CHAPTER 5

Decision Making

CHAPTER OBJECTIVES

After reading this chapter, you should be able to:

1. Understand the definition and characteristics of decision making
2. Enumerate the approaches to decision making
3. List the kinds of decision making environments
4. Explain the strategies for decision making
5. List the types of organizational problems and decisions
6. Understand the decision-making styles
7. Enumerate the process of rational decision making
8. Discuss the factors influencing the decision-making process
9. Understand the challenges to effective decision making
10. Explain decision tree
11. Overview group decision making
12. Understand the decision support system

India’s Inspirational Managers

Ratan Tata is the former chairman of Tata Sons—the promoter company of Tata Groups. Ratan Tata proved himself to be a master decision maker through Tata’s successful acquisition of several giant transnational companies such as Tetley, Jaguar Land Rover and Corus. The daring decision of Tata Steel to acquire Anglo–Dutch steel producer Corus—a company which was almost three times bigger than Tata Steel’ for USD 12.1 billion—demonstrates Ratan Tata’s astute decision-making skills. His managerial and decision-making skills won him many accolades in national and international forums. For instance, Yale University gave him the Legend in Leadership Award in 2010. He was also a recipient of NASSCOM’s Global Leadership Award in 2008. Ratan Tata’s managerial philosophy includes: (i) fostering high value systems and ethical standards, (ii) undertaking bolder and larger endeavours in the place of small increases and timid growth, (iii) playing down individuals and playing up the team, (iv) adapting new technologies, (v) going global for achieving a meaningful presence, (vi) empowering employees and creating an exciting work environment, (vii) providing equal opportunities for all employees and (viii) caring for all customer segments.

Keeping the decision-making and other managerial skills of Ratan Tata in mind, we shall now elaborate on the various aspects of decision-making activities.

Introduction

Decision making involves selection of the best option from the available options. Managerial decision refers to the decisions made by the managers for solving organizational problems. Decision making is part of all managerial functions of the organization. However, there are usually differences in the nature, scope and pattern made at different levels of management. Decision-making skill is critical for every manager as it determines their success in the job. Most managerial decisions are irreversible and also impact the future fortunes of the whole organization. Hence, managers must possess relevant knowledge, skills, experience, creativity and boldness for making efficiency decisions in different situations. However, the efficiency of any managerial decision is usually determined by two primary factors, namely, decision quality and acceptance.¹

Decision making as a part of the problem-solving process usually has three components. They are input (organizational problems), process (management) and output (solutions to problems). A successful output requires wise decision making by managers based on quality thinking and self-confidence. Managers must have the ability not only to make the right decision but also to defend their decision. For effective decisions, managers must know how to choose the best option for decision making, how to use tools for decision making, how to avoid common errors and how to enhance the quality of decisions.

Definitions of Decision Making

Decision making is the logical response of managers to any problem situation. It involves the process of evaluation and selection of alternatives for solving the problem. Thus, choosing the best solution for organizational problems is the essence of many definitions of decision making. Let us look at a few definitions.

“Decision making is the process of identifying and selecting a course of action to solve a specific problem.” —James Stoner.²

“A conscious choice among alternatives followed by action to implement the choice is decision making.” —Thomas N. Duening and John M. Ivancevich.³

“Decision making is the process of identifying and choosing among alternative courses of action in a manner appropriate to the demands of the situation.” —Robert Kreitner.⁴

We may define managerial decision making as the process of identifying the best solution to an organizational problem after giving due consideration to all possible solutions and environmental constraints.

Characteristics of Managerial Decisions

Managerial decision making is a crucial and continuous task carried out by managers. It requires systematic, and timely action from managers. Such managerial decisions will usually have the following characteristics:

• Future-oriented—All managerial decisions consider and decide only the future course of actions. These decisions are oriented towards a future period of time. However, the past and present information are essential inputs for determining the future course of action.
• Choice-based—The important prerequisite of decision making is the availability of more than one choice for resolving the organization problems. Decision making is meaningless when the problem has only one possible solution without any alternative choices or solutions.
• Inbuilt uncertainty and risk—The outcome of any decision is neither known in advance nor accurately measured before implementation. Understandably, all decisions are characterized by certain degree of uncertainty and risk.
• Goal fulfilment—Similar to any other managerial activity, decision making also primarily aims at accomplishing the objectives, plans and goals of the organization. These organizational goals and objectives generally guide the managerial decision-making process.
• Intangibility—Similar to other managerial functions, decisions are also intangible in nature. But, decisions are real activities that run through the entire organization. Decisions are capable of influencing the activities of the organization and its members.
• Analytical approach—Managerial decisions require analytical approach to the problem-solving process. Analytical approach actually means a creative, analytical and practical approach to problem solving⁵. Analytical approach helps managers in objectively assessing the problem and also in taking logically sound decisions.

Approaches to Decision Making

Historically, two alternative approaches are available to decision making. They are classical approach and behavioural approach. The classical decision approach or theory views the managers as acting under a perfect decision environment in a world of complete certainty. In contrast, behavioural decision theory assumes that the decision makers act only in terms of what they perceive about the environment. This is because they operate in a world of uncertainty and may not have complete information about the environment. (Decision environments are elaborated a little later in this chapter.)

A third approach called “garbage can” model. As per this approach, all the components of the decision process such as problems, solutions, participants and situations are mixed up in the “garbage can” of the organization. Decision makers should ensure that specific problems are matched to specific and appropriate solutions in an orderly manner.⁶ This model views decision making as a highly unstructured process and that the decisions often begin with solutions and not problems. In this regard, it assumes that problems arise just after solutions emerge. For instance, when an organization develops high quality products, it has to find ways to market them.

Decision-making Environments—Types

The decisions of managers are normally influenced by the environment in which the decisions are made. The decision environment is made up of cultural factors, legal factors, political factors, organizational factors and other information available at the time of decision making.⁷ When the decision environments are created through accurate, adequate and timely information, they can improve the effectiveness of decision making. In practice, it is difficult to develop a perfect decision environment because of information and time constraints. Due these constraints, managers usually operate under one of the three different kinds of decision environments while making decisions. They are: (i) decision environment under certainty, (ii) decision environment under risk and (iii) decision environment under uncertainty. We shall now discuss them briefly.

Decision Environment Under Certainty

When the information available for decision making is adequate and perfect for accurate prediction, then the environment can be described as certainty. In such an environment, managers can identify and evaluate each alternative solution to a problem properly and also predict their outcomes accurately. For instance, when the purchase manager has all the details of different vendors and their products’ price, performance, features and other necessary information, then he/she can make a decision (i.e. choosing a vendor for supplying the raw material) by being fully aware of the outcome of the decision. But managers rarely face a decision environment with certainty in real-life situations as future is always uncertain and unpredictable.

