Topic # 5

What factors do you think differentiate good decision makers from poor
ones? Relate your answer to the six step rational model.

What is Decision Making?

Decision making can be regarded as an outcome of mental processes (cognitive process)

leading to the selection of a course of action among several alternatives. Every decision
making process produces a final choice. The output can be an action or an opinion of
choice.

What is Decision Taking?

Your success as a manager primarily rests on one single factor. The key factor in your
managerial success is the ability to take decisions, quickly and effectively. The fine art
and science of decision making will decide how far and fast you will travel in the
managerial ladder. The choices you make will have long term impact in your business and
career.

Decision making is not the ability to take the best guesses and works on strong hunches as
some management guru's make it out. Gut feel and instinctive decision making may
sometimes be inspiring and work well but it is best for the professional manager to keep
away from this kind of decision making.

How does one take decisions? Here is a five point checklist to take better decisions.

1. Information

Best decisions are of course made with the availability of quality information. Check
whether you have all possible information and data available in the area where a decision
is required. But don't take too much time to gather the information. Sometimes it may
help if you take timely decisions with all available information rather than procrastinating
on the basis of unavailability of complete information.

2. Defining the outcomes of the decision

What are the desired results from the decision? It is best to define the outcomes from the
decision making process and take decisions which would best give the desired results.

3. Worst and best case scenario

When in doubt better to arrive at the worst case scenario and prepare for the worst case
scenario if things go wrong as a result of your decisions.

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4. Seek Counsel

Sometimes when you agonize over the outcomes of the decisions and unable to take a
proper decision it is best to seek counsel from more experienced persons in your
organization or industry. It may even be helpful sometimes take the counsel of people
totally unrelated to situation. It may even be a friend or your spouse. One would be
surprised at the creative solutions such people offer.

5. Take the decision even if undecided

Decision making methodologies can be evolved based on the 5 simple tenets outlined
above. Time is a key element in the decision process. More opportunities are missed for
want of a decision rather than wrong decisions. Keep these factors as a checklist and refer
to them whenever you want to take any decision.

Decision making skills and techniques

We use our decision making skills to solve problems by selecting one course of action
from several possible alternatives. Decision making skills are also a key component of
time management skills.

Decision making can be hard. Almost any decision involves some conflicts or
dissatisfaction. The difficult part is to pick one solution where the positive outcome can
outweigh possible losses. Avoiding decisions often seems easier. Yet, making your own
decisions and accepting the consequences is the only way to stay in control of your time,
your success, and your life. If you want to learn more on how to make a decision, here are
some decision making tips to get you started.

A significant part of decision making skills is in knowing and practicing good decision
making techniques. One of the most practical decision making techniques can be
summarized in those simple decision making steps:

• Identify the purpose of your decision. What is exactly the problem to be solved?
Why it should be solved?

• Gather information. What factors does the problem involve?

• Identify the principles to judge the alternatives. What standards and judgement
criteria should the solution meet?

• Brainstorm and list different possible choices. Generate ideas for possible
solutions.

• Evaluate each choice in terms of its consequences. Use your standards and
judgement criteria to determine the cons and pros of each alternative.

• Determine the best alternative. This is much easier after you go through the
above preparation steps.

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 • Put the decision into action. Transform your decision into specific plan of
action steps. Execute your plan.

• Evaluate the outcome of your decision and action steps. What lessons can be
learnt? This is an important step for further development of your decision making
skills and judgement.

Final remark. In everyday life we often have to make decisions fast, without enough
time to systematically go through the above action and thinking steps. In such situations
the most effective decision making strategy is to keep an eye on your goals and then let
your intuition suggest you the right choice.

6 Steps to Decision Making Process

Decision making is usually defined as the act of making up your mind about something.
However, the process of decision making is not as easy as it sounds. There are certain
important decisions that you have to make that have the ability to change the course of
your life. Even at a work place, one is confronted with problems or dilemmas, where the
solutions that one has to find should cater to the need of others around you. Such
decisions have to be made in a careful way, especially if it is going to affect you
monetarily, or if it is going to bring major changes in your life. Thus, it is important to
take decisions in a systematic way, so that the decision you make has high chances of
being successful. The article here discusses the 6 steps to decision making process, that
can help in clarifying certain things in your mind before you take the final decision. These
steps also will also help enhance your decision making skills for different types of
decision making.

