In this session, we will be discussing why decision-making is important for any business organization, and also discussing how to make decisions in any business organization, decision-making conditions, and which three conditions do decision-makers face? decision making under certainty, decision making under risk, decision making under uncertainty.
Why is decision-making important for any business organization?
In the world a lot of different kinds of business organizations. Of those businesses, organizations have 85% are facing failure, and 15% of business organizations are facing success.
If you don’t believe then you may check out the history of the business organization. Most business organizations are going to face failure.
So, I want to ask you Why those business organizations are facing failure, and I am sure you don’t know, so don’t worry I am here.
These all-business organizations are facing failure because they don’t make good decisions.
Yes, decision-making is one of the most roles displayed in business organizations.
So, in this session, we will discuss, in any business organization the manager how to make decisions, and Which three conditions do decision-makers face?
What is decision-making?
The success and the failure of the business organization are depending on the decision-making. So, Decision making is one of the most critical roles displayed in the business organization.
For example, If the organizational managers are making the decision in the right way, then the business organization faces success because the managers are known the decision-making condition, and the managers don’t know the decision-making condition then the business organization is facing failure.
So, here we are discussing Which three conditions do decision-makers face?
Which three conditions do decision-makers face?
In any kind of business organization, the managers have to make hundreds of day-to-day decisions but those decisions are in the right way or wrong way, they don’t know if they haven’t known about the decision-making condition.
Most managers have little information about the decision-making condition. Decision-making condition informs you, which decision is the best for the past, future, and present.
So here we are going to discuss 3 types of decision-making conditions, which are most important when the decision-makers are making decisions. These decision-making conditions are certainty, risk and the last is uncertainty.
What is the condition of Certainty?
Certainty is the first decision-making condition when the organizational manager makes decisions. so, let’s discuss deeply the condition of certainty. the condition of certainty defines the whole information about the organization, which is best for the present or future.
The certainty with which we can predict the future has led to the assumption that decisions are best made when we are certain about the answer.
The predictions we can make about the future are very good at capturing the range of possible outcomes, but they lack the fine details that allow us to make decisions at the moment.
Decision Making Under Certainty Examples
For example, if you want to buy a new car, you might be able to accurately predict the kind of car you want and the price you are willing to pay, but you won’t know exactly what car dealer to visit or what the final price will be.
In this situation, the ability to predict the future isn’t enough to allow you to make a decision at the moment.
Decision Making Under Conditions of Risk
Risk is the second decision-making condition when the organizational manager makes decisions. so, let’s discuss deeply the condition of risk.
Decision-making under risk is a branch of decision-making that focuses on the evaluation of options and their associated probabilities and consequences.
Decision-making under risk is often required in situations where the outcomes of different choices may vary in their magnitude, but not in their likelihood.
Decision Making Under Risk Examples
For example, the decisions faced by a climatologist who must select the best short-term weather forecast model to use in a particular location may be considered decision making under risk.
This decision may be based on a number of factors such as the forecast model’s inherent accuracy, the model’s sensitivity to the area’s specific conditions, the time required to prepare the forecast, and the forecast’s marketability.
Decision Making Under Conditions of Uncertainty
Uncertainty is the last decision-making condition when the organizational manager makes decisions. so, let’s discuss deeply the condition of uncertainty.
If there should arise an occurrence of uncertain conditions, very little information is accessible to the managers and the managers don’t know with respect the unwavering quality of such information.
A condition of uncertainty happens when managers know nothing about the issue they face.
They don’t have a clue about every one of the other options, the risk related to them, or the possible outcomes of every other option.
This uncertainty arises from the intricacy and dynamism of contemporary organization and their surroundings.
Managers have restricted information to work out the level of risk, so factual examination is preposterous.
The condition of uncertainty arises when the organization presents a new or creative item or administration, takes on new innovation, chooses a new publicizing program, and so forth to settle on successful decisions in unsure conditions, managers should procure as much applicable information as could be expected and approach the circumstance from an intelligent and judicious point of view.
Instinct, judgment, and experience generally assume significant parts in the dynamic cycle.
In any case, choice under uncertainty is the most questionable for managers and there is a greater chance of mistake.
In any case, there are sure methods that can be involved by managers for settling on better decisions under uncertainty conditions.
For instance, they might utilize choice trees, risk investigation, and inclination hypothesis for settling on the best decisions in uncertainty conditions.
In this session, we will conclude and discuss Which three conditions do decision-makers face?
Decision-making conditions are the condition under which an action or series of actions can be made.
Under these conditions, the person making the decision will have the best chance of making the right decision.
Decision-making is a key skill for every student. The ability to make a decision involves the selection of the right course of action.
What are decision-making conditions?
Decision-making conditions are conditions that have to be met before a course of action can be taken. Decision-making conditions make up the “Rules of the Game” in the game of political decision-making.
What are the examples of decision-making conditions?
The following examples of decision-making conditions show how people react to different events. People normally make decisions based on information or facts. However, not all information or facts are equal. There are also other circumstances when people react negatively or positively to different situations.
Decision-Making conditions certainty risk uncertainty examples
When people are deciding something, they will tend to weigh the certainty of their decision with the risk of making the wrong decision. For example, when going to buy a house, they will weigh the certainty of buying a property they like (known risk), with the uncertainty of finding the right property (unknown risk).