Decision Environment Under Risk

This is an intermediate situation where the outcome of an alternative cannot be predicted with certainty. However, the probability of a specified outcome can be measured. Based on their knowledge, experience, judgemental skills, together with adequate information, managers can predict the chances of a desired outcome. Under this method, managers measure quantitatively the chances that the expected outcome will occur and then appropriately make their decisions. For example, when the HR manager knows out of past experience and records that a specific number of employees would leave the organization in a normal year, he (or) she can then determine the probable vacancies and workforce requirements for that year.

Decision Environment Under Uncertainty

In an uncertain environment, managers can predict neither the outcomes nor the probability of outcomes of their decisions. When managers face restricted access to internal information or deal with uncontrollable external factors, then the decision environment becomes uncertain. In such an uncertain environment, managers may have to make decisions without knowing all possible alternatives and likely outcomes. When the marketing manager decides on discount offers for the product, the response of the competitors and customers to such offers may not be known to him. This may make the decision environment uncertain and outcomes unpredictable.

Usually there will be uncertainty regarding one or more elements of the problems in decision making in an environment of uncertainty. The decision maker generally uses mathematical models or theories to specify and deal with those uncertain elements. These models are usually classified into probabilistic and non-probabilistic models based on how uncertainty is treated.

Probabilistic vs. non-probabilistic models—In the case of probabilistic model, the decision maker is normally able to specify the probability of each of the uncertain events associated with the decision process. The probabilistic model is often used for decision making under risk.

In the case of non-probabilistic models, the decision maker is not able to specify the probability of an uncertain event. The non-probabilistic model deals with decision making under uncertainty. However, some experts argue that both probabilistic and non-probabilistic models have applications for decision environment under both risk and uncertainty.⁸ We shall now see the important models or theories that have relevance for decision making.

Decision theory—It is basically a study of decision making under uncertainty using mathematical models. It is mainly a one-person game or a game of a single player against nature. This theory makes available a logical framework for managers for developing a system or rule that may lead to the selection of a best course of action under the prevailing environment. Decision theory can be normative or descriptive in nature. A normative decision theory is a theory on how decisions should normally be made. A descriptive theory is a theory on how decisions are taken in reality.

Game theory—It is essentially a two-person, zero-sum game. As per this theory, one person’s success in making choices depends on the choices of others. The decision makers employ games of strategy (similar to playing chess) but not of chance (similar to tossing a coin). In a game of strategy, two or more persons face with competing choices of action. Each person may gain or lose from his or her choice of action depending upon what others choose to do or not to do. The ultimate outcome of the game will be decided by the strategies adopted by its participants. Game theory is indeed a zero-sum game because one person’s gain is another person’s loss.

Game theory can be divided into two main branches: cooperative game theory and non-cooperative game theory. These two theories differ on the basis of how they formalize interdependence among the players. In the case of cooperative game theory, players can coordinate their strategies by pooling their individual strategies through binding agreements and redistribute the joint strategies in a specific way. They finally share the pay-off (benefits) available out of such joint strategies. In contrast, a non-cooperative game is a detailed model of all the moves available to the players. In this, players mostly make independent and self-enforcing decisions. This theory deals largely with how intelligent individuals interact with one another in an effort to achieve their own goals.

Dynamic stochastic general equilibrium theory—This theory is basically a specialized branch of game theory. It is a well-designed framework that provides quantitative answers to questions of decision makers interested in knowing the business cycle effects. This theory aims at describing the behaviour of an economy as a whole by analysing the interaction of many microeconomic decisions. It helps decision makers in understanding the aggregate economic phenomena like economic growth, business cycles and the effects of monetary and fiscal policy.

Mechanism design theory—This theory provides a general framework to study any collective decision problems such as the allocation of work in a team, the allocation of funds in an organization, etc. Mechanism design theory is different from game theory. For instance, game theory takes the rules of the game as given, while the mechanism design theory asks about the consequences of different types of rules. Mechanism design theory has concrete applications in the real world. It can provide important justifications for government intervention in market operations and also for framing rules and regulations.

Since decisions cannot be made in vacuum, managers must carefully analyse the decision environment. They must look for facilitating factors as well as limiting factors for their decisions in the environment. Within the constraints, they should choose the best possible alternative by fully utilizing the information available within the environment.

Strategies for Decision Making

Depending on the nature of decision environment, managers may choose an appropriate strategy for making effective decisions. They can adopt any one of the following four strategies for decision making:

• Optimizing—This strategy expects managers to choose the best possible alternative to solve any organizational problem. They must develop as many alternatives as possible and choose the very best without any compromise.
• Satisficing—This term is a combination of two terms, namely; satisfactory and sufficient. As per this strategy, managers must decide on a solution that satisfies the minimum requirements to achieve a goal without waiting for the best solution to emerge. Managers may adopt this strategy when they have to purchase low-cost stationery items for their office.
• Maximax—This means “maximize the maximums.” According to this strategy, managers evaluate the alternatives with the intention of choosing “the best of best options” and remain optimistic about favourable outcome. However, managers adopting this strategy usually prepare themselves for both high risk and high return.
• Maximin—This means “maximize the minimums.” This approach involves making the best out of the worst possible conditions. In this strategy, managers identify the worst possible outcomes for their decisions and choose the best among these options to minimize the loss. They remain pessimistic about the outcomes of their decisions and play it safe by opting for a minimum but definitely positive outcome. They adopt this strategy when the risks are high and the consequences of failure are enormous. For instance, organizations may choose to launch a product that gives them a minimum guaranteed profit as against another product that may earn better profit but has high chances of failure.

Adopting any of the above-mentioned strategies, managers may decide the suitable course of action to solve the organizational problems. However, the types of decision would differ depending on the nature and intensity of the problems. We shall first see the types of problems followed by the decision types.

Types of Organizational Problems

Managers come across a variety of problems and situations while doing their duties. Most of these situations demand a response from the managers in the form of decisions. Depending on the nature and intensity of the problems, managers may choose a specific course of action. Based on the nature, the problems requiring decisions can be classified into three. They are as follows:

• Structured problems—These problems are usually “easier to solve,” recurring and straightforward in nature. Information and procedure required for solving such problems are usually available with the managers. For instance, nonpayment by a credit customer is a structured problem for the managers. This is because they would be well aware of the customer details and also the procedure to be adopted for collection of such outstanding debt.
• Semi-structured problems—These problems are partly structured and partly unstructured in nature. In other words, managers would certainly have some information and procedure for solving these problems, but not adequately. This can happen due to the non-availability of adequate and timely information. To some extent, managers would be forced to depend on subjective judgement for solving semi-structured problems. For instance, managers may have complete information about the internal factors affecting their pricing decision, but not enough information about the external factors.
• Unstructured problems—These are problems that are unusual, new, and difficult to be defined with clarity. Managers cannot have any readymade solution for these problems. They may find it difficult and time-consuming to collect all facts about the problem. They may also be required to develop an all new procedure for tackling such problems. These problems often call for the time, resources and attention of the higher levels of management. Any solution to such problems is normally developed on the basis of the expertise, experience, skills and intuitions of the managers. For instance, a successful implementation of a merger proposal by a company may create unstructured problems to the management.

