CSS Solved Business Administration Past Papers | A manager who really wants to approach a decision rationally and logically should try to follow the steps in rational decision making. Discuss these steps with examples.
The following question is attempted by Miss Nimra Masood, the top scorer in CSS Business Administration papers. Moreover, the answer is written on the same pattern, taught by Sir to his students, scoring the highest marks in compulsory subjects for years. This solved past paper question is uploaded to help aspirants understand how to crack a topic or question, how to write relevantly, what coherence is, and how to include and connect ideas, opinions, and suggestions to score the maximum.
Topic Breakdown:
Decision-making is integral to success of a business. It helps in formulating an effective financial and marketing strategy, along with optimally utilizing the human resource. Hence, understanding the decision making process is the foundation to CSS business administration.
Subject: Principles of Management
Chapter: Decision Making
Introduction:
Decision-making is integral to success of a business. From top to lower management every staff member is bound to make decisions. Decisions made rationally deliver the effective and efficient results. There are five steps in rational decision-making. All steps must be closely scrutinized and evaluated to achieve at a decision. Any error or discrepancy can mislead the management towards a wrong decision.
Assumptions of Rationality:
- The decision maker must be fully objective and logical.
- The decision maker has clearly defined the problem and goals are clearly defined.
- Rational decision would lead towards an alternative that maximizes the likelihood of achieving the goal.
- Rational decision-making assumes that decisions are made in the best economic interest of the organization.
Steps in Rational Decision Making:
- Identifying Problem:
It is the discrepancy between desired and actual state of effect. It is the state where authorities realize that decision needs to be made. Structured problems are familiar and easily defined; therefore, their goals are clear. While unstructured problems are novice in nature; hence, their information is either ambiguous or incomplete. Thus, it requires innovative custom made decisions.
For example a company realizes its laptops are outdated and its employees need a new one.
- Characteristics of Problems:
- A problem becomes a problem when a manager becomes aware of it.
- There is pressure to solve the problem.
- The manager must have the authority, information and resources needed to solve the problem
- Decision Criteria and Weightage:
Once the problem is defined the next step is defining the decision criteria and assigning weightage to each characteristics. Decision criteria are factors critical to solving the problem. Issues such as cost of leaving the issue unaddressed, risks involved and achievability of desired outcomes, are all catered in this phase. Once the decision criteria are defined, weightage must be assigned to each factor determining its relative importance. For example when the company has decided to purchase laptops the next thing is to decide on the features of laptop. Features such as memory, battery life, display quality and cost can influence the buying decision.
| Decision Criteria | Weightage |
| Memory | 10 |
| Battery Life | 6 |
| Display Quality | 4 |
| Cost | 8 |
Company is focused on memory and cost as its priority.
- Identifying Alternative:
The third step in rational decision-making is to identify available alternatives that could help solve the problem. A thorough market research or brainstorming with others can help generate a number of ideas. For example a market research provides alternatives such as HP, Sony and MacBook for buying a laptop.
- Evaluation of Alternatives:
The fourth and most technical step is evaluation of available alternatives to find the best option that could solve the problem. There are several ways to evaluate alternatives:
- Quantitative Factors:
These factors are measured in numerical terms such as time, cost and resources required to solve a problem. For example quantitative analysis reveals that MacBook is too costly for the company. - Qualitative Factors:
These factors are difficult to measure such as political climate, labor relationships etc. - Marginal Analysis:
This method is mainly used to compare the additional revenues arising from the additional cost. - Cost Effectiveness Analysis:
It is also known as the cost benefit analysis. It measures the potential benefit of each alternative against its cost.
- Selecting an Alternative:
Next step is to select the best alternative that could solve the problem effectively. Although evaluation of alternatives can aid in selecting the alternatives, the manager may also rely on certain other factors to reach a final decision.
- Experience:
Previous purchase experience certainly has an impact on the decision maker. However, the conditions and type of problem may have a varying outcome to the alternative. - Experimentation:
Relying solely on the evaluation phase to make a decision - Research Analysis:
A detailed research to examine the features is another method to achieve a decision.
For example the company decides to purchase dell laptops due to its previous experience with the brand.
- Evaluating the Decisions Effectiveness:
The last step in rational decision-making is to evaluate the effectiveness of the decision made. In other words it is the degree to which the problem is solved and desired state is achieved. For example the purchase of Dell laptops has proved highly effective, as both the employees are satisfied and results have also improved.
Conclusion:
For effective and efficient decision making manager must be rational and logical. There are six steps in decision-making that result in achievement of a desired state, at least to a degree. Without rational decision making the manager may get astray and result in an error prone decision. Therefore, only rational decisions can ideally perform under varying conditions.
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