Managing Decision Making and Problem Solveing

7/30/2019 Managing Decision Making and Problem Solveing

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MANAGING DECISION

MAKING AND PROBLEMSOLVEING


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Managing Decision Making and Problem Solving

Submitted To:

Chowdhury Saima Ferdous,

Lecturer,

Department of International Business,University of Dhaka.

Submitted By:

Name Roll No.

(1) Tanmoy Das 01

(2) Tasnim Farhat Noor 20

(3) Farjna Akhter Kona 34

(4) Md. Sujon 48(5) Md. Mizanur Rahaman 51

Students of

BBA (15th Batch)

Department of International Business.

University of Dhaka.

Submission Date: March25, 2009


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March25, 2009;To,

Chowdhury Saima Ferdous,

Lecturer,

Department of International Business,

University of Dhaka.

Subject: Submission of a term paper.

Honorable Madam;

We are pleased to submit our term paper on the course Principles of Management (IB:

102). We have prepared our term paper on our course instructions.

We are confident that the presentation of this term paper has enhanced both our practical

experience and theoretical knowledge to a great extent. It would be helpful for us if this

term paper serve the purpose and fulfill your Requirements.

Thanking you,

Sincerely yours,

Md. Mizanur Rahman.

(On behalf of the group)


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Acknowledgement

At this point we would like to acknowledge some of the people who have made a major

contribution to prepare this paper.

We thank to seminar library authority for making coordinal by serving books when we asked to

them. We are grateful to the Pabon Textile Mills Limited & Knitmart Private Limited Company

authority for healping us. We are recognizing the contribution of Anwarul-Ulom & Sanjay

Kumar Dutta to complete this term paper. We would also like to thank fellow friends Abdullah

Sakif Nur, Rakib Bappy, Rifad Khan and Marjan Hira for their help and suggestions. Finally we

would sincerely like to thank our honorable Course teacher Mrs. Chowdhury Saima Ferdous for

helping us in gathering such knowledge to prepare this paper.

MD. Mizanur Rahman,

(On behalf of the group)


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Table of Contents

NO. Content Name Page No.

1 Abstract 4

2 Introduction 5

3 Theories of managerial decision making and problem solving. 6

4 Decision making and problem solving in RMG industries in

Bangladesh.

16

5 Visit 1 16

6 Visit 2 22

7 Findings 27

8 Gaps between Theory and practice 29

9 Recommendations 30

10 References 32


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Abstract

Managerial decision making and problem solving is very important for an organization. It helps

in taking proper decision according to the conditions through a proper way. It mainly discussed

about the decision making conditions, types of decisions, various perspectives of decision

making and the factors that affect the decision make process. This paper will give a brief

discussion over the theory of decision making and problem solving, decision making and

problem solving in RMG industries in Bangladesh, findings from practical visits, Gaps between

theory and practice and some recommendations.


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Introduction:

Decision-making is a crucial part of any business. The question that is how is a good decision

made?

One part of the answer is good information, and experience in interpreting information.

Consultation is seeking the views and expertise of other people also helps, as does the ability to

admit one was wrong and change ones mind. There are also aids to decision-making, various

techniques which help to make information more clearer and better analyzed, and to add

numerical and objective precision to decision-making(where appropriate) to reduce the amount

of subjectivity.

Managers can be trained to make better decisions. They also need a supportive environment

where they wont be unfairly criticized for making wrong decisions (as we do sometimes) and

will receive proper support from their colleague and superiors. A climate of criticism and fear

stifles risk-taking and creativity; managers will respondby playing it safe to minimize the risk

of criticism which diminishes the business effectiveness in responding to market changes. It

may also mean managers spend too much time trying to pass the blame around rather than

getting on with running the business.

Decision-making increasingly happens at all levels of a business. The Board of Directors maymake the grand strategic decisions about investment and direction of future growth, and

managers may take the more tactical decisions about how their own department may contribute

most effectively to the overall business objectives. But quite ordinary employees are increasingly

expected to make decisions about the conduct of their own tasks, responses to customers and

improvements to business practice. This needs careful recruitment and selection, good training,

and enlightened management.

