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Theories of Decision-making

Normative Decision Theory: It is a classical approach to decision-making. This theory identifies the best decisions by selecting one perfect decision-maker who has perfect knowledge, rationality and accuracy in taking the best decisions. This theory also focuses on practical application and deals with how managers should make decisions. It forms the basis for decision analysis. This theory aims at identifying and developing various techniques, methods and tools that support people in making better decisions. It is also known as the prescriptive theory of management. The theory was generally propounded by PF Drucker and Ansoff. This theory is generally used where decisions are to be made with regard to quantitative data, numbers such as economics and finance. The key focuses of the theory is generally used where decisions if they want to maximise their productivity. The theory is based on various assumptions such as there is perfect information about the decision to be made, there is ce

Errors and Common Biases in Decision-making

Availability Bias: Under this bias, the decision-maker makes his decisions and judgements on the basis of the information, data and facts that are freely and easily available, then it can be remembered easily which helps in decision-making. Overconfidence Bias: This bias arises when the decision-maker is given factual data and is asked to evaluate the probability that his choice is correct. In this case, the decision-maker overestimates his accuracy and is confident about his decision. Anchoring Bias: The manager relies on first-hand information rather than entire information. Hence, he fixes his attention on the information received first and the decision is made on the basis of this information only. The subsequent information is ignored. Hindsight Bias: This bias makes the decision-maker believe that he had accurately anticipated the outcome, even when the outcome is known. Representative Bias: The decision-maker assesses the probability of occurrence of an outcome by linking i

Decision-making Process

The decision-making process was designed by Herbert Simon. The model comprises three distinct elements which are as follows: Intelligence: This refers to raw data which is gathered and probed. This data helps in identifying the problem which requires decision-making. It helps in knowing problem is about. Design: This element focuses on developing, designing, inventing and examining various alternatives which can result in decision-making. Once, these alternatives are identified, they are tested for feasibility and implementation. Probing is done to calculate the value of the outcome of the decision. Choice: After the manager has developed various substitutes, the final element is to select the best alternative. This selection is done on the basis of predetermined criteria. Following steps are involved in decision-making: Identify the Decision:  This deals with the identification of the decision is to make. It also identifies what outcomes are desired to be achieved. Whether it is a s

Types of Management Decisions

Routine Decisions: These are the day to day decision taken by low level and middle-level managers. They are taken after analysing the already laid procedures, rules and policies. The middle-level managers use the standard policies set by the top-level management as a benchmark to derive a certain choice. They are known as tactical decisions. They can be easily delegated to the subordinates as they are mostly programmed. The results or outcomes of routine decisions or tactical decisions only affect a small portion of the organisation. Strategic Decisions: These decisions taken by the manager are very crucial for the growth of the organisation. They deal with policy formulation, developing new business models, analysing the environment and various alternatives in order to derive the outcome. Strategic decisions are generally taken by top-level managers. The outcomes of such decisions affect the health of the entire organisation. They cannot be delegated to the subordinates. Programmed

Rail Transport in India

The first passenger train in India was started by Lord Dalhousie, Governor-General of India on April 16, 1853, between Bori Bunder, Bombay, and Thane covering a distance of 34 km. Indian Railway was nationalised in 1951 and presently, it is the largest Railway Network in Asia and the second largest railway network in the World. There are three types of rail lines in India: Broad Gauge (1676 mm) Meter Gauge (1000 mm) Narrow Gauge (762 mm) In 2015, Indian Railway consists of 108,706 km route comprising Broad Gauge (88,547 km), Meter Gauge (16,489 km) and Narrow Gauge (3450 km). The total number of Railway Zones in India is 16 and the largest Railway Zone is North Zone . Progress of Locomotives in India 1893: First railway foundry was set up at Jamalpur (Bihar). 1895:  The first locomotive was built with old pairs at Ajmer workshop. 1899: Lady Curzon was the first locomotive built in India, at Ajmer. January 26, 1950: Chittaranjan Locomotive Works (CL