How to Make a Decision in Six Steps

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Defining the Problem: The first step towards a decision making process is to define the
problem. Obviously, there would be no need to make a decision without having a
problem. So, the first thing one has to do is to state the underlying problem that has to be
solved. You also have to clearly state the outcome or goal that you desire after you have
made the decision. This is a good way to start, because stating your goals would help you
in clarifying your thoughts.

Develop Alternatives: The situation of making a decision arises because there are many
alternatives available for it. Hence, the next step after defining the main problem would be
to state out the alternatives available for that particular situation. Here, you do not have to
restrict yourself to think about the very obvious options, rather you can use your creative
skills and come out with alternatives that may look a little irrelevant. This is important
because sometimes solutions can come out from these out-of-the-box ideas. You would
also have to do adequate research to come up with the necessary facts that would aid in
solving the problem.

Evaluate the Alternatives: This can be said to be the one of the most important stages of
the decision making process. This is the stage where you have to analyze each alternative
you have come up with. You have to find out the advantages and disadvantages of each
option. This can be done as per the research you have done on that particular alternative.
At this stage, you can also filter out the options that you think are impossible or do not
serve your purpose.
Make the Decision: This is the stage where the hard work you have put in analyzing
would lead to. The evaluation process would help you in looking at the available options
clearly and you have to pick which you think is the most applicable. You can also club
some of the alternatives to come out with a better solution instead of just picking out any
one of them.

Implement the Solution: The next obvious step after choosing an option would be
implementing the solution. Just making the decision would not give the result one wants.
Rather, you have to carry out on the decision you have made. This is a very crucial step
because all the people involved in the implementation of a solution should know about the
implications of making the decision. This is very essential for the decision to give
successful results.

Monitor your Solution: Just making the decision and implementing it is not the end of
the decision making process, it is very important to monitor your decision regularly. At
this stage, you have to keep a close eye on the progress of the solution taken and also
whether it has led to the results you expected

Different Types of Decision Making

The following are the most common types of decision making styles that a manager in a
business or even a common man might have to follow.

Irreversible: These decisions are permanent. Once taken, they can't be undone. The
effects of these decisions can be felt for a long time to come. Such decisions are taken
when there is no other option.

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Reversible: Reversible decisions are not final and binding. In fact, they can be changed
entirely at any point of time. It allows one to acknowledge mistakes and fresh decisions
can be taken depending upon the new circumstances.

Delayed: Such decisions are put on hold until the decision maker thinks that the right
time has come. The wait might make one miss the right opportunity that can cause some
loss, specially in the case of businesses. However, such decisions give one enough time to
collect all information required and to organize all the factors in the correct way.

Quick Decisions: These decisions enable one to make maximum of the opportunity
available at hand. However, only a good decision maker can take decisions that are
instantaneous as well as correct. In order to be able to take the right decision within a
short span of time, one should also take the long-term results into consideration.

Experimental: One of the different types of decision making is the experimental type in
which the final decision cannot be taken until the preliminary results appear and are
positive. This approach is used when one is sure of the final destination but is not
convinced of the course to be taken.

Trial and Error: This approach involves trying out a certain course of action. If the
result is positive it is followed further, if not, then a fresh course is adopted. Such a trail
and error method is continued until the decision maker finally arrives at a course of action
that convinces him of success. This allows a manager to change and adjust his plans until
the final commitment is made.

Conditional: Conditional decisions allow an individual to keep all his options open. He
sticks to one decision so long as the circumstances remain the same. Once the competitor
makes a new move, conditional decisions allow a person to take up a different course of
action.

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 PRACTICAL STUDY OG THE ORGANIZATION:-

GROUPS HOISTORY
In 1968, the Dewan Family, under the leadership of Dewan Mohammad Umer Farooqui,
ably supported by his younger brother, Dewan Salman Farooqui, decided to enter the
industrial arena.

The first industrial unit was set up in 1970 under the name and style of Dewan Textile
Mills Limited with a capacity of 25,080 spindles which has since been increased to
61,704 spindles. The Group strengthened its footing in the textile field by taking over
another textile unit in 1975, now known as Dewan Mushtaq Textile Mills Limited with an
installed capacity of 25,776 spindles. Thereafter, the Group established another spinning
unit Dewan Khalid Textile Mills Limited, consisting of 26,624 spindles.

By mid of 1980's, the Group with its characteristics of honesty, integrity and
determination, became one of the major textile groups in the country. At this stage, the
Group decided to diversify its activities to other spheres and entered the sugar industry. In
1987, the Group

established Dewan Sugar Mills Limited with a sugar cane crushing capacity of 3,500
metric tons/day which has been gradually expanded to 9,000 metric tons/day, thus making
it one of the largest sugar plants of the country. The Mills obtained ISO Certification in
1998.

