What are the approaches for decision making ? Explain.

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 APPROACHES TO DECISION MAKING

Managers can follow various approaches of decision making to achieve some desired goals. Decisions are the outputs of decision making process. Management experts generally have three approaches for managerial decision making which are discussed below:

1. The Classical approach: This approach of decision making is also known as prospective approach that assumes managers as logical and rational. Therefore, their decisions will be in the best interest of the organization. It tells managers how they reach in decision. This approach assumes that all problems are precisely defined and complete information is available regarding the is the related to decision. Managers have adequate skill and idea about all the alternatives with their merits and demerits. Criteria for evaluating outcomes are assumed to be known. They can receive information and support of computers for effective decision making.

2. The Administrative approach: This approach is also known as descriptive model of decision making which argues that decision makers cannot achieve complete and perfect information. They are guided by bounded rationality and tend to satisfy their interest. This approach assumes that managers may face uncertainty, ambiguity and non-programmed decision situation while making decisions. Decision makers have bounded to their rationality. It is limited by beliefs, values, attitudes, ability, skills, habits, qualifications, information and resources. This approach also explains that decisions satisfy and they tend to seek the next alternative only when one is found that meets some minimum standard of sufficiency.

3. The Rational approach: In this approach, the function of decision making is completed by step-by step process where mangers identify the best alternatives. Rational decision making process involves certain steps for effective decision making. They are generally defining the problems, widentification of the alternatives, evaluate the alternatives, selection of best alternative, implementing selected alternatives and follow up and evaluation of decision.

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