Mintzberg Management Roles

Mintzberg has propounded various roles that a manager has to fulfil. These roles were published in his book 'Mintzberg on Management: Inside our strange world of organisations" in the year 1990. The 10 roles of a manager are enlisted below. Inter-personal Role: Inter-personal roles are that roles that deal with human, such as making networks i.e. leadership and emissions and inspiring the people i.e. figurehead. These are as follows Figurehead: This role aims at inspiring workers in the organisation and make them feel connected with the organisation and each other. The manager plays the role of a person who is available to help the workers and support them. Leader: The manager leads his team with constant motivation and support and focuses on achieving organisational objectives. This role includes guiding the workers about their work and how they can accomplish set targets. The leader then rewards the worker for fulfilling the task. Liaison: Here, the manager communicates w

Photosyntheisis - Equation of the Overall Process

Photosynthesis means synthesis of food with the help of sunlight. The overall equation of photosynthesis is Photosynthesis process takes place only in green parts of the plant, mostly in leaves and to lesser extent in green stems or floral parts of the plants. Leaves of the plant are known as light powered food factories. A green substance called chlorophyll in the leaves catches the energy from sunlight, water from soil, CO 2 from air and completes the chemical form. This process is called photosynthesis. Chlorophyll pigments are mainly present in cell organelles called plastids (chloroplast). There are different kinds of chlorophyll molecules present in photosynthesis organisms. In plants mostly there are two kinds viz. chlorophyll a and chlorophyll b . Both chlorophyll a and chlorophyll b are very similar in molecular structure, except that the CH 3 group in chlorophyll a is replaced by CHO group in chlorophyll b . The CO 2 for photosynthesis comes from air. It see

Vitamin - Function, Deficiency and Sources

Vitamin Function Deficiency Sources A-Retinol For normal growth in children. To maintain conjunctiva aids in night vision. To maintain skin and mucous membrane. Roughness and dry skin. Inability to see in dim light. Xerophthalmia leading to blindness (cornea becomes rough and dry). Nyctalopia (Night blindness). Fish, liver, oil, butter, milk, egg B1-Thiamine 1st vitamin to be discovered by Eijkman in 1897. Essential for healthy nerves & mucous membrane. (Destroyed by high temperature & banking soda) Causes Beri-Beri Checks growth in children Yeast, bacon, vegetables B2-Riboflavine To obtain steady and continuous release of energy Checks growth Skin becomes rough and red. Diarrhoea and digestive upsets. Milk, cereals, vegetables, yeast, meat B3-Niacin or Nictonic Acid Essential for healthy digestive function. Helps to control cholesterol

Levels of Management

 Levels of management can be divided into three types, they are Operational level management Middle-level management and Top-Level management. Each of these types of levels of management discussed below in brief. Operational Level Management: They have the following responsibilities: They assign tasks to employees. Guide and supervise subordinates on daily basis. Responsible for quality and quantity of production. Give suggestions to middle-level managers. Help in the execution of various policies and programmes formulated at higher levels. Lower-level managers are the actual executors, hence they must acquire technical skills, having incharge of operations and executions, they must know how to make their subordinates work on technical grounds. Middle-level Management: They have the following responsibilities: They are subordinate to the top-level management, however, they are superior to the lower level management. Accountable to higher-level managers. They guide and lead supervisory-

Do You Know: Various Instruments of Financial Market

Zero Coupon Bonds (ZCB) Zero Coupon Bonds (ZCB) are issued at a discount to face value. They don't provide for any payment of interest during the currency of the bond but it pays the face value in the maturity. For example a bond of face value of Rs. 100 can be issued at Rs. 90, at the time maturity, bond holder will be paid Rs. 100 only. These bonds are popularly called as Zeros. Deep Discount Bond (DDB) Deep Discount Bond (DDB) is similar to Zero Coupon Bonds (ZCB), but the difference may be that DDB are issued to at deep (more) discount to the face value and can have not necessarily longer period of maturity. Sweat Equity Share Sweat Equity Share is the share which can be issued to the employers and directors of the company at a discount; or the shares issued for consideration other man cash for providing know-how or making available rights in the nature of intellectual property rights or value additions may called as Sweat Equity Shares. Global Depository Receipts (GD