Thus, as a starting point of understanding decision making, we must first explore the meaning ofdecision making as well as types of decisions and conditions under which decisions are made.


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Decision Making Defined:

Decision making can refer either a specific act or general process. It is a pervasive part of most

managerial activities. Virtually everything that happens in a company involves making decision

or implementing a decision that has been made. Decision making means the act of choosing best

alternative from among a set of alternatives.

The word best, of course, implies effectiveness. Effective decision making requires that the

decision maker understand the situation driving the decision. Most people would consider an

effective decision to be one that optimizes some set of factors, such as profits, sales, employee

welfare, and market share. In some situations, though, an effective decision may be one that

minimizes loss, expenses, or employee turnover. It may eve mean selecting the best method for

going out of business.

We should also note that managers make decisions about both problems and opportunities. Of

course, it may take a long time before a manager can know if the right decision was made.

Types of decision:

Managers must take many different types of decision. Generally decision can be divided into one

of two categories:

Programmed Decision:

Programmed decisions are standard decisions which always follow the same routine. As

such, they can be written down into a series of fixed steps which anyone can follow. They

could be written as computer program. Programmed decision is fairly structured or

recurs with some frequency

Non-Programmed Decision:

Non-programmed decisions are non-standard and non-routine. Each decision is not quite

the same as any previous decision. It is relatively unstructured and occurs much less

often than a programmed decision.


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There are other three types of decision. These are as follows:

Strategic Decisions:

These affect the long-term direction of the business. Mainly top level managers of an

organization take these kinds of decision

.

Tactical Decisions:

These are medium-term decisions about how to implement strategy eg; What kinds of

marketing strategy to have ? or how many extra staff to recruit ?

Operational Decisions:

These are short-term decisions ( also called administrative decisions ) about how to

implement the tacties eg; which firm to use to make deliveries.

Figure 1: Levels of Decision-Making.

STRETEGIC

DECISIONS

TACTICAL

DECISIONS

OPERATIONAL

DECISIONS

OWNERS / BOARD

OF DIRECTORS

MANEGERS

MOST EMPLOYEES


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Decision-Making Conditions:

Just as there are different kinds of decisions, there are also different conditions in which

decisions must be made. Managers sometimes have an almost perfect understanding of

conditions surrounding a decision, but at other times they have few clues about those conditions.

In general, as shown in figure, the circumstances that exist for the decision maker are conditions

of certainity, risk, or uncertainity.

Decision-Making under certainity:

A condition in which the decision maker knows with resonable certainity what the

alternatives are and what conditions are associated with each alternative.

Decision-Making under risk:

A condition in which the availability of each alternative and its potential payoffs and

costs are all associated with probability and estimates.

Decision-Making under uncertainity:

A condition in which the decision maker does not know all the alternatives, the risks

associated with each, or the consequeces each alternatives is likely to have.

Figure 2: Decision-Making Conditions.

The Decision Maker Faces Conditions of.

Certainty Risk Uncertainty

Level of ambiguity and chances of making a bad decision

Lower Moderate Higher


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Rational perspectives on decision making:

Most managers like to think of themselves as rational decision makers. And, indeed, many

experts argue that managers should try to be as rational as possible in making decisions. This

section highlights the fundamental and rational perspectives on decision making.

The Classical Model of Decision Making:

A perspective approach to decision making that tells managers how they should make decisions;

assumes that managers are logical and rational and that their decisions will be in the best

interests of the organization.

a) Decision makers have complete information about the decision situation and possiblealternatives.

b) They can effictively eliminate uncertainity to achieve a decision condition ofcertainity.

c) They evaluate all aspects of the decision situation logically and rationally.As we see later, these conditions rarely, if ever, actually exist.

