Decision Making in Management

DECISION MAKING

Decision making can be regarded as the cognitive process resulting in the selection of a course of action among several alternative scenarios. Every decision making process produces a final choice. The output can be an action or an opinion of choice. It  is an essential aspect of modern management. It is a primary function of management. A manager's major job is sound/rational decision-making. He takes hundreds of decisions consciously and subconsciously. Decision-making is the key part of manager's activities. Decisions are important as they determine both managerial and organizational actions. A decision may be defined as "a course of action which is consciously chosen from among a set of alternatives to achieve a desired result." It represents a well-balanced judgment and a commitment to action.

It is rightly said that the first important function of management is to take decisions on problems and situations. Decision-making pervades all managerial actions. It is a continuous process. Decision-making is an indispensable component of the management process itself.

Means and ends are linked together through decision-making. To decide means to come to some definite conclusion for follow-up action. Decision is a choice from among a set of alternatives. The word 'decision' is derived from the Latin words de-ciso which means 'a cutting away or a cutting off or in a practical sense' to come to a conclusion. Decisions are made to achieve goals through suitable follow-up actions. Decision-making is a process by which a decision (course of action) is taken. Decision-making lies embedded in the process of management.

Simple decisions usually need a simple decision-making process. But difficult decisions typically involve issues like these:

• Uncertainty – Many facts may not be known.
• Complexity – You have to consider many interrelated factors.
• High-risk consequences – The impact of the decision may be significant.
• Alternatives – Each has its own set of uncertainties and consequences.
• Interpersonal issues – It can be difficult to predict how other people will react.

With these difficulties in mind, the best way to make a complex decision is to use an effective process. Clear processes usually lead to consistent, high-quality results, and they can improve the quality of almost everything we do. In this article, we outline a process that will help improve the quality of your decisions.

A Systematic Approach to Decision Making

A logical and systematic decision-making process helps you address the critical elements that result in a good decision. By taking an organized approach, you're less likely to miss important factors, and you can build on the approach to make your decisions better and better.

There are six steps to making an effective decision:

1. Create a constructive environment.
2. Generate good alternatives.
3. Explore these alternatives.
4. Choose the best alternative.
5. Check your decision.
6. Communicate your decision, and take action.

Step 1: Create a constructive environment

To create a constructive environment for successful decision making, make sure you do the following:

Establish the objective – Define what you want to achieve.

Agree on the process – Know how the final decision will be made, including whether it will be an individual or a team-based decision.

Involve the right people – Stakeholder Analysis is important in making an effective decision, and you'll want to ensure that you've consulted stakeholders appropriately even if you're making an individual decision. Where a group process is appropriate, the decision-making group – typically a team of five to seven people – should have a good representation of stakeholders.

Allow opinions to be heard – Encourage participants to contribute to the discussions, debates, and analysis without any fear of rejection from the group. This is one of the best ways to avoid groupthink.

Make sure you're asking the right question – Ask yourself whether this is really the true issue. The 5 Whys technique is a classic tool that helps you identify the real underlying problem that you face.

Use creativity tools from the start – The basis of creativity is thinking from a different perspective. Do this when you first set out the problem, and then continue it while generating alternatives. Our article Generating New Ideas will help you create new connections in your mind, break old thought patterns, and consider new perspectives.

Step 2: Generate Good Alternatives

This step is still critical to making an effective decision. The more good options you consider, the more comprehensive your final decision will be.

When you generate alternatives, you force yourself to dig deeper, and look at the problem from different angles. If you use the mindset ‘there must be other solutions out there,' you're more likely to make the best decision possible. If you don't have reasonable alternatives, then there's really not much of a decision to make!

Here's a summary of some of the key tools and techniques to help you and your team develop good alternatives.

Generating Ideas

Brainstorming is probably the most popular method of generating ideas.

Another approach, Reverse Brainstorming, works similarly. However, it starts by asking people to brainstorm how to achieve the opposite outcome from the one wanted, and then reversing these actions.

The Charette Procedure is a systematic process for gathering and developing ideas from very many stakeholders.

Use the Crawford Slip Writing Technique to generate ideas from a large number of people. This is an extremely effective way to make sure that everyone's ideas are heard and given equal weight, irrespective of the person's position or power within the organization.

The Reframing Matrix uses 4 Ps (product, planning, potential, and people) as the basis for gathering different perspectives.

Appreciative Inquiry forces you to look at the problem based on what's ‘going right,' rather than what's ‘going wrong.'

Organizing Ideas

This is especially helpful when you have a large number of ideas. Sometimes separate ideas can be combined into one comprehensive alternative.

