The important techniques of decision making are as follows :-
(1)
Experience or Judgment: In this technique, a manager makes decision on the
basis of his knowledge and experience gained through working in a particular
position over the years
(2)
Intution : Intution or hunch is a knowledge based on instant inner feelings or
spiritual perception rather than reasoning. It is based on faith.
(3)
Habbits : Established habits can be used as a technique of decision making.
Managers try to solve repetitive and routine problems through their established
habits.
(4)
Standing Plans and Procedures: There are standing plans and procedures in every
organization such as policies, rules, procedures, methods etc. They all serve
as a technique for decision making.
(5)
Organization Structure: Organization structure make it clear who is responsible
for what and to whom. Therefore it can be used as a decision making technique.
(6)
Principles of Management: The principle of management can serve as a useful
guide in making decisions.
(7)
Economic and Financial Techniques: Marginal analysis, break even analysis,
utility analysis etc are some of the most important economic techniques of
decision making.
Pay
back analysis, inflow outflow analysis, ratio analysis are some of the
financial techniques of decision making.
(8)
Linear Programming: It is a mathematical technique of limited resources. It
helps in making decisions regarding allocation of limited resources among
various competing demands in an optimum way.
(9)
Game Theory: In this technique, one member chooses one such course of action
that frustrates and defeats the action of the competing member and help him in
wining the game. This technique used under competitive and conflicting
situations.
(10)
Waiting Line or Queuing Theory: This technique is used to decide problem of
waiting line in an organization with the help of the technique, manager decides
optimum rate of flow through service points by balancing the cost of making
customers wait against the cost of servicing them more rapidly.
(11)
Simulation: Simulation is a technique for studying and analyzing behaviour of a
system under several alternative conditions in an artificial setting.
(12)
Network Techniques: PERT and CPM are the techniques that helps managers in
deciding a logical sequence of activities required for completing a complex
project.
(13)
Heuristic Technique: It is an trial and error technique of finding solutions to
a complex problem by breaking it into small components.
(14)
Participative Techniques: It is a technique of making decisions with the
participation of the employees. This technique encourages industrial democracy.
Steps
in Decision Making Process:
1.
Identification of Problem
2.
Diagnosing the Problem
3.
Establishing Specific Objectives
4.
Identifying Limitations
5.
Evaluating Alternatives
6.
Selecting Appropriate Alternative
7. Implementing the Decision
8. Feedback