Principles Of Management Decision Making Environments Commerce Essay

Decision devising is defined as a procedure to place jobs, bring forth alternate solutions, select the best solutions available and implement them. Alternately, it is a procedure of choosing a solution from a few options. In the procedure of garnering information for doing a determination, whether the determination is based on complete, uncomplete or no information at all and this is one of the procedure in determination devising. This will take to doing different type of determination result with different consequences and hazards.

There are 3 types of determination devising environment which categorized into certainty, uncertainness and hazardous. Each with it ‘s ain set consequence and reply will be obtained from the 3 types of determination devising environment which is certainty, uncertainness and hazardous. In brief account, certainty would intend that sufficient sum information has been gathered and the consequence result is known and depends on the director to make up one’s mind which to take from. Uncertainty on the manus, means that the determination shaper does non hold any information and is unsure of the result and to a great extent trust on his experience and discretion to do the determination. Finally, determination devising in hazardous environment would be explained as that the determination shaper has information but it is really limited or uncomplete, hence they will non cognize for certain what will go on in the hereafter or result of the determination.

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As determination devising is really much of a day-to-day occupation for a company director. Hence director make determination on a day-to-day footing and their consequence is based on the determination devising environment available. They experienced it and gained from doing each of the determination. This helps in their experiences and will turn out to be critical in their occupation. Directors largely play an of import function in an organisation and their determination is really of import for the company or squad of the director. In this thesis I would be discoursing the three determination doing environment and illustrations would be give a complete apprehension on each of the determination devising environment. By the terminal of this thesis one would genuinely understand the definition and the significance behind each determination doing environment. With the given illustrations clear apprehension can be achieve by readers of the thesis.


In this state of affairs, the determination shaper obtains the complete information in order to ease his determination devising. Certain status which means that adequate information and complete inside informations in doing a determination are achieved. Result and result is known by the determination shaper. Hence, clear consequence can be obtained from each of the determination made. Advantages of doing determination in certain status is that one would clearly cognize the consequence of each of the determination made. Clear consequence can be obtained in this determination devising. Consequently, better consequence and result can be achieve in certain status in this determination devising. Example is given below to better apprehension and to let readers to ease in the state of affairs of a determination devising environment.

An illustration of determination devising in certain conditions is the undermentioned state of affairs. In an investing company you have been offered two alternate investings. Investing A and Investment B, investing A gives a return of 7 % in two old ages while investing B gives a 5 % besides in two old ages. This clearly shows that determination shaper have suffice information to do determination based on the information obtain. In this state of affairs, determination shaper will hold clear consequence of the result whether make up one’s minding to put in investing Angstrom or B. In this determination doing environment it is a certain that the investor will have either 7 % or 5 % based on this environment.

In another illustration which revolve around our day-to-day footing in buying an point or shopping for apparels or nutrient. For illustration shopping for apparels between two given pick is besides an illustration of determination devising in certain status as the purchaser will clearly cognize the result of the determination made. For case, point X and point Y, each with their ain monetary value and quality of an point. As an illustration, point X cost Rm150 while point Y cost Rm 200 both with their ain quality. Item X may come with a lower quality comparison to item Y. Hence, the purchaser will cognize the result of the determination made and the point they have purchased. If the purchaser chose point X he will have an point that cost Rm150 with a lower quality comparison to item Y. Surely in this state of affairs of the illustration, this is an illustration of determination devising in certain environment where the purchaser knows the consequence and result.

On the other manus, in another illustration, there is merely one possible event for the two possible actions: “ Do nil ” at a future cost of $ 3.00 per unit for 10,000 units, or “ rearrange ” a installation at a future cost of $ 2.80 for the same figure of units. In these fortunes, it can be consider as determination devising in certain environment because the result of the two consequence is known. The determination shaper will hold the pick to make nil at a future cost of $ 3.00 per unit for 10,00 units if the determination chose this. Notably, both of the determination made will hold different consequence but both of the consequence is clearly stated. These would let the determination shaper to easy make up one’s mind on which to take. Hence, this falls under the class of determination devising in certain status.

In add-on to the few illustrations above, advancing an employee to a higher place can besides be considered as a determination made under certain environment. This is because advancing an employee is considered certain because of the long helping or the first-class working attitude shown by the employee. It can be concluded in this determination devising environment because that the director made this determination to possibly honor the peculiar employee or to non lose the employee. In this determination merely several consequence could be achieve by advancing or bumping the employee. As mentioned before advancing him would convey a positive consequence on the employee and bumping him will merely convey negative consequence. Hence, it falls under the class of determination doing under certain environment.


Besides the determination devising environment discussed before, there is another determination devising in unsure conditions which means that information is so deficient that directors ca n’t even reason to the likely results of the options. This is considered to be in unsure environment and hence can be said as the status which is most hard for a director. Decision doing under uncertainness conditions is largely being a innovator in come ining undiscovered district either in concern or belongings development which is new to the market. It rely to a great extent on directors to work out this sort of uncertainness with creativeness or unique or can be say wholly advanced attack in managing this state of affairs. Besides that, all the method above depend greatly on intuition and all leave considerable room for mistake. In other words, doing determinations in unsure conditions greatly rely on the accomplishments and experience of determination shaper as no information or information could assist them.

