Management. DECISION MAKING Elements and process. Coordination and implementation

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1 Management DECISION MAKING Elements and process. Coordination and implementation Operační program Vzdělávání pro konkurenceschopnost Název projektu: Inovace magisterského studijního programu Fakulty ekonomiky a managementu Registrační číslo projektu: CZ.1.07/2.2.00/

2 Decision making Decision-making is a choice between several options of behavior. Decision making process can be perceived as a process of identifying problems and opportunities and resolving them. Personal (individual) decision making Managerial (organisational) decison making is associated with some discharge of an office a manager decides in behalf of his superior, his decision making is limited by his competency and power. decision is realized through his subordinates.

3 Decision making Organisational aspect Procedural aspect of decision making

4 Organisational aspect of decision making ORGANISATIONAL aspects Who will decide? What will he decide about? Organisational aspect focuses a distribution of decision-making power in the organizational structure between the various functional positions. We should take into account: Disposal of information, eligibility (qualification), the interest orientation (hobbies)

5 Organisational aspect of decision making The relationship between the management degree and character of decisionmaking: Top management STRATEGIC decisions Middle management First line management OPERATIONAL decisions

6 Organisational aspect of decision making Programmed decisions Non-programmed decisions Poorly structured Top Type of problem PROGRAMMED DECISIONS NON- PROGRAMMED DECISIONS Level in organisation Well structured Lower

7 Procedural aspect of decision making How to make a decision? Decision problem a problem with two or more alternatives of solving. Decision-making process A set of several steps that includes identifying the problem, selecting a solution and evaluating the effectiveness of the solution. 1. Identification of a decision problem 2. Problem analysis 3. Developing of alternatives 4. Evaluation of alternatives 5. Selection of an alternative 6. Implementation of decision 7. Verification of the results

8 Decision-making process 1. Identification of a decision problem Problem - a discrepancy between an existing and a desired state of affairs. Output: the definition of problem to be solved or targets to be achieved. 2. Problem analysis information about defined problem situation and their relationships, trends, the range of stakeholders Output: a set of relevant and credible information related to the problem, including the interpretation.

9 Decision-making process 3. Alternatives developping Alternative of behavior - one way to achieve the objective, one way of solving the problem. Output: finding of enough alternatives to achieve the target, or to solve the existing problem. 4. Alternatives evaluation formulating evaluation criteria Criterion - a scale by which it is possible to express the degree of fulfillment of objectives. qualitative and quantitative Output: setting the criteria

10 Decision-making process 5. Selection of one alternative determining the results of particular alternatives in terms of chosen criteria. evaluating and selecting the option that best meets the objectives of solutions. We can: Choose the best option State the order of the alternatives from the best suitable to the worst alternative. Output: selecting the best alternative(s) 6. Decision implementation 7. Verification of the results

11 Literature BENSOUSSAN, B. E., FLEISHER, C. S. Analysis without paralysis: 10 tools to make better strategic decisions. Upper Saddle River, N.J: FT Press, ISBN DUBRIN, A. J. Essentials of management. 7th ed. Mason, OH: Thomson/South- Western, c2006. ISBN FLEISHER, C. S. a B. E. BENSOUSSAN. Strategic and competitive analysis: methods and techniques for analyzing business competition. Upper Saddle River, N.J.: Prentice Hall, c2003. ISBN MARTIN, J. T. Strategic management. 6th ed. Andover: Cengage Learning, ISBN

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