices to

be considered, and assembled and the one with the highest

probability of success or effectiveness is selected.

• Decision making can be defined as the process of sufficiently

reducing uncertainty and doubt about alternatives to allow a

reasonable choice to be made from among them.

• This definition stresses the information gathering function of

decision making. It should be noted that, uncertainty reduces

rather but not eliminated.

 STEPS IN DECISION MAKING/ DECISION
MAKING PROCESS
• Decision making can be effective if the following steps are followed:
1. Identify or Define the Problem:

The first stage in the decision making process is to recognize that a

problem exists and must be solved. The ‘problem’ may be actually be an

opportunity that needs to be exploited; a gap between what the

organization is doing now and what it can do to create a more positive

future.
• The decision maker must be sure he or she has an accurate

grasp of the situation. It is important to pinpoint the actual

cause of the situation, which may not always be obviously

apparent. A critical analysis should be made about the

problem and to come out with an objective.

 2. Gather information on the problem

• The decision maker gathers as much information

possible because having all the facts gives the decision

maker a much better chance of making the appropriate

decision.
 3. Develop Possible Alternative Solution

• This stage links problem diagnosis to the development of

alternative courses of action aimed at solving the problem. The

decision maker attempts to come up with a many alternatives as

possible. A technique known as brainstorming is often used.

Brainstorming is the process whereby group members offer any

and all ideas even if they sound totally ridiculous.

4. Evaluate Alternatives to decide which is
Best
• The process of evaluating the alternatives usually starts by narrowing

the choices down to two or three and then choosing the best one. This

step is usually the most difficult because, there are often many

variables to consider. The decision maker must attempt to select the

alternative that will be the most effective, given the available amount

of information, the legal obstacles, the public relation issues, the

 5. Selection of Alternative/ Making a
Choice
• This stage requires the decision maker to finally make

a selection of the most effective and efficient

alternative. This can be effectively done when decision

maker considers critically the pros and cons of each

alternatives.
 6. Implement the Selected Solution
• Implementation often requires some additional planning time as well

as the understanding and cooperation of the people involved.

• Communication is very important in the implementation stage,

because most people are resistant to change simply because, they do

not understand why it is necessary. In other to make smooth

implementation of the decision, the reasons behind the decision of the

7. Follow up, Control and make Revisions

• The decision maker must follow – up on the decision to

ensure if it is working successfully. If the decision that was

implemented has corrected the differences between the actual

and the desired outcome, the decision is considered

successful.
• However, if the implemented decision has not produced the

desired results, once again the decision must be made. The

decision maker can decide to give the decision more time to

work, choose another generated alternative or start the whole

process over from the beginning.

 PROGRAMMED DECISIONS/ STRUCTURED
DECISIONS
• These are decisions that are routine and repetitive that organizations have

encountered and made before.

• They have objectively correct answers and can be solved by using simple

rules, policies or numerical computations. If you face a programmed decision,

a clear procedure or structure exists for arriving at the right decision.

• An example is a clear procedure for recruiting employees

 NON - PROGRAMMED DECISION/
UNSTRUCTURED DECISIONS

• Exceptional problems are dealt with by non – programmed

decisions. They have a variety of possible solutions, all of

which have merits and drawbacks. The decision maker must

create or impose method for making the decision. There is no

predetermined structure on which to rely. The decision is

 DECISIONS BY LEVELS OF
MANAGEMENT
• OPERATIONAL DECISION

The focus is on day-to-day activities within the company and it is typically made by

lower –level managers. Decisions made at this level help to ensure that daily activities

proceed smoothly and therefore help to move the company forward towards reaching the

strategic goal.

Decisions are made by departmental heads and general manager about the quality of a

particular good to be manufactured, price levels, promotional strategies and distribution

 Tactical Decisions
• These are decisions which focuses on more intermediate- term issues

and are typically made by middle managers. The purpose of decisions

made at this level is to help move the company closer to reaching the

strategic goal. Example includes; picking an advertising agency to

promote a new product or provide incentive plan to employees to

encourage increased production, budget preparation and purchasing

 Strategic Decision
• These are decisions which affects the long-term decision of the entire

company, and typically made by top managers. Examples might focus on

efforts in a new product or to increase production output. These type of

decisions are often complex and the outcomes are uncertain because available

information is often limited. Managers at this level often depend on past

experiences, information and their instincts when making such decisions. Eg;

mergers, acquisition, new product planning and capital investments.

IMPORTANCE OF DECISION MAKING
• Allocating of resources: Decision making helps organizations to allocate its

limited resources efficiently and effectively in order to achieve its organizational

goals and objectives.

• It aids the business to respond to changes in the business environment.

• It helps in fixing prices for the business’ products.

• In planning decision making is useful

• It helps managers to put their plans into action. Their ideas and suggestions are
 PARTIES OR GROUPS INVOLVE IN
DECISION MAKING
• Decision making involves a number of people in an organization. These include;

• Board of Directors (strategic managers) are noted for policy making

• Internal Specialists and outside consultants for technical decisions

• Committees: This is made up of representatives from different division

of the business. They make decisions concerning their division.

END OF LESSON

DANKE SCHONON