seminar on decision making

7/30/2019 Seminar on Decision Making

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Decision making-

decentralization basic goals ofdecentralization


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DECISION MAKING DECENTRALIZATION OF BASIS

GOAL DECENTRALIZATION

I. INTRODUCTION

Decision making is the most important function of all administrators. It is a

challenge as well as a risky procedure. Most of the functions of a hospital or any firm

requires decision making. As nurses are part and parcel of the administration at

various, we must be aware of the challenges, steps and modern techniques of decision

making.

Effective decision making is an art. It involves finding and selecting the best

alternative and having the most appropriate person to make and implement the

decision at the right time. Decision making is the process of selecting one course of

action from alternatives. It is a scientific problem solving process. Problem solving is

a skill that can be learned. Hospital agency may provide policies that may help in

taking decision at the staff nurse level, in routine situations. But the nursing

administrators are often confronted with challenging situations.

II. TERMINOLOGY

1. Decision making: a purposeful and goal directed effort using a systematic

process to choose among options. The hallmark of decision making is the

identification and selection of options.

2. Decentralization: is a delegating decision making responsibility to the ones

doing the work participatory management.

3. Centralization: is the extent to which authority is retained at the top of the

organization.

4. Authority: Power to give orders and make others obey.

5. Delegation: is the process of assigning work from one organizational level to

another or from the superior to the subordinate.


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III. OBJECTIVE

General objective: On completion of the class the group will have in depth

knowledge regarding the decision making- decentralization basic goal of

decentralization and apply it in their practice.

Specific objective: After completion of the class, the group will be able to-

1. Define decision making

2. List the types of decision making.

3. Explain the classification and level of decision making.

4. Discuss the time and basis for decision making.

5. State the factor affecting decision making.

6. Explain the steps in decision making.

7. List the decision making authorities.

8. Discuss the models of decision making.

9. Explain the tool of decision making.

10. State the advantages of decision making.

11.Define decentralization.

12. Discus the basic goal of decentralization.

13. Explain the decentralized structure.

14. List the advantages and disadvantages of decentralization


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IV. CONTENT

DEFINITION OF DECISION MAKING

Decision making is a necessary component of leadership, power, influence,

authority and delegations.

John 1993

Decision making calls for systematic process in which a manager chooses

among the alternatives come to a conclusion and select an action.

Rebecca Samson

Decision making is a systematic process of choosing among alternatives and

putting the choice in to action.

Lancaster and Lancaster

Decision making is the heart of all managerial and administrative functions. It

is true that the decision making is a part of everyday life. Decision making is at the

core of all planned activities. It is the last step of process by which an individual

chooses one alternatives from several to achieve a desired objective.

TYPES OF DECISION MAKING

1. There are 4 managerial decisions

a. Mechanistic

Routine and repetitive in nature

It usually occurs in a situation involving a limited number of decision variables

where the outcome of each alternative is known.

Tools used for these kinds of decisions are charts, list, decision tree etc.

b. Analytical decision

This decision helps to solve the complex problems


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It involves a problem with a large number of decision variables where the

outcome of each decision alternatives can be computed.

Computational techniques involve linear programming and statistical analysis.

c. Judgemental decision

Decision involves a problem with a limited number of decision variables but the

out of the decision alternatives are unknown.

These types of decision are useful in marketing investment and to solve the

personal problems.

d. Adaptive decision

Decisions involving a problem with a large number of decision variables where

outcomes are not predictable.

Such ill structured problems require contribution of many people with diverse

technical background. Eg. Research finding

2. Nursing Administration decision making

According to Ann Bill Taylor

a. Non routine decision: made by directors of nursing. The out of the problem will

be unpredictable. Eg. Changing ways of organizing for the delivery of nursing

care.

b. Routine decision: made by mid level and low level managers, the outcome will

be predictable. Eg. Assigning the duty roster, assign the security laws.

CLASSIFICATION OF DECISIONS & LEVELS OF DECISION MAKING

Generally decisions are broadly divided into two categories:

1. Typical, routine, unimportant decisions

2. Important, vital or strategic decisions


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Routine decisions: Involve no extraordinary judgement, analysis and authority, since

they are dealing with less important problems. Routine decisions demand power to

select the shortest path, within the given means and ends.

Strategic decisions: Aim at determining or changing the means and ends of the

enterprise. They require a thorough study, analysis and reflective thinking on the part

of administrators. Strategic decisions are usually taken by top managers, while routine

decisions are made mostly by lower level managers.

