ABSTRACT
This chapter deals with perceptions in decision-making for organizational effectiveness, which enables the reader to gain an understanding of its importance in the context of the organization's growth, diversification into other businesses, and opportunity utilization. It also outlines the quantitative techniques of decision-making essentially based on mathematical models. Decision-making can be done under certainty and also in uncertain conditions where probabilities of possible outcomes are not known. Some criteria followed during decision-making under uncertainty are Maximax, Maximin, Laplace, Hurwicz, and others. Decision-making under the Risk criterion is the Expected Monetary value that determines the expected payoff of each alternative, whereas the other measure can be the Expected Profit with Perfect Information. The types of decisions can be Programmed and Non-Programmed Decisions and Strategic and Tactical Decisions. The decision-making models that are discussed in this chapter constitute classical, rational, administrative, and political. Later, the Herbert Simon Model segregated decision-making into the following—Design, Intelligence, and Choice phases. The decision-making styles and the quantitative techniques used for decision-making are explained with relevant examples in this chapter such as the economic order quantity (EOQ) model, Just in Time, and Material Requirements Planning. Several other tools such as Cost Benefit Analysis, Force Field and Grid Analysis, Decision trees and tables, Paired Comparison and Break-Even Analysis, and program evaluation and review technique (PERT) and Gantt charts have also been explained with examples.
