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Home > Management Tutorials > Types of Decision Making
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Types of Decision Making
 
TYPES OF DECISION-MAKING
(Ken Shah & Prof. Param J. Shah)
 

Irreversible
This are those type of decisions, which, if made once cannot be unmade. Whatever is decided would than have its repercussions for a long time to come. It commits one irrevocably when there is no other satisfactory option to the chosen course. A manager should never use it as an all-or-nothing instant escape from general indecision.

Reversible
This are the decisions that can be changed completely, either before, during or after the agreed action begins. Such types of decisions allows one to acknowledge a mistake early in the process rather than perpetuate it. It can be effectively used for changing circumstances where reversal is necessary.

Experimental
This types of decisions are not final until the first results appear and prove themselves to be satisfactory. It requires positive feedback before one can decide on a course of action. It is useful and effective when correct move is unclear but there is a clearity regarding general direction of action.

Trial and Error
In this type of decisions, knowledge is derived out of past mistakes. A certain course of action is selected and is tried out, if the results are positive, the action is carried further, if the results appear negative, another course is adopted and so on and so forth a trial is made and an error is occurred. Till the night combination this continues. It allows the manager to adopt and adjust plans continuously before the full and final commitment. It uses both, the positive and negative feedback before selecting one particular course of action.

Made in Stages
Here the decisions are made in steps until the whole action is completed. It allows close monitoring of risks as one accumulates the evidence of out- comes and obstacles at every stage. It permits feedback and further discussion before the next stage of the decision is made.

Cautious
It allows time for contingencies and problems that may crop up later at the time of implementation. The decision-makers hedge their best of efforts to adopt the night course. It helps to limit the risks that are inherent to decision- making. Although this may also limit the final gains. It allows one to scale down those projects which look too risky in the first instance.

Conditional
Such types of decisions can be altered if certain foreseen circumstances arise. It is an ‘either / or’ kind of decision with all options kept open. It prepares one to react if the competition makes a new move or if the game plan changes radically. It enables one to react quickly to the ever changing circumstances of competitive markets.

Delayed
Such decisions are put on hold till the decision–makers feel that the time is right. A go-ahead is given only when required elements are in place. It prevents one from making a decision at the wrong time or before all the facts are known. It may, at times result into forgoing of opportunities in the market that needs fast action.

THINGS TO DO

* Always look at your decisions hypercritically.

* To make sure you have covered everything, go over your objectives again before starting your report.

* List all the benefits reaped from your decision – as well as the negatives.

* Name the deadlines by when approval is required.

* Redefine your decisions if they are not working.

 
BEING DECISIVE

The ability to take timely, clear and firm decisions is an essential quality of leadership, but the type of decision needed varies according to the circumstances. Learning to recognize the implications of taking each type of different decisions leads to error minimisation.

BEING POSITIVE

Taking decisive action does not mean making decisions on the spur of the moment. Although, it may be necessary in emergencies and also occasionally desirable for other reasons. A true leader approaches the decisions confidently, being aware of what must be taken into account and fully in command of the decision–making process.

MAKING FAST DECISIONS

It is important to be able to assess whether a decision needs to be made quickly or it can wait. Good decision-makers often do make instant decisions – but they then assess the long-term implications.

Identifying Issues
It is crucial to diagnose problems correctly. Before any decision is made identifying and defining the issue removes the criticality. This also means deciding who else needs to be involved in the issue, and analyzing what their involvement means.

Prioritizing factors
While making a decision, a manager needs to prioritize on important factors. Some factors in a process are more important than others. The use of Pareto’s rule of Vital few and trivial many helps in setting up of the priorities. Giving every factor affecting a decision equal weight makes sense only if every factor is equally important, the Pareto rule concentrates on the significant 20 percent and gives the less important 80 percent lower priority.

Using advisers
It is advisable to involve as many people as are needed in making a decision. In making collective decisions, specific expertise as well as experience of a person both can be used simultaneously. The decision-maker, having weighed the advice of experts and experienced hands, must then use authority to ensure that the final decision is seen through.

Vetting decisions
If one does not have the full autonomy to proceed, it is advisable to consult the relevant authority – not just for the final go, but also for the input. It is always in the interest of the subordinate to have the plans vetted by a senior colleague whose judgment is trusted and is experienced. Even if there is no need to get the decision sanctioned, the top people are likely to lend their cooperation well if they have been kept fully informed all the way along the decision path.

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