The Group further diversified its range of business by setting up capital-intensive

polyester staple fibre plant under the name and style of Dewan Salman Fibre Limited. The
Group's credibility is evident from the fact that Dewan Group was able to obtain the
collaboration with the world's giant conglomerates like Mitsubishi Corporation of Japan
and Sam Yang Company Limited, Republic of Korea and set up the state-of-the-art plant
in 1990.

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The Company signed an agreement with Messrs Noyvallesina Engineering, an Italian
company, for establishing an Acrylic Fibre and Tow Plant as part of its expansion plan.
The Acrylic Plant with an installed total capacity of 55,000 tons per annum commenced
commercial production operations from 1st July, 2000. In the first phase, the Acrylic
Plant is producing 25,000 tons acrylic fibre. In phase II, the output will be raised by
30,000 tons.

The Group manifested its decision to diversify into automobile industry of Pakistan
through the incorporation of Dewan Farooque Motors Limited on December, 1998.
Within this month, two more milestones were reached: the signing of Technical License
and Exclusive Distributor agreements with Hyundai Motor Company, Korea's No. 1 and
world's seventh largest automobile manufacturer.

1999 marked another important year in the history of the Group when Dewan Farooque
Motors signed the Technical Collaboration Agreement with Kia Motors Corporation of
South Korea, in July, 1999. Hyundai-Kia Together, are now the world's six largest
automobile manufacturers.

Dewan Farooque Motors is now a key player in the automobile industry of the country
offering an impressive line up of passenger cars and commercial vehicles. Its state-of-the-
art plant has a capacity of 10,000 vehicles per annum on single shift basis and is equipped
with the latest facilities which include CED paint system and robots for the final coat.

June, 2000, marked another important milestone in the history of the Group when its
flagship company Dewan Salman Fibre Limited, acquired Dhan Fibre Limited and fully
merged and incorporated its facilities into its operations .The total output of Dewan
Salman Fibre Limited's 3 polyester units is 700 tons per day. The company today enjoys a
market leader's position and commands market share of 60% in the country's fibre
industry…

Decision Making:-
The decision making in the Dewan Mushtaq Groups is very poor
and it is not perfect for the company. The employer of DMG take late decision.
The DMG main competitor is Bestway Cement in the way of Dewan Cement. The
Bestway cement Ltd, decision is perfect compare to DMG. They tell me that his
poor Decision making that one day we want to established new plant of cement in
selected area that time Government want money or Commission but we not do
so. We thing that the other Government of PPP we also member of that party.
The Government will be in Pakistan in after1 years, That decided we will wait for
our Government. But suddenly the other company of cement establish his plant in
that area. The name of that company is Bestway Cement. They establish there
plant and starting work. The Dewan Cement take poor decision on that time and
they going into loss day to day. Their market share is also in stock exchange is go
down. The market share price is in stock exchange is now Rs,0.60 par share. The
one of the poor Decision making of DMG Example which I discuss u.

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 Swot Analysis
STRENGTH :-

1). SAP trained employees. SAP stand for System Application Product.
2). Skilled labour and management.
3). Existing data basic and Computerized
4). Recruit Trained employees

WEAKNESS:-

1). NO Bonded employee in the Company

2). Decision making not perfect in the company
3). SAP Program not launched
3). No new program of training is introduce
4). Lack of incentive

OPPORTUNITY:-

1). Trained can be given batter incentive

2). Trained worker will provided good quality of work.
3). Increase in quality/quality of product in minimum cost.
4). Save loss of raw material while producing requisite product by the
firm.

THREATS:-

1). The Dewan Mushtaq Groups threats for his Competitors. The
main competitor of Dewan Mushtaq cement is Bestway cement.
2). Shareholders
3). Training will not conducted then the company will be in loss.
4). PEST (Political,Economical, Social and technological)
5). Imposition of different tax.
6). Law and order Situation.

Recommendation:-

1). Training facility should be available with in the firm for their worker
2). Internal training programs in the company
3). SAP (System Application Product) implement in the company
4). Surety band should be obtained form the trainee/worker while
deputing obtaining training from other institution

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CONCLUSION:-

In my opinion I propose that during recruitment process deserving and more qualified
person should be selected.
After selection initial training should be conducted to trained the new appointee.
Residential facility should be available with in the premessy of the firm.
Pick and drop facility should be available around the clock
Medical facility should be available for the employee and the depended family member
around the clock.