Having discussed the kinds and nature of organizational problems, we shall now discuss the types of decisions required for solving those problems.

Programmed decisions—Managers make programmed decisions to solve routine, repetitive and well-structured problems. These decisions are usually taken in conformity with the established policies, procedures and rules of the organization. These routine decisions may also be made on the basis of the past experience and technical knowledge of the managers. In practice, every organization keeps certain standard procedures for tackling routine problems.⁹ These decisions enable the managers to spend their precious time and resources on solving complex decisions.

Once the problems are clearly defined and the decision-making procedure is well-established, the lower-level managers can be permitted to handle these problems. This arrangement will enable the top-level managers to focus more on non-recurring, intense and complicated unstructured problems. For instance, the procedure and time limit set by the textile shops for permitting their customers to exchange their recently-bought clothes with a new piece is an instance of programmed decision for solving customer complaints

Non-programmed decisions—Managers formulate non-programmed decisions for tackling exceptional, complex and unusual problems. The need for non-programmed decisions may arise when adequate information or pre-determined procedure is not readily available with the managers for solving the problems. For instance, non-programmed decisions are usually made by managers to capitalize on the new opportunities or deal with the new threats found in the environment. Decisions by a bank management to install an ATM facility at a specific location can be a non-programmed decision.

The non-programmed decisions require systematic analysis of the problem, logical decision-making abilities and significant amount of time. These decisions are usually made at the higher levels of the management. Mergers and acquisitions (M&A), product or service pricing, make or-buy decisions, utilization of scare resources, acceptance or rejection of non-routine orders, employee wage agreements and legal issues are a few occasions for non-programmed decisions.

Decision-making Styles

A decision-making style can be defined as the habitual pattern that individuals adopt in decision making.¹⁰ Managers may have their own way of performing decision-making tasks. The nature and intensity of the problems, characteristics of the decision-making environment and also the individual differences among managers can act as the major determinants of decision-making styles. Even though managers may have their own style of decision making, they can also follow any of the four following decision-making styles. They are: (i) rational style, (ii) avoidant style, (iii) dependent style and (iv) intuitive style.¹¹ We shall now see the basics of these styles.

• Rational style—The fundamental aim of this style is to keep off the emotional factors in decision making. In this style, managers make decisions only after systematically and logically analysing the problem and the possible solutions. They strive to get one best outcome of the whole decision exercise. The basic requirements of rational style decision making are as follows: (i) problems are clear and well-defined, (ii) goals are well-focused, and attainable, (iii) alternatives and their future consequences are knowable, (iv) preferences are not unstable, (v) absence of time and resources constraints and (vi) best return or pay-off from the chosen alternative is possible.¹² Lastly, this style emphasizes managers to ensure that their decisions serve the organizational interests in the best possible manner and not serve their own selfish interests.
• Avoidant style—In this style, managers make all possible efforts to delay the decisions. They adopt this style just to avoid any negative outcome of their decisions. In this style, managers begin the decision process to solve the problems only after adequate pressure is brought on them. This style is normally adopted by managers in situations where they:

   

  • Consider the problems to be less significant and waiting is a better option.
  • Feel the problem is just a symptom of much bigger issues and the root of the problem lies elsewhere.
  • Feel that not much is possible because they have little control over the situation.
  • Think the decisions may produce a lot of resentment and hurt feelings causing disquiet among the people.

The adoption of avoidant style by managers can demoralize the subordinates resulting in low productivity and performance.

• Dependent style—In this style, managers extensively consult others by seeking their advice and directions before making decisions. Managers normally take less responsibility for their decisions. This is because such decisions are made mostly on the basis of the opinions and advice of others. Generally, managers adopting this style prefer to remain passive and allow themselves to be heavily influenced by the expectations of others. Usually, the dependent style indicates clearly the lack of problem-solving confidence of the individuals.¹³
• Intuitive style—Intuitions may be defined as “affectively charged judgements that arise through rapid, non-conscious, and holistic associations.”¹⁴ In intuitive style, managers choose to make decisions based on their own instinct or gut feeling. As such, managers’ emotional self-awareness forms the basis of choosing an alternative to solve the problem. Understandably, managers focus less on systematic information gathering and logical analysis of the problem. They depend more on their past experiences and learning, which make up their intuitions. However, managers accept responsibility for their decisions even if they have very little knowledge about the possible outcome of such decisions.

The above mentioned individual decision-making styles affect the managers’ approach to the decision-making process. According to Kinicki,¹⁵ there are two factors that typically influence the choice of managers of a specific style. They are: (i) value orientation and (ii) tolerance for ambiguity. Value orientation refers to a manager’s focus and priorities in the decision-making process. Tolerance for ambiguity refers to the ability of the managers in coping with choice and uncertainty. Box 5.1 shows the decision-making style followed in a private company.

Rowe and Mason¹⁶ have also classified the decision styles into four types, based on value orientation and tolerance for ambiguity. They are: directive, analytical, conceptual and behavioural. Table 5.1 shows the focus and level of tolerance of managers in adopting a specific style.

 

Studies on decision-making styles have however shown managers to be adopting multiple styles for analysing the problems and evaluating the alternatives.¹⁷ Managers can adopt different styles for different occasions of decision making. In any case, they must consider carefully the nature of the problem, people and process before deciding on the decision style.

Decision making often requires managers to take up logically-sequenced activities for thorough analysis of the problems, effective evaluation of alternatives and selection of the best possible choice. We shall now discuss the steps involved in any rational decision-making process.

Steps in the Rational Decision-making Process

Managers adopting a systematic decision-making process will surely have a high chance of success in their decisions. In this regard, managers can develop their own style, approach and process for decision making. They can also adopt the following seven-step decision-making process after making necessary changes to suit their specific requirements (Figure 5.1). These seven steps are: (i) recognizing the problem and its cause, (ii) determining the decision objectives and criteria, (iii) developing alternatives, (iv) evaluating the alternatives, (v) making decision, (vi) implementing the decision and (vii) feedback and follow-up. We shall now discuss these steps in detail.

1. Recognizing the problem and its cause: A problem is actually a situation or an issue that prevents the realization of desired goals and purposes. The presence of a problem is essential for beginning a decision-making process. It may be a relatively small and routine problem with almost known outcome or a serious crisis with unimaginable consequences. To begin with, managers must recognize the symptoms, characteristics, likely impact and urgency of the problem at hand. In this regard, they can make use of their knowledge, skills and experience to accurately assess the impact and intensity of the problem. They must also trace and understand the root cause of the problem and distinguish it from symptoms. For example, a sudden increase in the incidents of employee indiscipline could just be a symptom of a wage problem. As such, the real problem might be the unsuccessful wage negotiations between the management and workers’ union. In this case, it is impossible for managers to eliminate problems of indiscipline without first resolving the wage issues.