For illustration opening a new subdivision is categorized in determination devising in unsure status as it pioneer in a new unknown country which could take to uncertainness to concern gross. This is because there is no information or information sing the new country whether the new subdivision would bring forth adequate income to cover the rental fees, monthly wage for workers and many more. Besides that, the sum of clip for the investing gross to turn net income is another factor for opening a new subdivision. For venture like this, it would greatly trust on the determination shaper in taking a suited location for the new subdivision. This unsure determination devising environment would do a monolithic impact on the determination shaper as it is of import to take or make up one’s mind a suited location based on one experience in the geographics of an country.

Establishing a new merchandise that caters to a different targeted purchaser is besides considered as determination devising in unsure status. Like the illustration before, this is besides one of the pioneering to a new market which is all but uncertainness. It could be a hit for the merchandise or merely a simple waste of gross. This uncertainness could be explain in a elaborate mode with illustration of a company which has been selling rattan merchandises to the townspeople people of klang and now wish to present a different ceramic merchandise to the people at that place. In this state of affairs, one could clearly see that there is no information or information in respect of the people of klang in accepting new ceramic merchandise. Hence this state of affairs is an unsure devising determination environment.

In add-on to the few illustration given another illustration I would wish to advert is that a major alteration in selling scheme. A alteration which surely means that a different sort of attack has been adopted by the company for a better good or to maximise the effectivity of the current selling scheme and this would take to a determination doing under unsure status. As a consequence, the company have venture out of its comfort zone and is wagering on the alteration to profit for the company. For illustration a company enduring from hapless selling scheme in forcing the merchandise to stop user may alter its scheme but it is a determination made under unsure environment which the company has no hint whether it will work.

Last but non least another illustration I would wish to portion which is for illustration at Vanguard group, employee are exhausted in their readyings for a figure of events that could interrupt their investing concern. Hence their biggest fright is an investor terror that overloads their client service system waiter during the extremum and hiking of markets. Furthermore, they do non cognize what else could finally go on in the thick of the events. As a consequence they fall into doing determination in unsure status.


In a hazard environment, the determination shaper deficiencies of complete information sing the status he is managing. This status is now more hard as a director may understand the job and the options, but has no assurance in each solution will work. Merely minimum information will be obtained and it will give a small penetration of what about to go on with each of the determination made. Normally, this state of affairs can merely be assumed to happen or non based on the information obtained and the per centum of chance that each of the state of affairs will go on. All these state of affairs can be concluded in hazardous status in a determination devising procedure. All in all the determination made could turn out to be on path or on the other manus may merely non work as it expected to be.

In one of a few catastrophe which happened before on this really nature Earth that could be highlighted as a error in doing determination in hazardous conditions. One of it is the celebrated Chernobyl catastrophe where the authorities made a hazardous determination to construct one of a few atomic works to bring forth electricity for its citizen. The program nevertheless gone good in the early phase and received good recommendation on its advantages for the citizen. At the terminal, it proves to be incorrect and the atomic works exploded as a consequence of deficiency in the care sector. This could be one of the few illustration which clearly shown the determination made under hazardous environment which could profit all or damaging to all.

Besides that, another homo caused environmental catastrophe due to the choice of incorrect determination made in hazardous environment. As a consequence of the determination, Exxon Valdez an oil oiler has collided with barrier reef causation spill that has damaged the environment of all time since. This is due to the determination made in hazardous environment where the determination shaper does non hold suffice information and continue with the program and it backfired doing the spill. The determination made in this is chiefly for the net incomes of the company disregard the hazard it carries in transportation of oil. Hence, it clearly shown that this is one of the illustration of determination made under hazardous environment and ended doing harm to the female parent nature.

On the other manus, another illustration can be shown in a gross revenues related company from the monthly gross revenues statement that it has been noticed to increase each month. Therefore, one would presume that the company has been doing net incomes from the gross revenues. Without obtaining other information such as operational cost, alteration in consumer market, loan involvement and many more, Then one provinces that the chance of company doing net incomes is 70 % and the company will do losingss is 30 % . With this, the determination shaper decided to put more, hence a hazardous determination has been made due to the deficiency of research and information.

To show, another illustration will be given to better understanding on determination devising in hazardous environment. In a shopping shop, the shop director has noticed the addition of gross revenues in the pocketbook section and hence he rapidly placed another unusual large order to refill the stock believing the gross revenues would go on to increase. But non bury that the peculiar section of shopping shop might been holding gross revenues or publicity over the point to force the gross revenues for the pocketbook section. Therefore, it might be a right determination to put a large order or a incorrect one. Consequently it puts the shop director in a hazardous determination devising environment where he placed an order non cognizing the ground behind the increase of gross revenues.

3.0 Decision

With all of the illustration given in each of the determination devising environment, it clearly shown that different determination devising environment have a different impact on the consequence or determination made. For illustration determination made under certain status would let the determination shaper to clearly foresight what is the consequence of each of the determination. Hence, a better determination could be made in order to profit him. In another words, determination made under uncertainness would hold a different consequence comparison to risky and certain status. This is because the determination shaper has no information whatsoever in respect to the determination he is about to do. Therefore, this could set the determination in a existent gamble and the determination to be in a even state of affairs.

Last but non least, the determination made under hazardous environment has the biggest hazard of all as the name implies. The determination shaper could endanger the whole company with merely a simple hazardous determination. In decision, all of the determination devising environment has its ain impact in respect of the consequence and it is clearly points to the determination shaper. If it ‘s under an experient determination shaper with originative thought, there ‘s a opportunity that the company will be in good manus. With each of the determination devising environment explained, it is critical to garner all possible information in every possible manner in order to do a good determination.


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