Basic Concepts of Decision Making

Basic Concepts of Decision Making ABSTRACT Decision making according to the Big Dictionary of Science is the selection of decisions or policies based on certain criteria. This process includes two or more alternatives because if there was only one alternative no decision would be taken. In an organization, we must be faced with a choice where we must choose this option for the benefit of the organization. In this article I will explain how to make the right decision. In the Big Indonesian Dictionary, decision has the meaning of provisions, determinations and solutions to obtain certainty. Decision making is universally defined as the selection of various alternatives for solving a problem. A. INTRODUCTION Decisions are the basis of all kinds of conscious and appropriate human activities individually or in groups, each person must be brave and able to make accurate and correct decisions. Decisions taken as a group or organization are the result of deliberation between members of the organization. A good organization can also make decisions by coordinating all members' actions to achieve the same goal. Decisions made within the organization must take into account situations and conditions outside the organization because situations and conditions outside the organization also influence the life and activities of an organization. Decision making that only looks inside the organization will result in the decision only having a short-term positive impact but also having to think about the long-term negative impact. The importance of decision making greatly influences the sustainability of an organization and how decision making can be carried out properly and correctly. 1. Definition of Decision Making 1.1 John M Ivancevich According to Mr. John M. Ivancevich, what is meant by decision making is: as a process of choosing certain actions in facing problems or dealing with existing opportunities. There are 4 factors that have a significant impact on decision making, namely: • Values In the context of decision making, values can be used as demands that a person uses when confronted with a situation in which a choice is made. The influence of values in the decisionmaking process includes: a. On setting goals b. On developing alternatives c. On selecting an alternative d. At the evaluation and supervision stage • Propensity for Risk Someone who is experienced in making decisions has a tendency to take risks. This is a strong influence of personality that influences the decision-making process. A decision maker has a low ability to avoid risks when setting different goals, evaluating different alternatives, whereas in making other decisions the decision maker will have a high ability to avoid risks in the same situation. • Potential of Dissonance Most attention has focused on the forces and influences that influence the decision maker before the decision is made and on the decision itself. When discrepancies occur, they can certainly be reduced by admitting that a mistake has been made. In general, many individuals have made the wrong decision and prefer to do the following things: a. Seek information that supports their wise decisions. b. Selectively perceive information in a path to support their decisions. c. Adopt favorable views. d. Minimize the negative aspects pending in the decision and magnify the positive aspects that are important in the decision. • Escalation of Commitment Concerns an increase in commitment to a decision now when a person makes a rational decision. The attitude of persisting in making a decision in a relationship even though the events and facts around it do not support it can also be said to be an escalation of commitment. 1.2 Peter F. Drucker According to Peter Drucker, the first question that must be asked by anyone, especially executives, to be effective is "What needs to be done?" and “What is the right thing to do?”. Necessary and appropriate questions in an effective context are much more important than the question "What do you want to do?" Necessary and appropriate questions will be more directed towards planned goals than wanting questions. Wanting in reality often disrupts our concentration on goals, whether individual goals or even organizational goals. This is the basic formula, necessary and precisely effective. Who is an executive? He is a person, judging by his position or knowledge, responsible for a contribution that affects the organization's capacity to run and achieve results. He makes decisions with his knowledge, not just carrying out orders. As long as he is in his position, goals, standards and contributions are his responsibility. Every knowledge worker in a modern organization is an executive. Management is needed so that organizational goals can be achieved effectively and efficiently. Effectiveness according to Peter F. Drucker is "doing the right job". while Efficient is "doing the job correctly". So that the management carried out leads to business activities effectively and efficiently, management needs to be explained based on its functions/known as management functions (planning, organizing, implementing, as well as controlling and supervising functions). The decision making process according to Peter Drucer: a. Defining the problem b. Analyze the problem c. Develop alternatives d. Take the right decision e. Making decisions into effective actions 2. Basics of Decision Making 2.1 Intuition Decision making based on intuition or feelings is more subjective, that is, it is easily influenced by external influences and other psychological factors 2.2 Experience It often happens that before making a decision, the leadership remembers whether cases like this have previously occurred. In this case, experience can indeed be used as a guide in solving problems. Making decisions based on experience has many benefits for practical knowledge, because with the experience a person has, one can estimate the state of something, can calculate the pros and cons and the pros and cons of decisions. 2.3 Authority Many decisions are taken because of the authority they have. Every person who is the leader of an organization has the duty and authority to make decisions in order to carry out activities to achieve organizational goals effectively and efficiently. 2.4 Facts There are those who argue that decisions should be made and supported by adequate facts. In fact, the term fact needs to be linked to the terms data and information. A collection of facts that have been grouped systematically is called data, while information is the result of processing data. Making decisions based on empirical data and facts can provide healthy, solid and good decisions. With facts, the level of confidence in decision making can be higher. 2.5 Rational In decision making based on ratios, the resulting decisions are objective, logical, more transparent and consistent to maximize results or value within certain constraints, so that it can be said to be close to the truth in accordance with what is desired. This rational decision making is fully valid in ideal circumstances. 3. Decision Making Method 3.1 Classic Model A decision making that is based on the assumption that managers should make logical decisions that are in accordance with the best economics of the organization. Decision making acts to achieve known and agreed goals. Decision makers strive for conditions of certainty by gathering information. The criteria for evaluating alternatives are known. Decision makers are people who are rational and use logic in determining values, decisions, and using decisions that will maximize the achievement of organizational goals. 3.2 Administrative Model A decision-making model that describes how managers actually make decisions in difficult situations, such as those characterized by unprogrammed decisions, uncertainty, and ambiguity. The decision making model is based on Haerbert A. Simon's theory. Simon proposes two concepts that are instrumental in the formation of administrative models: bounded rationality and compliance. Administrative models depend on different assumptions. This model is more realistic compared to classical models for complex and non-programmed decisions. Decision objectives are often vague, contradictory, and lack agreement among managers. Rational procedures are not always used and when they are, they are limited by the simplest view of the problem that does not capture actual organizational events. Managers' search for alternatives is limited because of human, information, and resource problems. Many managers choose compliance over optimal solutions. 3.3 Political Model The third model of decision making is useful in making unprogrammed decisions when conditions are uncertain, information is limited, and there is disagreement between managers about which goals should be achieved or what course of action should be taken. 4. Conclusion Based on the results of the explanation above, we can draw the conclusion that decision making is very important for individuals and groups. Making an individual or group decision requires accuracy in analyzing the problem, setting goals, preparing existing alternatives and evaluating them. So that in the end it creates a right and good decision.