Use Affinity Diagrams to organize ideas into common themes and groupings.

Step 3: Explore the Alternatives

When you're satisfied that you have a good selection of realistic alternatives, then you'll need to evaluate the feasibility, risks, and implications of each choice. Here, we discuss some of the most popular and effective analytical tools.

·         Risk

In decision making, there's usually some degree of uncertainty, which inevitably leads to risk. By evaluating the risk involved with various options, you can determine whether the risk is manageable.

·         Risk Analysis helps you look at risks objectively. It uses a structured approach for assessing threats, and for evaluating the probability of events occurring – and what they might cost to manage.

·         Implications

Another way to look at your options is by considering the potential consequences of each.

·         Six Thinking Hats helps you evaluate the consequences of a decision by looking at the alternatives from six different perspectives.

·         Impact Analysis is a useful technique for brainstorming the ‘unexpected' consequences that may arise from a decision.

·         Validation

Determine if resources are adequate, if the solution matches your objectives, and if the decision is likely to work in the long term.

·         Star bursting helps you think about the questions you should ask to evaluate an alternative properly.

To assess pros and cons of each option, use Force Field Analysis, or use the Plus-Minus-Interesting approach.

·         Cost-Benefit Analysis looks at the financial feasibility of an alternative.

Step 4: Choose the Best Alternative

·         After you have evaluated the alternatives, the next step is to choose between them. The choice may be obvious. However, if it isn't, these tools will help:

·         Grid Analysis, also known as a decision matrix, is a key tool for this type of evaluation. It's invaluable because it helps you bring disparate factors into your decision-making process in a reliable and rigorous way.

·         Use Paired Comparison Analysis to determine the relative importance of various factors. This helps you compare unlike factors, and decide which ones should carry the most weight in your decision.

·         Decision Trees are also useful in choosing between options. These help you lay out the different options open to you, and bring the likelihood of project success or failure into the decision making process.

·         For group decisions, there are some excellent evaluation methods available.

When decision criteria are subjective and it's critical that you gain consensus, you can use techniques like Nominal Group Technique and Multi-Voting. These methods help a group agree on priorities, for example, so that they can assign resources and funds.

The Delphi Technique uses multiple cycles of anonymous written discussion and argument, managed by a facilitator. Participants in the process do not meet, and sometimes they don't even know who else is involved. The facilitator controls the process, and manages the flow and organization of information. This is useful where you need to bring the opinions of many different experts into the decision-making process. It's particularly useful where some of these experts don't get on!

Step 5: Check Your Decision

With all of the effort and hard work that goes into evaluating alternatives, and deciding the best way forward, it's easy to forget to ‘sense check' your decisions. This is where you look at the decision you're about to make dispassionately, to make sure that your process has been thorough, and to ensure that common errors haven't crept into the decision-making process. After all, we can all now see the catastrophic consequences that over-confidence, groupthink, and other decision-making errors have wrought on the world economy.

The first part of this is an intuitive step, which involves quietly and methodically testing the assumptions and the decisions you've made against your own experience, and thoroughly reviewing and exploring any doubts you might have.

A second part involves using a technique like Blindspot Analysis to review whether common decision-making problems like over-confidence, escalating commitment, or groupthink may have undermined the decision-making process.

A third part involves using a technique like the Ladder of Inference to check through the logical structure of the decision with a view to ensuring that a well-founded and consistent decision emerges at the end of the decision-making process.

Step 6: Communicate Your Decision, and Move to Action!

Once you've made your decision, it's important to explain it to those affected by it, and involved in implementing it. Talk about why you chose the alternative you did. The more information you provide about risks and projected benefits, the more likely people are to support the decision.

And with respect to implementation of your decision, our articles on Project Management and Change Management will help you get this implementation off to a good start!

Problem solving

PROBLEM SOLVING

Problem solving is a mental process which is part of the larger problem process that includes problem finding and problem shaping. Considered the most complex of all intellectual functions, problem solving has been defined as higher-order cognitive process that requires the modulation and control of more routine or fundamental skills. Problem solving occurs when an organism or an artificial intelligence system needs to move from a given state to a desired goal state.

A managerial problem can be described as the gap between a given current state of affairs and a future desired state. Problem solving may then be thought of as the process of analyzing the situation and developing a solution to bridge the gap. While it is widely recognized that different diagnostic techniques are appropriate in different situations, problem solving as a formal analytical framework applies to all but the simplest managerial problems. The framework is analogous to the scientific method used in chemistry, astronomy, and the other physical sciences. In both cases, the purpose underlying the analytic process is to minimize the influence of the investigator's personal biases, maximize the likelihood of an accurate result, and facilitate communication among affected parties.