Steps in Rational Decision Making:

A manager who really wants to approach a decesion logically and rationally should try to follow

the steps in rational decision making. These steps in rational decision making help keep the

decision maker focused on facts and logic and help guard against inappropriate assumptions and

pitfalls.


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Figure 3: Steps in the Rational Decision-making Process.

Although the presumptions of the classical decision model rarely exist, managers can still

approach decision making with rationality. By following the steps of rstional decision making,

managers ensure that they are learning as much as possible about the decision sitution and its

alternatives.

01. Recognizing and defining

the decision situation

02. Identifying alternatives

03. Evaluating alternatives

05. Implementing the chosen

alternatives

04. Selecting the best

alternatives

06. Following up and

evaluatin the results


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Steps in the rational decision-making are stated below:

01.Recognizing and defining the decision situation:

Some stimulus indicates that a decision must be made. The stimulus may be positive or

negative. For many decisions and problem situations, the stimulus may occur any prior

warning.

Inherent in problem recognition is the need to define precisely what the problem is. The

manager must develop a complete understanding of the problem, its causes, and its

relationship to other factors.

02.Identifying alternatives:

Once the decision situation has been recognized and defined, the second step is to

identify alternative courses of effective action. Developing both obvious, standard

alternatives and creative, innovative alternative is generally useful. In general, the more

important the decision, the more attention is directed to developing alternatives.

03.Evaluating alternatives:

The third step in the decision-making process is evaluating each of the alternatives.

Figure 4 presents a decision tree that can be used to judge different alternatives. The

figure suggests that each alternative be evaluated in terms of its feasibility, its

satisfactoriness, and its consequences.


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Figure 4: Evaluating alternatives in decision-making process.

Managers must thoroughly evaluate all the alternatives, which increase the chances that

the alternative finally chosen will be successful. Failure to evaluate an alternatives

feasibility, satisfactoriness and consequences can lead to a wrong decision.

04.Selecting an alternative:Even though many alternatives fail to pass the triple test of feasibility, satisfactoriness,

and affordable consequences, two or more alternatives may remain. Choosing the best of

these is the real crux of decision making. One approach is to choose alternative with the

optimal combination of feasibility, and affordable consequences. Even though most

situations do not lend themselves to objective, mathematical analysis, the manager can

often develop subjective estimates and weights for choosing an alternative.

Is the alternative

feasible? YesIs the alternative

satisfactory? YesIs the alternative

affordable?

No No No

Eliminate from

consideration.

Eliminate from

consideration.Eliminate from

consideration.

Retain for further

consideration.


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05.Implementing the chosen alternative:After an alternative has been selected the manager must put it into practice. In some

decision situations, implementation is fairly easy; in others it is more difficult. In the case

of an acquisition, for example managers must decide how to integrate all the activities of

the new business, including purchasing, human resource practice, and distribution, into

an ongoing organizational framework. Managers must also consider peoples resistance to

change when implementing decisions.

06.Following up and Evaluating results:The final step in the decision-making process requires that managers evaluate the

effectiveness of their decisionthat is, they should make sure that the chosen alternative

has served its original purpose. If an implemented alternative appears not to be working,

the manager can respond in several ways. Another previously identified alternative (the

original second or third choice, for instance) could be adopted.

Descriptive theory of Decision-making:

The descriptive or positive theory is a black-and-white concept where individuals visualize how

things are rather than how things should to be. Descriptive theory focuses on the individualschoices made in a situation, and considers decision as a single event. According to Shrode &

brown, the descriptive decision theory is based on describing, as precisely as possible, the

actual decision-making behavior of the decision-maker and how people make decisions. In

a relation to management type, descriptive theory is associated with the technical managers,

where their primary concern to solve problems immediately and have a short-run time horizon

Computational decision making decision making strategies utilized by the technical managers

allow them to solve problem swiftly and effectively since the solution to problems are

accomplished by computing various types of input and output data, in accordance with the

criteria of rationality. According to Petti, solutions to technical managers problems are

quantitative in nature and concerned with concrete problems that require immediate

solutions.