   Managers must develop a mechanism for identifying the problems arising in the organization. An effective problem-finding system can help managers in tracing the problems early and settling them quickly. In this regard, William Pounds¹⁸ listed four kinds of situations that normally forewarn managers about a future problem. They are as follows:

    

   • Deviation from the past—When a firm’s performance in one year is different from the consistent performance of other years, it may signal the presence of a problem. For instance, a drastic fall in the sales revenue of a firm is a sure sign of an impending problem.
   • Failure to accomplish goals and plans—Non-accomplishment of predetermined goals, budgets, targets and plans by a department or an organization can be a sign of a problem. For instance, when there is a cost or time overrun in a project, it is an indication of a problem.
   • External environmental changes—Any change in the external environment may cause problems for the organization. For instance, introduction of a new product by the competitor or new regulation by the government can cause problems for managers in the near or distant future.
   • People-centred—People interacting with the managers are also possible sources of problem. For instance, customers may complain about the product or service quality. Similarly, workers can get upset with the work schedules or revised production goals.

   Once the problem is effectively identified and defined, it would be relatively easy for managers to seek the right solution. However, in practice, it is certainly not easy to accurately define a problem.¹⁹ This is because, the personal characteristics and individual decision-making style of managers often influence the way a problem is approached and solution is developed.²⁰

    

2. Determining the decision objectives and criteria: The next essential step for managers is to identify the objectives to be fulfilled through the proposed decision. Each problem may present managers with either the opportunities for better performance or hurdles to achieving the predetermined goals. Each manager must ask the question, “What would I like to achieve in this situation?” What they decide now becomes their decision objectives. Determination of objectives for the decision-making process can ensure that the activities of the managers are purposeful and goal-oriented. These objectives can also help the managers in determining what actions and undesirable consequences are to be avoided while making decisions. While choosing the decision objectives, managers must ensure that the objectives are essential, controllable, complete, measurable, operational, decomposable (capable of being partitioned), and understandable.²¹

   Besides determining the decision objectives, managers should also identify the decision criteria for comparing and evaluating the alternative solutions. The nature of problem and organizational policies usually determines these criteria. These criteria act as specific measures and help managers in determining the best solution for their problem. For instance, age, communication skills, inter-personal and socialization skills, and physical endurance are usually the relevant decision criteria for marketing managers while recruiting sales force.

   Managers usually assign different weights to each criterion in multi-decision criteria. Understandably, the most important criterion gets the highest weight. For instance, a manager may assign top weight to communication skills while recruiting sales force.

    

3. Developing alternatives: Having framed the decision objectives and criteria, managers must now build a list of possible alternatives for solving the problem. At this stage, the aim of managers is to develop as many alternatives as possible without worrying about their worth and suitability. Managers should avoid any premature evaluation of the alternatives at this stage as it could result in the rejection of even some good alternatives.

   In a competitive environment, alternatives must be developed effectively and rapidly. Besides individually generating alternatives, managers can also involve others by employing group decision-making techniques. Some of the important techniques available to managers for developing alternative are:²²

    

   • Brainstorming—This is a face-to-face interactive group technique available for generating creative ideas. The objective here is to generate as many ideas as possible, group members are therefore encouraged to build a large number of alternatives based on everyone’s ideas. These ideas are neither criticized nor evaluated at this stage.
   • Incubation—In this technique, managers allow their subconscious mind to consider the problem deeply and incubate (develop) ideas. At the same time, their conscious mind would have taken a break from the problem and focusing on some other work. Often, a deep insight into a problem may create a spark or sudden illumination in the mind, which may enable managers to solve the problem.²³
   • Visualization/Imaging—Visualization may be defined as “the process of taking abstract ideas and data and translating them into easily understood and interpreted images to enhance decision-making process.”²⁴ In this technique, managers develop a mental picture of the whole problem and also the precise parts of that problem. Then they visualize and experience different alternatives for solving the problem. In this regard, they can also build in their mind the likely post-decision scenarios under each of these alternatives.
   • Outcome psychodrama—The term psychodrama may be defined as “the science which explores the truth by dramatic methods.”²⁵ This is a flexible and creative approach to problem solving based on a role-playing technique. In this method, a problem is presented to the members to dramatize or act out. In a spontaneous situation, members can offer creative and natural ideas without thinking about self. As part of psychodrama, decision-makers may also adopt role reversal in which the members change role with someone else. The purpose here is to make the members more expressive in their role and ideas.
   • Random word technique—In this technique, the decision maker is presented with a word randomly chosen from the dictionary along with the problem. The efforts to correlate the problem with a random word may prompt the decision maker to step into unconventional route and to conceive new ideas.

   It is important for managers to identify all possible alternatives to ensure that the best alternatives are not omitted. The availability of a large number of options would also enable managers to apply an effective evaluation and filtering process. Thus, the success of this stage depends on the ability of the managers to generate non-standard and creative alternatives.

4. Evaluating the alternatives: After identifying all possible alternatives, managers should begin evaluating each one of them in the context of the decision objectives and criteria. In this regard, they should compare these alternatives to determine their relative worth and relevance to the problem situation. While evaluating the alternatives, managers are usually guided by their experience, intuition and personality factors. They often opt for alternatives that have the least amount of risk and uncertainty, and show reasonable prospects for success.

   While evaluating the alternatives, managers usually look to: (i) solving (ii) resolving or (iii) dissolving the problem.²⁶ In solving the problem, managers choose the best possible solution after careful and thorough investigation. While resolving the problem, managers’ aim is to choose an alternative that just satisfies the minimum requirements and somehow solves the problem. This satisficing approach may not produce the best possible solution to a problem. Finally, a problem is dissolved when managers change the situation that creates the problem and thereby make the decision making superfluous. For instance, managers may fully automate manufacturing facilities just to dissolve labour-related problems.

5. Making the decision: A decision is a conscious choice made from available alternatives. After carefully evaluating various alternatives, managers decide on a specific course of action that ensures the best possible outcome. This is obviously the most crucial step for managers as any wrong choice may result in time and resources wastage. Usually, managers choose a single but appropriate alternative for solving the simple and direct problems. In contrast, they may combine several alternatives to form the most effective solution for solving a complex problem. In any case, they should spend sufficient time at this stage to make the decisions fail-proof. Selecting the best alternative becomes relatively less difficult if the managers had worked on the previous steps effectively.²⁷ After identifying the best alternative, managers should get ready with the resources required for its implementation. They should also finalize the timing and mode of its execution.
6. Implementing the decision: At this stage, the decision made is brought into effect by the managers. Managers should ensure that the decision is properly communicated to all the participants in the implementation process. The participants must be explained the reasons for and consequences of a specific decision to get their cooperation. They should also be well-informed of the manner in which the decision will be implemented and the activities to be performed by them.

