Making Decision in Uncertain Conditions - An Idea

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Making Decision in Uncertain Conditions - An Idea
"If you care about what people think about you,
you will end up being their slave. Reject and
pull your own rope" ? Auliq Ice

• Presented By - www.Tools4Management.com

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Why Should you Deal with Uncertainties?

• Managers have to make decisions for the future of
  their organizations. Sometimes they have to make
  decisions when they are not aware either of the
  current conditions or the future results.
• As a manager, you can apply decision making tools
  and techniques to manage successfully in
  uncertain conditions. Dealing efficiently with
  uncertainty can help you avoid risks in future

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Risk Identification

• Financial risks - Economic losses resulting from
  change in policy, poor resource allocation,
  decrease or increase in price of commodity and
  interest rate fluctuation.
• Strategic risks - Risks arising from the
  investments made to achieve objectives and
  mission. Include transaction risks, investor
  relation risks and macroeconomic risks.
• Legal risks - Risks from litigation threats in
  laws and regulations.
• Operational risks - Risks arising from using low
  quality raw materials and due to production
  errors.

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Risk Quantification

• In this stage, managers need to calculate the
  amount of money they have to invest in case a
  crisis or risk occurs. In general sense, risk is
  the result you get after adding the probabilities
  of a risky outcome and multiplying that with the
  loss you think you might incur.

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Risk Management

• When risky activities are involved, the
  management should have the ability to transform,
  absorb and manage the risks. This process can
  tell you, if the organization can endure risks.
  If you realize that the organization has the
  ability to tolerate risks, you might take
  greater risks.
• Implement effective decision-making tools and
  techniques to know what you should do when there
  is uncertainty in the organization.

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