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Behavioral Aspects of Decision Making:

Sometimes when a decision is made with little regard for logic, it can still turn out to be correct.

An important ingredient in how these forces work is the behavioral aspect of decision making.

The administrative model better reflects these subjective considerations. Other behavioral

aspects include political forces, intuition and escalation of commitment, risk propensity, and

ethics.

The Administrative Model:

A decision making model that argues that decision makers---

a) Have incomplete and imperfect information,b) Are considered by bonded rationality, andc) Tend to satisfies when making decisions.

The administrative model is based on behavioral process that affects how managers make

decisions. Rather than prescribing how decisions should be made, it focuses on describing how

they are made.

Figure 5: The administrative model of decision-making.

The administrative model is based on behavioral process that affects how managers make

decisions. Rather than prescribing how decisions should be made, it focuses on describing how

they are made.

When faced with adecision situation

manager actually

a) Use incompleteinformation

b) Are constrainedby bonded

rationality

c) Tend to satisfies

and end up with adecision that may or may

not serve the interests of

the organization.


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Political Forces in Decision Making: Political forces in decision making are another major

element that contributes to the behavioral nature of decision making. One major element of

politics, coalitions of is especially relevant to decision making. A coalition is an informal alliance

of individuals or groups formed to achieve a common goal. This common goal is often a

preferred decision alternative. For example, coalitions of stock-holders frequently band together

to force a board of directors to make a certain decision.

Intuition and Escalation of Commitment: Two other important decision processes that go

beyond logic and rationality are intuition and escalation of commitment to a chosen course of

action.

Intuition: an innate belief about something, without conscious consideration.

Escalation of commitment: a decision makers staying with a decision even when it appears to be

wrong.

Risk propensity in Decision-making: The behavioral element of risk propensity is the extent to

which a decision maker is willing to gamble when making a decision. They try to adhere to the

rational model and are extremely conservative in what they do. Such managers are more likely to

avoid mistakes, and they make infrequently make decisions that lead to big losses. Other

managers are extremely aggressive in making decision and are willing to make risks.

Ethics and decision making: Ethics are clearly related to decision making in a number of ways.

Group and Team Decision Making: In more and more organizations today, important decisions

are made by groups and teams rather than by individuals. Managers can typically choose whether

to have individuals or groups and teams make a particular decision. Thus knowing about forms

of group and team decision making and their advantages and disadvantages is important.

The most common methods of group and team decision making are:

1. Interacting group or team2. Delphi group3. Nominal group


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Decision making and problem solving in the RMG industries:

In this part of the paper, well describe the managerial decision making and problem solving in

the RMG industries. We have visited 2 RMG firms and collect information about their decision

making, risk areas and about problem solving. These are mentioned as below

VISIT: 1

Company name : Paban Textile Mills Limited.

Location : House no.408 (1st

floor),

Road no.29,

New DOHS,

Mohakhali,

Dhaka.

Contact person : Anwarul-Ulom.

Designation : Manager (Marketing).

Introduction of the Organization:

Paban Textile mill is a private limited company. The main function of this organization is totally

export oriented. They produce ready made garments according to the requirements of the buyer

and supply them. They use imported raw materials.

This is an export oriented production based RMG industry. Most of the times they have to take

decisions about getting orders and shipment of the orders.


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Decision making and problem solving in Paban Textile Mills Ltd.

The general process of decision making in this organization is-

Step.1: Getting the order.

Step.2: Held a meeting of administrative body to fix, how could they make proper shipment of

this order?

Step.3: Select the best way for the task.

Step.4: Divide tasks to the departments and give them a time limit.

Step.5: Monitor the process.

If the found any fault, the make changes to this. They used to make both the programmed and

non-programmed decisions in their firm. It is a fact that totally depends on the situation and

condition. They actually take programmed decisions in a few areas and most of the times they

take non-programmed decisions. If we consider the percentage of programmed and non-

programmed decisions of this firm itll be expressed as; 10% programmed and 90% is non-

programmed.