   Even a good decision is bound to fail if the participants in the process are unwilling or are unable to carry it out. To achieve success in implementation, managers must ensure that the: (i) decision is clear and consistent, (ii) organizational structure and environment are conducive, (iii) participants are skilful and committed and (iv) time and resources are adequate. In this regard, managers can use techniques such as force field analysis to identify and assess the favourable and unfavourable factors in decision implementation. Based on the analysis, managers can initiate efforts to strengthen the forces favouring the decision and minimize resistance, if any.

7. Follow-up and feedback: In this last stage, managers must continuously monitor all activities to ensure that they contribute to decision success. Follow-up helps managers in effectively controlling the implementation process. It also makes possible any mid-way correction and improvements in the process before a decision goes totally wrong or irredeemable.

Decision making is a continuous and challenging task of managers. Hence it is essential to evaluate the outcome of each decision. The result of such evaluation is critical to determining the efficiency of the entire decision-making process. It also helps managers in determining the reasons for the success or failure of decision exercises and in fine-tuning the decision process in future. However, the success of any decision in a real environment is certainly influenced by a variety of factors. It is essential for managers to have a good knowledge of these factors.

Factors Influencing the Decision-making Process

Decisions cannot be made in vacuum and as such several factors influence such decisions and their environment. It is therefore necessary for managers to identify those factors and understand their role and relevance to the decision-making process. These factors are usually classified into internal and external factors. Let us now discuss these factors briefly (see Figure 5.2).

External Factors

Factors external to the decision makers but influence their decision processes are called external factors. They are as follows:

Nature of environment—Environmental factors refer to social, cultural, political, legal, technological and economic environments within which organizations operate. These factors remain outside the organization but influence the decision-making process of managers. Any changes in these environments may produce opportunities or threats for the organization and thereby a problem situation. Managers must constantly watch these environments to detect the problems early and solve them quickly.

Availability of time—Time is a crucial factor in making and implementing decisions. It is necessary for managers to consider the time available and time required for making decisions. When time is not a constraint, managers can allow sufficient time for every stage of the decision process. If the decision cannot wait any delay, they should rush through the whole decision process. Clearly, time constraints can affect managers’ ability to gather information required for developing alternatives for effective decision making.

Sufficiency of resources—Resource availability can also affect the managerial decision-making process. The level of difficulty in obtaining both human and physical resources can determine the success of the decision-making process. Once the decision is made, it is necessary for managers to mobilize the necessary resources to achieve the desired decision outcome.

Internal Factors

Internal factors are the individual strengths and weaknesses of the decision makers. These internal factors as follows:

Physical and emotional state—Usually, the “mood of the decision makers” can also have an impact on their choices. The clarity level of decision makers is usually characterized by a balance of their physical, mental and emotional systems.²⁸ The ultimate selection of a decision alternative may be influenced by psychological factors such as feelings of regret, disappointments, joy, etc.

Personal value, philosophy and attitude—Value systems of managers are shaped by the culture in which they practice and experience. These values in turn guide their attitude, philosophy and behaviour. Managers’ attitude towards risk, tolerance towards ambiguity, their own value system and ethical practices can influence their decision choices. When organizational values are strictly followed in all managerial decisions, such decisions are known as value-based decisions. Box 5.2 discusses the values applied by a leading Indian biopharmaceutical company in the decision-making process.

Knowledge, skill and ability (KSA)—The extent of the presence of decision-making and problem-solving skills in managers can make a difference to their decision-making ability. Managers’ mastery over other relevant skills such as interpersonal skills, communication skills and goal-setting skills can also influence their decision-making effectiveness.

Challenges to Effective Decision Making

Every manager likes to make good decisions, but their efforts are hindered by the presence of numerous challenges in the decision process. These challenges often make decision making difficult and at times an unproductive exercise. Hence, managers must be cautious of these challenges. Let us now discuss these challenges in detail.

Bounded Rationality

Herbert Simon has advocated a realistic, but a slightly pessimistic theory, known as the theory of bounded rationality. This theory suggests that decision makers in practice have only limited time, resources and intelligence. As such, the information gathered by them remains inadequate and incomplete due to these limiting factors. Consequently, they limit their search for alternatives and also avoid a thorough evaluation of them. These practical difficulties often make them compromise their search for best solution and settle for the first satisfactory decision known as satisficing.

Fear of Failure

Managers who have a pessimistic mindset and are not confident about the decision outcome often resist decision making. Such managers show reluctance in doing new things or trying challenging assignments. They may have developed the fear of failure from their own or from others’ past experiences. Effective managers, in contrast, make quick and informed decisions without any undue anxiety about the outcome of their decision.

Misaligned Priorities

Decision making involves proper alignment of people, programmes, processes and systems for effective decisions. However, in reality, the success of decision making is often affected by the misalignment of these priorities by managers.

Information Overload

Information overload can have an adverse effect on decision process and decision quality. Advancements in information technology and the internet have made information overload a real problem for managers. The presence of a large amount of information may force busy managers to avoid a serious search of information while developing decision alternatives. According to Jacoby and others, when there is an information overload, the decision quality first increases, and later significantly decreases.²⁹ However, information overload can increase decision quality if the managers are not under any time pressure.

Absence of Creativity

In a fast-paced environment, managers often make stereotypical decisions and avoid, if possible, risky and unconventional approaches. Nonflexible organizational policies and practices also limit their freedom to try out innovation and out-of-box thinking. Understandably, this lack of imagination and absence of creativity affect the manager’s ability to make successful decisions.

Group Hindrances

In group decisions, everyone’s responsibility for the consequences of decisions actually ends up as no one’s responsibility. This absence of direct and individual responsibility may also embolden the members to make risky and even reckless decisions. Group members may hesitate to challenge bad ideas just to avoid conflicts and preserve unity.

