Decision Making Styles - Principle of Management Notes

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Decision Making Styles

Decision making styles:

Behavioral Aspects of Decision making (Decision making styles) [source Robinson’s book]

How a manager decides in an organization determines the organization’s future. The way of taking decision varies with manager behaviour or style. Managers’ decision making styles differ along two dimensions viz. individual way of thinking and tolerance for ambiguity.

individual way of thinking and tolerance for ambiguity.

  1. Directive Style: Decision makers using directive style have low tolerance for ambiguity and are rational in their way of thinking. They are efficient and logical. Directive types make fast decisions and focus on the short run. Their efficiency and speed in making decisions often result in their making decision with minimal information and assessing few alternatives.
  2. Analytic style: Decision makers with an analytic style have much greater tolerance for ambiguity than do directive type. They want more information before making a decision and consider more alternatives than a directive decision maker does. Analytic decision makers are characterized as careful decision makers with the ability to adapt with unique situations.
  3. Conceptual style: Individual with a conceptual style tends to be very broad in their outlook and look at many alternatives. They focus on the long run and are very good at finding creative solutions to problems.
  4. Behavioural Style: Decision makers with a behaviour style work well with others. They are concerned about the achievements of those around them and are receptive to suggestions from others. They often use meeting to communicate, although they try to avoid conflict. Acceptance by others is important to this decision making style.

Although these four decision making styles are distinct, most mangers have characteristics of more than one style. It’s probably more realistic to think of a manger’s dominant style and alternative style.

Decision making style as per leader:

The way of decision making is different in different circumstances by the same individual. In other words, style of decision making would differ as the situation changes. There are five most common styles of making decisions they are as follows:

A. Autocratic:

  1. Style I: The manger solves the problems or makes the decisions himself/herself by using information available to him/her at that time.
  2. Style II: The manager obtains the necessary information from him/her sub-ordinates and then decides on the situations to the problems himself/herself.

B. Consultative:

  1. Style III: The manger shows the problem with relevant subordinates individually, getting their ideas and suggestions without bringing them together as a group. The decision may or may not reflect his/her sub-ordinates influences.
  2. Style IV: The manger shares the problem with his/her subordinates as a group, collectively obtaining their ideas and suggestions. The decision may or may not reflect his/her sub- ordinates influences.

C. Group Processes:

  1. Style V: The manger shares the problem with his/her sub-ordinates as a group. Together he/she generates and evaluates alternatives and attempts to reach agreement (consensus). Manager accepts and implements solution that has the support of the entire group.

Decision making under condition of certainty and uncertainty:

Decision making takes place under different conditions. These conditions are grouped into three categories. They are as follows:

  1. Condition of certainty: A state of certainty exists only when mangers know the available alternatives as well as the conditions and consequences of those actions. E.g. to buy a vehicle, organization can collect all the information related to vehicle and buy it after comparing the specification of vehicle and the need of the organization. Thus, it is simple and easy to take decision under condition of certainty.
  2. Condition of risk: A state of risk exists when the manger is aware of all alternatives, but is unaware of the consequences. In other words, risk exists when the probability of an action being less than 100 percent. Certain degree of risk is always associated under this condition of decision making.
  3. Condition of uncertainty: Uncertainty means that mangers do not have enough information about the environment to understand or predict the future. Under condition of uncertainty, little is known about the alternative or their outcomes. This situation arises when the level of ambiguity is higher at the time of making decision. The decision maker should use his/her intuition, judgment and experience in making decisions under condition of uncertainty.

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