They actually take programmed decisions in a few areas. Those are stated as follows-

# They use a constant pricing system of their products.

# They have a fixed decision of increasing productivity every year.

# They make payments to the labors in the 5th

of every month.

# They have a fixed decision of keeping good relation with buyers all the time and keep

connection with them.

# They have a fixed decision of keeping 3 work shifts for labors and 1 work shift for the

officers.


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They actually take non-programmed decisions most of the times. Most of their decisions are non-

programmed because they have to response in instant to cope themselves with the changing

conditions. The areas non-programmed decisions which are taken by them are as follows-

# Maintenance of the supplies of raw materials: As they have to use the raw materials

imported from the other country, they some times face problems of quality of raw

materials, time of getting the supplies of raw materials, and the storage of the raw

materials. Then they have to take non-programmed decisions to solve these types

problems.

# Maintaining the labors: It is another crucial area of making decisions for them. They

have to watch the labors and understand the labor needs to get their works done. The

work will hamper if they dont react with the labor movements in the right time.

# The environment is not favorable all the time. It may change time to time. They have to

response according to the changing social environment, legal and political environment.

# They have to take non-programmed decisions to take the instant opportunities.

# Sometimes they take non-programmed decisions to fulfill the requirements needed to

get the orders from the buyers.

# Ifthey havent have much times to make the shipment of orders.

#If they programmed decisions creates problems in making profit.

There are a few certain decision making condition in this organization. Like-

Collecting labors, use of energy, how to get orders, collecting raw materials, opening L.C.

fixing the exchange rate, distributing sub-contract, transportation, banking, shipping,

insurance etc.


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They have to take decisions under the risk in the following conditions-

# When they have to use electricity when they are not sure when the power will fail.

# when they have to fix a profit margin when the profit is always uncertain.

# when they have to Fix the time limit of shipment of the orders.

# If they have to start to make orders before having the L.C notice.

Sometimes they have to make decisions under uncertain conditions. Most of the times this

conditions are concerned with the shipment of the orders, political changes, ports etc. normally

they dont take nay decision in an uncertain condition. But, sometimes, they are bound to take

decisions in the uncertain conditions.

Absolutely to make decision under the uncertain condition is very hard for them. They never feel

comfort in it. It may cause great losses to the organization. They take steps very carefully when

they have to take decisions in uncertain condition.

They feel much more comfortable in making decision under the condition of certainty. It is

comparatively easy, needs less thinking and energy. It is not harmful for the organization.

MR. Anwar doesnt, agree with that the managers have to be more rational in decision making.

As their firm is export oriented firm and they have to face random environmental turbulence,

they have a little chance to be rational. MR. Anwar. thinks that, managers should keep an eye on

every thing, make diagnosis, and try to solve the problem with instant decision after considering

the overall condition.


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They have to contact with the administrative model of decision making most of the times. They

normally follow the model of administrative decision making in following conditions-

# When the buyer claim something about the product.

# When any new problem arises while doing any work.

# To take opportunities in front of them.

# In response of political change.

# In response of environmental change.

# In response of changing government policy.

# If the buyer changes the order requirements.

# when they have to co-ordinate with the decisions of another department.

# When they have a time limit of a order shipment.

# if they got any problems with sub-contracting.

The group or team decisions are made when they have to fix a price and make the shipment

successful. They take group decision when they have to process the order and find out how to do

it efficiently. When they make decisions in groups, the GM calls on the managers of every

department. Then they discuss, argue with their views and take the best one for implementation.

Sometimes the low-ranked workers are also called on to express their opinion and the real

scenario. This can be defined as interacting group.

The low ranked employees in this organization have the power to take decision in his or her own

influential area. The top manager may not know the real scenario but the supervisor does. He or

she can take any decision according to his or her range. But it must be for the welfare of the

organization.