Psychological Bias

Bias in decision making may mean an unfair assessment of alternatives by managers as a result of their systematic favouritism. Managerial decisions are generally influenced by a number of unconscious common biases. These biases eventually affect the objectivity and rationality of the decision-making process. Some of these biases are as follows:

1. Framing bias—This bias occurs when managers are influenced by the way problems are presented to them. They may make different decisions for similar problems depending upon the manner in which the problem is presented. For instance, managers can be more influenced by positive projection of the problems than by negative projection of the same. While describing the viability of the project, a positive description of 40 per cent chance of success may appear to be more appealing to the decision maker than a negative description of 60 per cent chance of failure.
2. Availability bias—This bias happens when managers are inclined to overemphasize more recent information and underestimate the relevance of the events of distant past. This bias may distort managers’ opinion on various alternatives and affect the objectivity of the decision-making exercise. For instance, in performance evaluation, managers may provide undue importance to the recent performances of the employees in their decision.
3. Discount-the-feature bias—This bias refers to managers’ tendency to attach undue importance to the short-term cost and benefits of a decision. This bias may result in the negligence of long-term perspectives of the decisions. For instance, managers’ decision to postpone the overhauling of machinery may avoid any immediate work schedule disturbances. However, it may cause machinery breakdown and substantial production loss at a later stage.
4. Overconfidence bias—This bias arises when managers overestimate their predictive and decision-making abilities. This bias is more pronounced at times when managers work in unfamiliar areas with little or no previous knowledge. This bias may lead to managers making riskier decisions when the outcome is hardly predictable.
5. Anchoring bias—This bias occurs when managers are unduly influenced by their first impression of something in decision making. As a result, they may be tempted to overlook or underestimate the subsequent developments. For instance, managers may be unduly influenced by the initial response of the candidates to their questions at employee selection interviews.
6. Decision escalation bias—This is also called a sunk cost bias. A poor initial decision or misjudgement usually makes managers nervous about the decision failure. In such situations, managers may attempt to over-allocate resources to save the decision even if it has a very high failure prospect. This may happen when the causes of decision failure are serious and managers are unprepared for it.
7. Hindsight bias—The essence of this bias is the thought, “I knew that was going to happen.” In this bias, managers usually overstate their ability to predict the outcome of an event or decision even after the actual outcome is known. They have the tendency to view future occurrences as more predictable than they really are.
8. Self-serving bias—This bias arises due to the human desire to be always successful. People have the habit of identifying themselves with success while blaming others for failure. Similarly, managers have a tendency to take credit for doing well and evade responsibility for any decision failure.
9. Representation bias—When managers evaluate the alternatives, they may be willing to recall a past incident or experience that appears similar to the present problem situation. In this bias, the present decision of managers would be guided more by their past experience than by the reality of the present decision-making situation.

Decision Tree

A decision tree, in simple terms, is a graphical representation of different alternatives for a sequence of events of a multistage decision problem. While evaluating the alternatives, managers can adopt the decision tree technique for effective decision-making. Decision tree is an ideal analytical tool to decision making, especially when the decisions are risky or costly. A decision tree can help managers choose between two or more alternative strategies. It enables the managers to develop a visual image of their options and also illustrate the possible outcome of each option, if adopted. This method employs a graphic called decision tree with branches representing competing alternative strategies. This schematic diagram helps managers to draw up the complex sequences of decisions and strategy alternatives.

The decision tree normally consists of small circles (called nodes) and connecting branches. These nodes represent decision points and the connecting branches stand for each possible alternative related to the node to which it is connected. After graphing the decision points and possible alternatives, managers should estimate the expected value of each decision based on the probability. Once the benefits, expected values and probability for each decision alternatives are ascertained, managers can analyse the decision tree and choose the best possible alternative as decision.

The decision tree depicted in Figure 5.3 shows the problems and alternative strategies of a HR manager engaged in wage negotiation with the trade union that demands a 15 per cent pay hike. To start with, the HR manager has two competing alternative strategies of either accepting or rejecting the demand of the union. The acceptance of demand means 3 per cent additional expenditure for the firm and the rejection of demand may lead to two possibilities. The union may or may not resort to strike (figures in parenthesis indicate the probability). If the union does not resort to strike, the firm will incur an additional recurring expenditure of 2 per cent only. In the eventuality of the union giving a strike call, there are two other possibilities. The strike may or may not succeed. If the strike succeeds, the firm may suffer a production loss due to strike, besides incurring a 3 per cent additional recurring expenditure. In the event of strike dissipating, the firm may suffer a production loss for the strike period but an additional recurring expenditure of just 2 per cent. Such graphical depiction of the strategies may help the manager to better understand the expected cost, benefit and probability of occurrence of each possibility, while evaluating them and choosing the best course of action.

Group Decision Making—An Overview

A group is a collection of two or more individuals who are connected by social relations and common objectives. Group decision making may be defined as “the process of arriving at a judgement based on the feedback of multiple individuals.”³⁰ Managers often prefer group decisions to individual decisions for solving non-routine and weighty problems. For instance, group decision is normally suitable for problems that are complex, novel or important. This is because groups are generally better at selection, evaluation and estimation of alternatives and in problem solving.³¹ While consulting others, managers can also gain different viewpoints of the same problem. These viewpoints can in turn facilitate the development of many alternatives and also the selection of the best choice. Similarly, group decision making is more effective in detecting judgemental errors and faulty interferences about the problems and also in generating more correct solutions.³²

In most group decision making, two interrelated elements strongly determine the efficiency of the process. They are as follows:

• Social elements—It deals with the interpersonal dimensions of a group. The effectiveness of social elements in a group is known through group cohesiveness and conflict management.
• Technical elements—This element relates to the functional aspects of the group. The effectiveness of technical elements is decided by the kind of logic, structure and model adopted by the group in the decision-making process.

Managers can use any group decision-making process that they find appropriate for the decision situation. In general, there are four major types of group decision processes available.³³ They are as follows:

• Consultative decision making—Managers make the decision after discussing the problems and possible solutions with the group members.
• Democratic decision making—Managers, together with members, discuss the problem and jointly make the decision. Usually, the opinion of the majority members becomes the decision of the group.
• Consensus decision making—Managers and group members jointly discuss the problem and the probable solution. Finally, a decision is reached only after all the members agree on a specific course of action.
• Delegative decision making—Managers delegate the decision making to the group or to a sub-group. Managers normally provide the guidelines for problem analysis and decision making.

Decision making is of utmost importance for effective management of an organization. Making the right decision must become the habit of managers. To be successful, they must continuously enhance their decision-making skill and remain alert to environmental changes.

Decision Support System

A decision support system (DSS) is an interactive software-based model for making business and organizational decisions. The DSS may be defined as “interactive computer based systems that help people use computer communications, data, documents, knowledge, and models to solve problems and make decisions.”³⁴ The DSS is useful to higher-level managers for simulating the problem situations as a part of the decision-making process. The DSS can be effectively used for solving unstructured, semi-structured and structured problems. However, the DSS can only support decision makers and not replace them.