TIME AND BASIS FOR DECISION MAKING

There are six important bases for decision making which are referred to as aids

to decision making and they include experience, authority, facts, intuition, research,

analysis and experimentation.

1. Experience: Experience is the most important and valued basis for making

decisions. Experience gives the administrator the requisite vision, that trains

him to apply his knowledge to the best of its use and that helps him to

recognize the crucial factors from unnecessary details.

2. Authority: Provides an important basis for enabling managers to take quick

and sound decisions.

3. Facts: Provide the solid basis for decision making. Decisions become wrong

only when adequate facts are not available on the problem. The computer

technology has been introduced for supplying greater facts to operating

managers.

4. Intuition: It is the residuary basis for covering up deficiencies in other three

bases of decision making. It includes guess work, and common sense views.

5. Research and analysis: These are the most effective basis for choosing among

alternatives. It helps in finding out relationships among the other important

variables.

6. Experimentation: This provides another means by which various alternatives

can be evaluated. Since experimentation becomes and expensive basis for


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decision making in many cases, it is used sparingly for indicating the best

course of actions in problems like policy formation, product development,

introduction of new organizational technique etc.

FACTOR AFFECTING DECISION MAKING

Internal factors

Decision makers physical and emotional status

Personal characteristics and values

Past experience and interest

Knowledge and Attitude

Self awareness and courage

Energy and creativity

Resistance to change

Sensitivity and flexibility

External factors

Cultural environment

Philosophical environment

Social back ground

Time

Poor communication

Cooperation

Coordination

STEPS IN DECISION MAKING


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The decision making task can be dividing making into six steps which are stated in

order of their sequence as:

1. Making the diagnosis

2. Analysing the problem

3. Searching alternative solutions

4. Selecting best possible solution

5. Putting the decision into effect

6. Following up the decision

Making the diagnosis

The first step is to determine what the real problem is. If the problem is not

ascertained correctly at the beginning, money and effort spent on the decision making

will be a waste. The original situation will not come under control. But new problems

will start from this incorrect appraisal of the situation. The diagnosis should not be

merely based on one or two visible symptoms. But it should be diagnosed after the

analysis of the whole situation.

Analysing the problem

The problem should be thoroughly analysed to find out adequate background

information and data relating to the situation. This analysis may provide the manager

with some revealing circumstances that will help him to gain an insight into the

problem. The whole approach should be based around the important factors. Only

pertinent and closely connected factors are selected, as dictated by the principle of the

limiting or strategic factor.

Searching alternative solution

After anodizing the problem attempts are made to find alternative solutions to the

problem. In the absence of alternatives decision making process will become.

Selecting best possible solution


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Selection of one best course of action among the several alternatives developed;

require an ability to draw distinctions between tangible and intangible factors as well

as facts and guesses. The four criteria have been suggested by Dracker in selecting the

best solution.

1. Proportion of risk to the expected gain.

2. Relevance between the economy of effort and the possibility of results.

3. The time considerations that meet the needs of the situation.

4. The limitation of recourses.

Instead of picking the best solution managers have to really on a course of action

that is satisfactory enough under the existing circumstances and limitations.

Putting the decision in to effort

The decisions can be made effective through the action of other people. In order to

overcome the opposing on the part of employees managers can make three

important preparations.

a. Communication of decisions

b. Securing employee acceptance

c. The timing of decisions

Follow up the decision

As a safe guard against the incorrect decisions managers are required to a

system of follow up care of the decisions so as to modify them at the earliest.

DECISION MAKING AUTHORITIES

1. Individual

2. Group

3. Committees

Individuals as decision makers


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The autocratic managers fears that decisions made by others may be more

costly, less effective and represents a threat to his/ her position. There are mainly 3

behavioural characteristics that influence the decision making.

Perception of the problem: it is affected by ones previous experience and value

system.

Personal value system: basic convictions about what is right, good or desirable.

The role theory: it predicts how actions will be performed in certain roles and

how it will be affected certain circumstances. Specific behaviour associated

with position constitutes roles.

Group factors in decision making

Group comprises two or more people who share common interest and come

together to accomplish an activity through face to face interaction. Commitment to the

decision and to the implementation is important and may be increased by participation

in the decision making process.

Advantages of group participation

Increasing self expression, innovation and development.

Increases the commitment.

Disadvantages of group participation

Change in the participants may create problems.

Few people may dominate in the group.