The top management always encourages the subordinates in decision making which can makethe organization more profitable and successful. They encourage the subordinates because they

know how to work in their own area. If any one from one department takes decision of another

department, itll be failed very soon.


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The governments view to the garment industry and export import policy is very important for

this type of organization. A great factor for decision making is How much the government is

liberal to them.

The governments policy of taxation is another important factor for determining the price.

How often the government changes there policy is another factor, because, they have to change

their decisions according to those changes. If the government changes policy randomly, it creates

an uncertain condition and it becomes very hard to take or change decisions for them.

They gave an example for this-

The Government has taken a decision of Rationing Gas for the productive Organization this

will make them to change their decisions about their uses of energy, working shifts and pricing.

- So they have to make decisions to keep their productivity up by finding another source of

energy such as Coals.

When they have to cope with the government decision, first, they try to modify the existing

decision. Because of modification needs less energy and time.

The most considerable risk for this organization is to process the order according to the

requirements of the buyer and shipping them just in time.

These are more considerable because the decisions are taken by considering work pressure for

the order and the success is depends on the shipment. The most vital decision in shipment is the

decision about the time. Intuition is very important in decision making in export oriented

organizations like this. Sometimes they negotiate with the buyers and make decision through

intuition.

The managers of this organization are willing to gamble with the decision because they know

what they are doing. But they try to take risks by lessening the risk coverage. People of lower

level dont take any greater decisions.


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Visit 2:

Company name : Knitmart Private Limited Company.

Location : Plot no.1; Road no.1;

BSCIC Industrial area;

Fotulla, Narayangonj.

Contact person : Sanjay Kumar Dutta.

Designation : Director.

Introduction of the organization:

Knitmart is a Private limited company. The main function of the company is to product ready

made garments under sub-contracts. They used to get orders and process them according to the

requirements. Sometimes the buyer organization provides raw materials, and sometimes they

have to arrange their own raw materials.

The decision making and problem solving of Knitmart Pvt. Ltd. Company:

For any type of decision the GM forms a group with all DGMs. They found the alternatives and

chooses the best one to put into practice. The decisions are made by them and because DGMs put

the decisions into practice. So, they can do the things what they had decided..

They use both the programmed and non-programmed decisions in the organization.

Programmed decisions are taken in a few areas and most of the times they take non-programmed

decisions.

The percentage of programmed and non-programmed decisions of this firm is 20% programmed

and 80% is non-programmed.


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As they work in sub-contract, they have to make their outputs according to the actual

requirements of the main recipient of the order. So, they have to operate their operation of

production totally with non-programmed decisions.

They actually take programmed decisions in a few following areas-

# They use a constant pricing system of their products.

# They make payments to the labors in the 7th

of every month.

#They used to get imported raw materials.

#They give half holiday to the labors on the date of paying wages.

# They have a fixed decision of keeping 3 work shifts for labors and 1 work shift for the

officers.

# They run their business by getting sub-contract and dont take any direct contract from

buyers.

They actually take non-programmed decisions most of the times. Most of their decisions are non-

programmed because they work in sub-contract; they have to make their outputs according to the

actual requirements of the main recipient of the order. So, they have to operate their operation of

production totally with non-programmed decisions. Decisions taken to process one order do not

maintained while processing another order.

The areas non-programmed decisions which are taken by them are as follows-

# They face problems of quality of raw materials, time of getting the supplies of raw

materials, and the storage of the raw materials. Then they have to take non-programmed

decisions to solve these types problems.

# They treat the labors by considering the pressure of works. If they have more pressure,

they try to get the job done any how. If the workload is less, then they are more

considerable to the labors.


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#They have to response according to the changing social environment, legal and political

environment.

# They have to take non-programmed decisions to take the instant opportunities.

# Sometimes they take non-programmed decisions to fulfill the requirements needed to

get the orders.

# they take non-programmed decisions if the programmed decisions create problems in

making profit.

There are a few certain decision making condition in this organization. Like-

How to get sub-contracts, collecting labors, use of energy, collecting raw materials,

transportation, banking, insurance etc.

