Date post: | 30-May-2018 |
Category: |
Documents |
Upload: | sharmakapil311 |
View: | 213 times |
Download: | 0 times |
of 19
8/9/2019 Decision Maknal Final 2
1/19
8/9/2019 Decision Maknal Final 2
2/19
An
Harvard Business Essentials
Book
By-: KAPIL SHARMAP.G.D.M. 1st Sem.
Roll No.-38
8/9/2019 Decision Maknal Final 2
3/19
What is DECISION MAKING ?
Making a choice from various alternatives in doing
something.
Structured rational decision making is an importantpart of all science-based professions, where specialists
apply their knowledge in a given area to makinginformed decisions.
8/9/2019 Decision Maknal Final 2
4/19
There are 5 simple steps to make a good Decision
1
2
3
4
5
8/9/2019 Decision Maknal Final 2
5/19
Step 1 : Identify, define and structure theproblem, issue or opportunity
y Problem: what is wanted/ expected versus the actualsituation.
y How the problem is defined determines the cause andwhere solutions/alternatives are sought
8/9/2019 Decision Maknal Final 2
6/19
y Examples: Low yields; Low income; Maize productionversus sunflower production, total mixed ration versushome mixed ration.
Questions:
o Who will make the decision?
o Are there alternative actions?
o What are sources of uncertainty?
o How much detail is needed?
8/9/2019 Decision Maknal Final 2
7/19
Questions:
o Involvement of senior management?
o Capital commitment?
o Profit potential?
o
Staff moral, training, motivation and skills?o Revocability?
o Far reaching effect of the decision?
8/9/2019 Decision Maknal Final 2
8/19
Questions:
o Is the correct criteria for evaluationo chosen?
o How is judging the outcome of the decision
o done?
o Is specialist help needed?
Keep complete view
8/9/2019 Decision Maknal Final 2
9/19
y Keep an open mind
y Explore as many ideas as possible
Questions:
o Maize or sunflower?
o Total mixed or home mixed ration?o Sell now or sell later?
o Use contract harvesting or buying own combine?
8/9/2019 Decision Maknal Final 2
10/19
Questions:
o Expected yields and prices?
o What are past prices and yields?
o Non-quantitative data?
(Make use of enterprise and total budgets)
8/9/2019 Decision Maknal Final 2
11/19
Collect information
Investigate gesture of an outcome
Get reliable information
Quantitative and qualitative information
Use enterprise budgets
8/9/2019 Decision Maknal Final 2
12/19
Examples:
y Own production of raw material, buy concentrates &mix feed
y Produce roughage, buy dairy meal & mix feedy Buy total mixed ration
Make use of the partial budget
(Additional income + expenses saved) > (Loss of income+ additional expenses)
8/9/2019 Decision Maknal Final 2
13/19
Make use of decision tree or comparison to considervarious alternatives:
Have open mind Consider many ideas
Thorough study of the farm
Probability of each uncertainty
8/9/2019 Decision Maknal Final 2
14/19
y Determine the effect of the decision on the overall farm
(Effect on NPV, repayment ability, solvability,
profitability, efficiency, security, etc)
y Change probabilities
y
If too sensitive, get more information
y Investigate & analyses cost of more info
8/9/2019 Decision Maknal Final 2
15/19
y Select the alternative that best meets the establishedgoals
Questions:
o Was the problem analyzed thoroughly?
Judgment & experience take over
8/9/2019 Decision Maknal Final 2
16/19
Entails acquiring resources, making detailed plans, constructing atimetable, and communicating plans to the employees. (Listactions in chronological order).
Activities:
y Communicate the decisiony Select personnely Explain difficulties & benefitsy Institute a training programmey Purchase equipment neededy Plan information flowy Plan phasing in the program
8/9/2019 Decision Maknal Final 2
17/19
y The final test of the decision: determines whether theproblem was fixed
y What new problems did the decision/solution create?
Activities:
y Execute physical and financial control. (Yield perhectare, liters per cow , cost per liter, gross margin per
hectare or per LSU, etc)
8/9/2019 Decision Maknal Final 2
18/19
y The decision-maker takes responsibility for the
decision, but the owner will always take accountability.
8/9/2019 Decision Maknal Final 2
19/19
Agood manager learns to recognize when an
issue or problem deserves the time that he
gives it; a hastily made correct decision on thewrong question is time badly used. Judgment
is a key ingredient in the decision-making
process (Giles & Stanfield, 1990)
The more experience a farmer (decision-maker)has, the less time he will need in most cases
to make a decision