Members may become more interested in arguments and winning than finding a

solution.

The decisions can be most acceptable but not optional.

Committee Aspects in Decision Making


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A committee a group of people chosen to deal with a particular topic or

problem. It can be formal of informal committee. A committee appointed to collect

data analyze finding make recommendations is an ad hoc committee.

Advantages of decision making by committee

Time consuming

Expensive

Indecisiveness can be result in the adjournment of the committee.

Pressure for unanimity discourages creativity from the members.

MODELS OF DECISION MAKING

Vroan and Yelton Narrative/Prescriptive Model

They define decision making as a social process and emphasis how mangers work

rather than should behave in their normative way. It is used when information is rather

than should behave in their normative way. It is used when information is objective,

the problem is structured or routine, and options are known and predictable.

Vroan and Yelton identified 5 alternative decision making process.

A Autocratic

C Consultative

G Group

I First variant

II Second variant

AI making decision by yourself using information available to you at that time.

AII obtain necessary information from your subordinates then decide on a solution

to your problem. But subordinates will be unaware about the problem.


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CI - shares the problem with subordinates individually, and gets their ideas and

suggestions. Then you make a decision that may or may not reflect your subordinates

influence.

CII- you share the problem with subordinates as a group, together you generate and

evaluate alternatives and attempt to reach agreement on a solution. You do not try to

influence the group to adopt your solutions but are willing to accept and to implement

any solution that has the support of the entire topic.

GI is applicable only in more comprehensive models.

Vroan identified 7 rules that do most of the work of the model. Three rules protect the

decision and quality and four rules protect the acceptance.

The information rule: If the quality of decision is important and the leader

doesnt poses adequate information to solve the problem then AI is eliminated

from the feasible set.

The goal congruence rule: if the quality of decision is important and the

subordinates do not share the organizational goals to be obtained in solving the

problem then GII is eliminated.

The unstructured problem rule: If the quality of decision is important and the

leader doesnt poses adequate information to solve the problem and if the

problem is unstructured then eliminate AI, AII, and CI.

The acceptance rule: If the acceptance of the decision by the subordinates is

critical for the effective implementation, if it is uncertain that an autocratic

decision made by the leader would receives the acceptance then AI, AII are

eliminated from the feasible set.

The conflict rule: if the acceptance of the decision is critical and if it is

uncertain that an autocratic decision made by the leader would receives the

acceptance and subordinates are likely to be in conflict over the appropriate

solution then AI, AII, CI is eliminated from the feasible set.


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The fairness rule: if the quality of the decision is unimportant, acceptance is

critical, and an uncertain to result from an autocratic decision. AI, AII, CI and

CII are eliminated.

The acceptance priority rule: if acceptance is critical, not assured by an

autocratic decision and if subordinates can be trusted then AI, AII, CI, and CII

are eliminate.

Descriptive or Behavioural Model

Used when information is subjective, non routine or unstructured. Uncertainty

exists because outcomes are unpredictable. Situational that fall in to this category can

be better handled by gathering more data, using past experience, employing creative

approaches, etc.

Optimizing Model

Decision maker select the solution that maximally meet the objective for a

decision. Usually this process involves assessing the pros and cons of each known

outcomes as well as listing benefits and costs associated with each option. The goal is

to select the most ideal solution. This process is most expedient and may be the most

appropriate when time is an issue.

Satisfying Model

Decision maker selects the solution that minimally meets the objective for a

decision. It is more conservative method compared to an optimizing approach. This

process is most expedient and may be the most appropriate when time is an issue.

TOOL OF DECISION MAKING

1. Judgemental technique

2. Operational research technique

3. Delphi technique

4. Decision tree

1. Judgmental technique


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a) This is the oldest technique and subjective in decision making.

b) Based on past experience and intuition about future.

c) Useful in making routine decision.

d) Cheap and not time consuming.

e) Hazardous due to a chance for taking wrong decision.

f) Rarely used in large capital commitments.

2. Operational research technique (OR)

It can be defined as the analysis of decision problem using scientific method to

provide manager the needed quantitative information in making decision.

a) Operational research makes the decision analytic, objective and quantitative

based.

b) Steps of OR technique

Construction of mathematical model that pinpoints the important factor in

the situation.

Definition of criteria to be used for comparing the relative merits of

various possible courses of action.

Procuring empirical estimates of the numerical parameters in the model

that specify that particular situation to which it is applied.