They have to take decisions under the risk in the following conditions-

# Risk of Power failure when production is in process.

# Risk of damages and fall of quality.

# Risk of delivery of the order in given time.

# Financial risk or risk of getting payment.

Sometimes they have to make decisions under uncertain conditions. Most of the times this

conditions are concerned with political changes, possibility of price hike of raw materials in

future, if the buyer company will bear any portion of losses if it occurs etc. normally they dont

take any decision in an uncertain condition. But, sometimes, they are bound to take decisions in

the uncertain conditions.

They never feel comfort in making decisions in uncertain condition. It may hamper the

production and profits. They take steps very carefully when they have to take decisions in

uncertain condition.


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They feel much more comfortable in making decision under the condition of certainty. It is

comparatively easy, needs less thinking and energy. It is not harmful for the organization.

MR. Sanjay Dutta doesnt, agree with that Managers should always take decision in rational way.

The managers have to be more rational in understanding the present condition. So, they would be

able to face random environmental turbulence, and make proper decision. They try to solve the

problem with instant decision after considering the overall condition.

They used to contact with the administrative model of decision making most of the times. They

normally follow the model of administrative decision making in following conditions-

# If claim of quality fall arises.

# If new problem arises while doing any work.

# To take opportunities in front of them.

# In response of political change.

# In response of changing government policy.

# When they have to co-ordinate with the decisions of another department.

In this organization all of the decisions are taken by forming groups. If the problem is of high

level then they form a group of Top level managers to take decisions.

If the problem is of lower level then the authority form a group of lower level workers and try to

solve the problems, because everyone knows the best about ones position and about the

problems.

.So, interacting groups are made to make decisions.

The low ranked employees in this organization have no power to take any decisions. The top

manager tries to know the real scenario and take any decision from his or her own view.


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The top management always encourages the subordinates to suggest about decision making when

they form groups with them. This can make the decision more efficient. They encourage the

subordinates in this because they know what is happening in their own area. But, the top

managers are all in all in decision making. The governments view to the garment industry and

taxation policy is very important for this type of organization. A great factor for decision making

isHow much the government is liberal to them.

The governments policy of taxation is another important factor for determining the price.

How often the government changes there policy is another factor, because, they have to change

their decisions according to those changes. If the government changes policy randomly, it creates

an uncertain condition and it becomes very hard to take or change decisions for them.

When they have to cope with the government decision, first, they try to modify the existing

decision. Because of modification needs less energy and time. If modification is not possible

then they make a new decision to face new condition.

The most considerable risk for this organization is to process the order according to the

requirements. It has the most priority because, if they fail to supply quality RMGs, the ordered

will not make payments to them.

The managers of this organization are not willing to gamble with the decisions because decision

making area is very narrow here. They just get the orders and process it according to the

requirements. So, the risk coverage is very low here.


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FINDINGS:

Considering the decision making and problem solving of this two RMG organization, we can see

some common problems in the garment industries in Bangladesh.

These problems are as follows-

01.Collecting raw materials.02.Maintaining Workers.03.Working within a time limit.04. Improper port facility.05.Turbulence of Political-legal situation randomly.06.Government decisions which are not liberal to this sector.07.Problems with realizing the decision condition.08.Constriction of markets.09.Financial Uncertainty.

Their decisions are mainly concerned with-

01.Collecting raw materials.

02.Labor maintenance.03.Maintaining the quality.04.Shipment or delivery of the order.05.Time-limit of delivery.06.Increasing productivity.07.Getting the works done anyhow.08.Coping with the government policies.09.Maximization of profits.10.Efficiency of the works.11.Expansion of market.12.Proper supply of energy.