The DSS has four sub-systems and they work together to provide decision- making support. They are: (i) language system, (ii) presentation system, (iii) knowledge system and (iv) problem-processing system.³⁵ Based on the functions performed, the DSS can be classified into five models. They are as follows:

1. Communication-driven DSS—The focus of this model is to facilitate faster communication and effective information sharing among the members of a group. This model is helpful for developing a series of decision options to establish a solution and for promoting consensus form of decision making. The tools used for this type of DSS model are e-mails, bulletin board system and electronic meeting system, including web conferencing. This group-based model can work both in office and web environments.
2. Data-driven DSS—The focus of this model is on the manipulation of collected and structured data for problem analysis, alternatives generation and decision-making. It facilitates faster and efficient access to a large data. In this regard, internal as well as external data are gathered and arranged on a sequential basis (called time series) to aid in decision making. Daily sales records, annual budget information and periodic inventory levels are a few examples of this model
3. Document-driven DSS—The emphasis of this model is on the effective management and manipulation of unstructured information. It supports decision-makers in converting unsorted documents into useful business data. These documents may be available in the form of text documents, spreadsheets and other database records. A classic example of this model is the internet search engines, which can sort huge volume of unstructured internet data and present them as useful information to decision makers.
4. Knowledge-driven DSS—The focus of this model is on making timely suggestions to the decision makers. Here, knowledge refers to the business rules, regulations and procedures stored in computers and used to make decisions. Knowledge looks for a certain pattern in the large volume of data and alerts decision makers when the expected pattern is detected. The system generating timely recommendations to stock market investors in the form of “buy,” “sell,” “stop loss,” are examples of knowledge-driven DSS.
5. Model-driven DSS—This model focuses on the development and manipulation of quantitative models to help decision makers in effective decision making. Decision makers can make use of statistical, financial and simulation models for the decision-making process. This model uses the data and parameters provided by a decision maker to generate alternatives, evaluate and interpret the alternatives, and choose suitable alternatives.

There is a growing dependence on the DSS by managers due to its indispensable role in the present decision environment. It helps managers in several ways. For instance, the DSS helps managers to handle even complex situations with ease. This is possible, as the DSS makes available necessary quantitative models, adequate data storage, faster communication and easier access to large volumes of data. Consequently, it can help managers in enhancing decision quality and limiting time and cost requirements in decision making.

Summary

1. Managerial decision making is the process of identifying the best solution to an organizational problem after due consideration of all possible solutions.
2. Some characteristics of managerial decisions are: future-oriented, choice-based, inbuilt uncertainty and risk, goal fulfilment, intangibility and analytical approach.
3. Kinds of decision-making environments are: (i) decision environment under certainty, (ii) decision environment under risk and (iii) decision environment under uncertainty. Strategies for decision making under different environments are: optimizing, satisficing, maximax and maximin.
4. Organizational problems can be classified into: (i) structured problems, (ii) semi-structured problems and (iii) unstructured problems. Different types of decisions available for solving organizational problems are (i) programmed decisions and (ii) non-programmed decisions.
5. A decision-making style can be defined as a habitual pattern that individuals adopt in decision making. Managers can adopt: (i) rational style, (ii) avoidant style, (iii) dependent style and/ or (iv) intuitive style for decision making.
6. Steps in rational decision-making process are: (i) recognizing the problem and its cause, (ii) determining the decision objectives and criteria, (iii) developing alternatives, (iv) evaluating the alternatives, (v) making decision, (vi) implementing the decision and (vii) enabling feedback and follow-up.
7. Factors influencing the decision-making process can be classified into external and internal factors. External factors are the nature of environment, availability of time and sufficiency of resources. Internal factors include physical and emotional states, personal value, philosophy and attitude, knowledge, skill and ability (KSA).
8. Challenges to effective decision making are bounded rationality, fear of failure, misaligned priorities, information overload, absence of creativity, group hindrances and psychological bias.
9. Psychological bias includes framing bias, availability bias, discount-the-feature bias, overconfidence bias, anchoring bias, decision escalation bias, hindsight bias, self-serving bias and representation bias.
10. Group decision making may be defined as the process of arriving at a judgement based on the feedback of multiple individuals.
11. The decision support system may be defined as an interactive computer-based system that helps people use computer communications, data, documents, knowledge and models to solve problems and make decisions.

Review Questions

Short-answer questions

1. What do you mean by the term decision making?
2. State the characteristics of managerial decision making.
3. Explain the different decision-making environments with examples.
4. Write short notes on: (a) optimizing and (b) satisficing.
5. Give brief accounts of: (a) maximax and (b) maximin.
6. What do you mean by group decision making?
7. What are the four important types of group decision-making processes?
8. What do you mean by decision support system (DSS)?

Essay-type questions

1. Examine the different types of organizational problems faced by managers. State the types of decisions required for solving them.
2. Critically evaluate the different types of decision-making styles adopted by managers in organizations.
3. Describe in detail the steps in the decision-making process with relevant examples.
4. State vividly the important group decision-making techniques available to managers.
5. Enumerate the factors influencing the decision-making process in organizations.
6. Trace the challenges to effective decision making in organizations.
7. Identify the common biases that normally affect managerial decisions.
8. Decision making is at the heart of planning. Discuss.
9. Decision making is an inevitable function of management. In light of this statement, elucidate the importance of decision making.
10. Distinguish between programmed decision-making and non-programmed decision making.
11. Discuss in detail the five models of the decision support system.
12. Explain the characteristics of each of the four decision styles advocated by Rowe and Mason.

Case Study

Can HR be a Competitive Advantage?

Rakish Iron and Steel Company is a significant player in the iron and steel industry. The company has a workforce of 18,000. With a 21 per cent market share at the national level, it occupies the fourth position in the industry. The company set for itself an ambitious target of securing the third position in three years, the second position in seven years, and industry leadership in ten years. The management of Rakish announced a major change in the business strategy of the company that would lead to the transformation of business operations. Incidentally, it prepared a blueprint for the company and chose product differentiation as its primary strategy for the future.

It identified a few segments in the market like the low-value steel market where the competition was negligible. It decided to expand its product line with a focus on the consumers of these low-value products.

Pursuing this strategy the management announced a slew of measures aimed at enhancing the width of the product line by adding a few more varieties to it. It made a huge investment commitment in the infrastructure for producing low-value steel. Within a remarkable short span of time it introduces new products to cater to the market demand for low-value products. The market responded favourably to its new product and turnover and profit rose appreciably. However, the competing companies understood the game plan of Rakish quickly and reacted by expanding their product line too. The advantage enjoyed by Rakish turned out to be a short-lived one and the major players once again began to dominate the market.

Once the product differentiation efforts failed the man agreement of Rakish changed its strategy and adopted a low-cost strategy. This required the organization to be aggressive in sales promotion measures and diligent in cost reduction in fields like marketing, advertising, distribution and services. The cost reduction measures could not help the company for two reasons.

One, the cost of marketing did not have a significant influence on the price tag of the product. And two, the cost reduction efforts had a negative fall-out on sales promotion and also on the actual sales performance. Eventually, the company was forced to abandon its low-cost strategy endeavours.

When the company was almost clueless about its future strategies to accomplish the performance goals, Mr. Rajesh Sharma joined the board as the HR Director of the company. Learning about the ill-fated strategy initiatives of the company he made a proposal to develop the work-force of the company as a competitive advantage in the market. The board of directors greeted the proposal with suspicion and contempt.

