BBA RESEARCH METHODOLOGY DECISION MAKING
DECISION MAKING
Formally defined, decision making is the process of resolving a problem or choosing among alternative opportunities. The key to decision making is to recognize the nature of the problem/opportunity, to identify how much information is available, and to recognize what information is needed. Every business problem or decision making situation can be classified on a continuum ranging from complete certainty to absolute ambiguity.
Complete certainty means that the decision maker has all the information that he or she needs. The decision maker knows the exact nature of the business problem or opportunity. For example, an airline may need to know the demographic characteristics of its pilots. The firm knows exactly what information it needs and where to find it. If a manager is so completely certain about both the problem/opportunity and future outcomes, then research may not be needed at all. However, perfect certainty especially about the future, is rare.
Uncertainty means that managers grasp the general nature of the objectives they wish to achieve, but the information about alternatives is incomplete. Predictions about the forces that will shape future events are educated guesses. Under conditions of uncertainty, effective managers recognize potential value in spending additional time gathering information to clarify the nature of the decision.
Ambiguity means that the nature of the problem to be solved is unclear. The objectives are vague and the alternatives are difficult to define. This is by far the most difficult decision situation. Business managers face a variety of decision making situations. Under conditions of complete certainty when future outcomes are predictable business research may be a waste of time.
However, under conditions of uncertainly or ambiguity, business research becomes more attractive to the decision maker. As the situation moves farther along the scale toward ambiguity, the need to spend additional time on business research becomes more compelling