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Their decisions, in common, to solve this problem are mentioned below-

01.Import Raw materials.02.Maintain the required quality.03.Deliver the order anyhow in time limit.04.Do market research for expansion of market and entering to new markets05.Keep operating according to government instruction.06.Use available energy.07.Maintain the labor strictly to get the works done.08.Most of times they take non-programmed decisions on the spot.09.They try to understand the condition and then make their decisions.10.They take suggestions from subordinates sometimes allow to make decisions but

managerial decision is main.

11.Most of times they use their intuition in taking decision when the level of ambiguity isvery high.

12.They used to make decisions with low risk coverage.

Gaps between Theory and Practice:

We have discussed the theory of decision making and problem solving and also the practice of it

in two RMG firms. We have noticed some gaps between the theory and practice of decision

making and problem solving in RMG firms of Bangladesh.

Classical model of decision making is nearly obsolete here. Here the managers get a few chances

to be rational in decision making.

Theory says that, important decisions should be made by forming groups. But, the RMG firms

face more economic turbulence. Sometimes they have to make very important decision quickly

in individual to grab the opportunity.

Theory emphasizes on ethics in decision making. But, the RMG firms ignore ethical; questions

most of the times when it is a question of making profit and minimizing costs. They anyhow

want the work done.


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Theory suggests that, managers should consider the level of ambiguity and the risk coverage in

making decision. But, sometimes, the managers of RMG firms have to make decisions without

considering the risk or uncertainty, profit or loss, just for making the delivery or shipment within

time limit.

RECOMMENDATIONS:

In the previous pages, we see the theory of managerial decision making a problem solving,

problems and decisions of Two RMG firms and then we bring forth the common problem areas

and common decisions are made by the managers of garment industries.

Now, in this part of the paper, we would like to give some recommendations about decision

making and problem solving of the RMG firms in Bangladesh. We would try to focus on new

and vital areas to make our recommendation.

A problem arises in the RMG sector for cost increasing. They have to increase their price and

consequently old buyers are losing interest on buying products from them. Here, they can take

decisions like these-

a) Finding new market niche to compete.b) Find new sources of raw materials in cheaper rate.

So, they would be able to increase profits.

Sometimes they made inhumane decisions about maintaining labors and their wages. They try to

get the work done anyhow. They do not increase the pay scale even in the time of price hike to

reduce the operation cost and profit maximization. Itd hamper the existence of the firm for the

lack of employee satisfaction.

For this, they should make decisions about wages by considering the workload of the workers

and the economic situation and also by maintaining minimum profit for the firm.


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The decisions of RMG firms in Bangladesh are too much profit oriented. Most of the firms are

not aware of social responsibility. So, the firms should make decisions showing social

responsibility along with the maximization of profit.

Most of the RMG firms make non-programmed decisions most of the times and follow the

administrative model of decision making. So, they should be more conscious about realizing the

decision making condition, level of ambiguity and the risk coverage of nay decision.

In most of the RMG firms, subordinates have no right or authority to make any decision. Some

few managers take suggestions from them. But it is true that, the subordinates know the real

conditions. So, The managers in RMG firms should release considerable authority to

subordinates within their own area in making any decisions in order to make the decisions more

effective.

The government should be more liberal to the RMG firms. The liberal policies of government to

the RMG firms would help the firms to minimize the risk coverage in making decisions.

In most of RMG firm, decisions are taken by groups. But it may cause a loss of time when

prompt decision is needed. As this industry have to face the Random economic turbulence, the

managers should try to realize the decision making condition and the make proper and quick

decision by himself to get the instant opportunity.


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REFERENCES:

Books:

01.Ricky.W.Griffin Management, 8th Edition, Houghton Mifflin Company, U.S.A02.James A.F. Stoner and R.Edward Freeman, Management, Prentice Hall of India Pvt.

Ltd. India

Websites:

01.Wikipedia, the free encyclopedia; http://en.wikipedia.org/wiki/02.Banglapedia, national encyclopedia of Bangladesh,

http://banglapedia.net/HT/G_0041.HTM

03.http://www.actionm.com/problem_solving_decision_making.aspx

Documents

Managing Decision Making and Problem Solveing