Carrying out through the mathematical process of finding and series of

action which will give optimal solution.

Types of OR Technique

1. Linear programming: Uses linear mathematical equations to determine the

best way to use limited resources to achieve maximum results. This technique

is based on the assumption that a linear relationship exists between the

variables and the limits of variation can be calculated. Linear programming is a

sophisticated short cut technique in which computers can be used. Threeconditions must be existing before linear programming must be utilized.


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a. Either a maximal or a minimal value is sought to optimize the objective. The

value may be expressed in terms of cost or quantity.

b. The variables affecting the goal must have a linear relationship. The ratio of

change in one variable to the changes in the other variable must be constant.

c. Constraints to the relationship of the variable exist.

It can be used to determine a minimal cost nutrition diet or determine a class

size, class hours, and instructors in school of nursing.

2. Queuing theory: It deals with waiting lines or intermittent servicing problems.

It balances the cost of waiting versus the prevention of waiting by increasing

the services. A group of items waiting to receive service is known as a queue.

By decreasing or eliminating the waiting line to reduce waiting line cost, there

is an increase in cost of labor and physical facilities.

3. Games theory: In normal games, each player or group of player tries to choose

a course of action which will frustrate opponents action and help in winning

the game. The same will apply in the context of business by maximize his loss.

4. Programme evaluation and review technique (PERT): PERT is a network

system model for planning and control under certain conditions. It involves

identifying the key activates in a project, sequencing the activities in a flow

diagram, and assessing the duration for each phase of work.

a) It is appropriate for project work that involves extensive research and

development.

b) Helps to predict time.

c) Helps to determine priorities.

d) Use of recourses can be considered when setting priorities.

e) Assignment can be changes temporarily.

f) Overtime or temporary help can be given to facilitate the activity flow.

g) Can manipulate the time required to move from one event to another.


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5. Critical path method (CPM):

Closely related to PERT. Critical path method calculates a single time

estimate for each activity, the longest possible time. CPM is useful where the

cost is a significant factor.

6. Computers in decision making:

In management information system computers can be used for various

activities like patient classification system, supplies and material management

system, staff scheduling, policy and procedure changes and announcements,

patient charges, budget information and management, personal records,

statistical reports, administrative reports and memos etc.

3. Delphi technique

It allows members who are dispersed over a geographic area to participate in

decision making without meeting face to face. This is possible through the use of

questionnaire. The members will return the questionnaires anonymously; the

results of the first questionnaire are centrally compiled and sent to each member.

Again the members are asked for suggestions. This process continues until the

consensus is reached. Little changes usually occur after the second round.

The Delphi technique is free from others influence.

Doesnt require physical presence.

Appropriate for scattered group.

But it is true consuming.

4. Decision trees

A decision tree is a graphic method that can help the supervisor in visualizing

the alternatives available, outcomes, risk and information needs for a specific

problem over a period of time. It helps to see the possible directions that actions

may take from each decision point and to evaluate the consequences of a series of

decisions. The process begins with a primary decision having at least two


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alternatives. Then the predicted outcome of each decision considered and the need

for further decision is contemplated.

A1

A2

A3

A4

Alternatives

Chance events

ADVANTAGES OF DECISON MAKING

1. It is characterized by order and direction that enables managers to determine

where they are.

2. Provide a frame work data gathering which is relevant to the decision.

3. Allows application of previous knowledge and experience that minimize errors

and improve quality of patient care and work of an organization.

4. Increase managers confidence and ability in making decision.

DECENTRALIZATION

Introduction

Decentralization is the division of activities by forming departments. In nursing

service, departmentalization aims on attaining a better quality of patient care through

benefits derived from specialist nurses. Departmentalization aims to provide better

arrangements, control of facilities, equipments and materials required to perform the

necessary service.

Decision

point 1


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The nursing service administrator should explicitly define the standards,

policies, and scope of decision to be undertaken by top administration and those to be

handled by departments and their subunits.

Decentralization versus Centralization

The term centralized and decentralized refer to the degree to which an

organization has spread its lines of authority, power, and communication.

The centralization tends to concentrate decision making at the top level of the

organization, whereas decentralization disperses decision making and authority

throughout decision making and authority throughout and further down the

organizational hierarchy. The centralization and decentralization can be thought of as

two theoretical extremes of one continuum. In other words the decentralization is the

extent of authority is passed down to lower levels in the organization. The

centralization is the extent to which authority is retained at the top of the organization.