They could not believe that the employees could be developed into a formidable force for the organization through proper HR measures, and that in due course this would lead to cost reduction and quality enhancement. However, having no worthwhile alternative schemes, they set aside their reservations and approved the HR director’s proposal. Simultaneously, the directors allowed a huge budgetary support for drastically improving the training infrastructure and the compensation packages. The HR director’s proposal began to take shape and the management kept its fingers crossed.

Question:

1. What could have been the reason for the failure of the earlier strategies of Rakish?
2. How do you foresee the future of Mr. Rajesh Sharma’s proposal in the light of the competition faced by the company?
3. What would your proposal have been if you had been the HR Director of the company?

Note: The solution for the above case is available at www.pearsoned.co.in/duraipom2e

References

1. Victor H. Vroom and Philip W. Yetton, Leadership and Decision Making (Pittsburgh, PA: University of Pittsburgh Press, 1973).
2. James A. Stoner, R. Edward Freeman, and Daniel R. Gilbert, Jr., Management, 6th ed. (New Delhi: Pearson Education, 2009), p. 265.
3. Thomas N. Duening and John M. Ivancevich, Management: Principles and Guidelines (New Delhi: Bizantra Education, 2003), p.159.
4. Robert Kreitner, Management, 10th ed. (Boston, MA: Cengage Learning, 2006), p. 215.
5. R. J. Sternberg, Successful Intelligence: How Practical and Creative Intelligence Determine Success in Life (New York: Simon & Schuster, 1996), p. 47.
6. J. R. Schermerhor, J. G. Hunt, and R. S. Osborn, Organizational Behavior (New Delhi: Wiley-India, 2006), pp. 318−319.
7. Dorothy F. Olshfski and Robert B. Cunningham, Agendas and Decisions: How State Government Executives and Middle Managers Make and Administer Policy (NY: State University of New York Press, 2008), pp. 15−17.
8. George Edward Monahan, Management Decision Making: Spreadsheet Modeling, Analysis, and Application, Vol. I. (Cambridge, UK: Cambridge University Press, pp. 420−421).
9. Herbert A. Simon, The New Science of Management Decision, Revised ed. (Englewood Cliffs, NJ: Prentice Hall, 1977), pp. 45−9.
10. M. J. Driver, “Individual Decision-Making and Creativity” in S. Kerr, ed., Organizational Behavior (Columbus, OH: Grid Publishing Inc., 1979), pp. 59−91.
11. S. G. Scott and R. A. Bruce, “Decision-Making Style: The Development and Assessment of a New Measure,” Educational and Psychological Measurement (1995), 55(5): 818−31.
12. H. A. Simon, “Making Management Decisions: The Role of Intuition and Emotion,” Academy of Management Executive (1987), (1): pp. 57−64.
13. S. D. Phillips, N. J. Pazienza, and D. J. Walsh, “Decision Making Styles and Progress in Occupational Decision Making,” Journal of Vocational Behaviour (1984), 25: 96−105.
14. E. Dane and M. G. Pratt, “Exploring Intuition and its Role in Managerial Decision Making,” Academy of Management Review (2007), 32: 33−54.
15. Angelo Kinicki and Robert Kreitner, Organizational Behaviour: Key Concepts, Skills and Best Practices (New Delhi: Tata McGraw-Hill Education, 2009), p. 254.
16. A. J. Rowe and R. O. Mason, Managing with Style: A Guide to Understanding, Assessing, and Improving Decision Making (San Francisco, CA: Jossey Bass, 1987), pp. 1−17.
17. Angelo Kinicki and Robert Kreitner, Organizational Behaviour: Key Concepts, Skills and Best Practices (New Delhi: Tata McGraw-Hill Education, 2009), p. 256.
18. W. E. Pounds, “The Process of Problem Finding,” Industrial Management Review (1969): 1−19.
19. R. J. Volkema, “Problem Formulation: Its Portrayal in the Texts,” Organizational Behaviour Teaching Review, 11(3): 113−26.
20. P. Heppner, G. Neal, and L. Larson, “Problem-Solving: Training as Prevention with College Students,” Personnel and Guidance Journal (1984), 62: 514−9.
21. Jos Timmermans, Purposive Interaction in Multi-Actor Decision Making: Operationalizing Coleman’s Linear System of Action for Policy Decision Support (HJ Delft, Netherlands: Eburon Academic Publishers, 2004).
22. W. Huitt, “Problem Solving and Decision Making: Consideration of Individual Differences Using the Myers–Briggs Type Indicator,” Journal of Psychological Type (1992), 24: 33−44.
23. N. Frederiksen, “Implications of Cognitive Theory for Instruction in Problem Solving,” Review of Educational Research (1984), 54: 363−407.
24. American Planning Association, Planning and Urban Design Standards (NJ: John Wiley & Sons, 2006), pp. 543−5.
25. J. L. Moreno, Who Shall Survive? (New York: Beacon House, 1953).
26. Russell L. Ackoff, “Science in the System Age: Beyond IE, OR, and MS,” Operation Research (1973), 21: 664.
27. Herbert Simon, The Sciences of the Artificial (Cambridge: MIT Press, 1969).
28. Angelo Kinicki and Robert Kreitner, Organizational Behaviour: Key Concepts, Skills and Best Practices (New Delhi: Tata McGraw-Hill, 2009), p. 256.
29. J. Jacoby, D. E. Speller, and C. K. Berning, “Brand Choice Behaviour as a Function of Information Overload,” Journal of Marketing Research, 11: 63−9.
30. Nancy Borkowski, Organizational Behaviour in Health Care, 2nd ed. (Sudbury, MA: Jones & Bartlett Learning, 2010), p. 332.
31. G. Stasser and B. Dietz-Uhler, “Collective Choice, Judgement and Problem Solving,” in M. A. Hogg & R. S. Tindale, eds, Blackwell Handbook of Social Psychology, Vol. 4 (Oxford, UK: Blackwell, 2001).
32. Donelson R. Forsyth, Group Dynamics, 5th ed. (Belmont, CA: Cengage Learning, 2009), pp. 315−6.
33. V. H. Vroom and A. G. Jago, The New Leadership: Managing Participation in Organizations (Upper Saddle River, NJ: Prentice Hall, 1988).
34. Roger M. Schwarz, The Skilled Facilitator: A Comprehensive Resource for Consultants, Facilitators, Managers, Trainers, and Coaches (San Francisco, CA: Jossey Bass, 2002), pp. 132−3.
35. Daniel J. Power, Decision Support Systems: Concepts and Resources for Managers (Westport, CT: Greenwood Publishing, 2002), pp. 1−2.
36. R. H. Bonczek, C. W. Holsapple, and A. B. Whinston, Foundations of Decision Support System (New York: Academic Press, 1981).
37. http://www.expressindia.com (last accessed in May 2014).
38. http://www.biocon.com (last accessed in May 2014).