Complete centralization complete decentralization

Definition of decentralization

Decentralization is the dispersion or delegation of responsibilities and the

authority to lower levels of an organization. Institution makes use of bothcentralization & decentralization. Top management needs a positive attitude towards

decentralization and they need competent personal to whom they can delegate

authority.

Decentralized structure

The decentralized structure is flat in nature and organizational power is spread

out throughout the structure. These are few layers in the reporting structure, andmanagers have a broad span of control. Communication patterns are simplified and

Authority decentralization

Authority not delegated

Nursing Administrator


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problems tend to be addressed with ease and efficiency at the level at which they

occur. Employees have autonomy and increased job satisfaction within this type of

structure.

Dec

Decentralization (Flat, Horizontal, Participatory) Structure

Flat organizational structures are characteristic of decentralized management.

Decentralization refers to the degree of which authority is shifted downward within an

organization to its divisions, services, and units. Decentralisation is delegating

decision making responsibilities to the ones doing the work participatory management.

Implementation of philosophy of decentralized decision making by top

management sets the stage for involving more people perhaps even the entire staff in

making decisions at the level at which an action occurs. Both decentralized

management and participatory management delegate authority from top managers

downward to the people who report to them. In doing so, objectives or duties are

assigned, authority is granted, and an obligation or responsibility is created by

acceptance the employee is accountable for results.

In nursing, as in other organizations, delegation fosters participation, teamwork,

and accountability. A first line manger with delegated authority will contact another

department to solve a problem in providing a service. The first line manager does not

need to go to his or her department head of the other service, creating a

Maternity

su ervisor

Paediatric

su ervisor

Surgery

su ervisor

Nurse Nurse Nurse Nurse Nurse Nurse


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communication bottleneck. The people closest to the problem solve it, resulting in

efficient and cost effective management.

ADVANTAGES AND LIMITATIONS OF DECENTRALIZATION

Advantages

The advantages of decentralization are as follows:

1. Relieves top manager from burden of managing.

2. Encourages subordinates to undertake responsibility.

3. More freedom to managers.

4. Increases motivation of subordinates.

5. Enhances competition among various departments/units.

6. Helps setting up of profit centres.

7. Promotes development of general managers.

8. Prepares mangers for rapid change in the organization.

Limitations

The limitations of decentralization are as follows:

1. Maintenance of uniform policy throughout organization becomes difficult.

2. Increases complexity of coordination.

3. May lead to loss of control by superior level managers.

4. May be limited by inadequate control techniques.

5. May be constrained by inadequate planning.

6. Limited by inadequate training.

7. Limited by inadequate number of qualified personnel at lower level.

8. It may be limited by external factors like; government regulations, taxation

policy of government, etc.


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V. CONCLUSION

Decision making lies deeply embedded in the management process and is the only

vehicle for carrying managerial work load. Nurses should actively involve in decision

making in all levels rather than simply obeying the decisions. It is effective only when

it is timely done. It needs courage as well as creative thinking from the part of the

nurse administrator.

The size of the organization is also a key factor in determining the extent of

centralization or decentralization. As the scope and amount of work of manager

increasers, the trend is towards decentralization. There are distinct advantages of both

the systems.

VI. BIBLIOGRAPHY

Text Books

1. Petricia S Yoder-Wise. Leading and managing in Nursing. 2nd

edition. Mosby

publication; 1999

2. Mary Lucita. Nursing: Practice and Public Health Administration. 2nd edition.

India: Elsevier publication; 2007

3. BT Basavanthappa. Nursing Administration. 2nd edition. New Delhi: Jaypee

brothers publication; 2009

4. Bessie L. Marquis and Carol J. Huston. Leadership Roles and Management

Functions in Nursing Theory and Application. 5th edition. New York:

Lippincott Williams & Wilkins; 2006

5. Linda Roussel. Management & Leadership for nurse administrators. 4th edition.

USA: Jones & Bartlett publication; 2006


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6. Russell. C Swansburg, Richard j Swansburg. Introducdtion to management and

leadership for nurse manager. 3rd edition. USA: Jones and Bartlett publication;

2002.

Journal/Abstracts

Research conducted on Magnet hospitals found the must of the hospitals has a

decentralized structure in which nurses had a feeling of control over their unit work

environment. Porter OGrady identified the following conditions as essential for

effective decentralization:

Freedom to function effectively

Support from Peers and leaders

Concise and clear expectations of the work environment

Appropriate resources

seminar on decision making

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