Problem solving was popularized by W. Edwards Deming and the expansion of the total quality management movement in the 1980s. While Deming described what he called the Shewhart cycle, the technique is more commonly known as the Deming Wheel or simply as the PDCA cycle. Regardless of the name, a problem solver is urged to follow a step-by-step approach to problem solving-plan, do, check, act (hence the PDCA acronym).

The first and most important step in problem solving is IDENTIFYING  the problem because unless we know a problem exists we cannot convert it into an OPPORTUNITY. Basically problem solving involves using generic methods, in an orderly manner, for finding solutions to problems.

THE PROBLEM-SOLVING FRAMEWORK

PROBLEM IDENTIFICATION.

Although business problems in the form of a broken piece of machinery or an irate customer are readily apparent, many problems present themselves in a more subtle fashion. For example, if a firm's overall sales are increasing, but its percentage of market share is declining, there is no attention-grabbing incident to indicate that a problem exists. However, the problem-solving framework is still helpful in analyzing the current state of affairs and developing a management intervention to guide the firm toward the future desired state. Therefore, a solid approach to problem solving begins with a solid approach to problem identification.

PROBLEM VERIFICATION.

The amount of resources that should be dedicated to verification will vary greatly depending upon how the problem itself is manifested. If the problem is straightforward and well-defined, only a cursory level of verification may be appropriate. However, many business problems are complex and ill defined. These situations may be similar to the case of a physician who is confronted with a patient that has self-diagnosed his medical condition. While considering the patient's claim, the doctor will conduct her own analysis to verify the diagnosis. Similarly, the need for verification is especially important when a manager is asked to step in and solve a problem that has been identified by someone else. The introduction of the manager's fresh perspective and the possibility of a hidden agenda on the part of the individual who initially identified the issue under consideration suggests that a "trust, but verify" approach may be prudent. Otherwise, the manager may eventually discover she has expended a great deal of time and effort pursuing a solution to the wrong problem

PROBLEM DEFINITION.

The next step in problem solving is to formally define the problem to be addressed. This is a negotiation between the individuals tasked with solving the problem and the individuals who over-see their work. Essentially, the parties need to come to an agreement on what a solution to the problem will look like. Are the overseers anticipating an implementation plan, a fully operational production line, a recommendation for capital investment, or a new product design? What metrics are considered important-cycle time, material costs, market share, scrap rates, or warranty costs? Complex problems may be broken down into mutually exclusive and collectively exhaustive components, allowing each piece to be addressed separately. The negotiation should recognize that the scope of the problem that is defined will drive the resource requirements of the problem solvers.

The more focused the problem definition, the fewer resources necessary to generate a solution. Finally, the time frame for problem analysis should also be established. Many business problems require an expedited or emergency response. This may mean that the problem solvers need to generate a temporary or interim solution to the problem before they can fully explore the underlying causes of the problem. Ensuring that the overseers recognize the limitations inherent in an interim solution serves to preserve the credibility of the problem solvers.

ROOT-CAUSE ANALYSIS.

Now that the problem has been formally defined, the next step is for the problem solvers to attempt to identify the causes of the problem. The ultimate goal is to uncover the root cause or causes of the problem. The root cause is defined as that condition or event that, if corrected or eliminated, would prevent the problem from occurring. However, the problem solver should focus on potential root causes they are within the realm of potential control. For example, finding that a particular weight of motor oil is insufficient to protect an engine from overheating readily leads to an actionable plan for improvement. Finding that the root cause of a problem is gravity does not.

A common technique for generating potential root causes is the cause-and-effect diagram (also known as the fishbone or Ishikawa diagram). Using the diagram as a brainstorming tool, problem solvers traditionally review how the characteristics or operation of raw materials, labor inputs, equipment, physical environment, and management policies might cause the identified problem. Each branch of the diagram then becomes a statement of a causal hypothesis. For example, one branch of the diagram might suggest that low salaries are leading to high employee turnover, which in turn results in inexperienced operators running the machinery, which leads to a high scrap rate and ultimately higher material costs. This analysis suggests that to address the problem of high material costs, the firm may have to address the root cause of insufficient salaries.

ALTERNATIVE GENERATION.

Once the root causes of the problem have been identified, the problem solver can concentrate on developing approaches to prevent, eliminate, or control them. This is a creative process. The problem solver should feel free to challenge assumptions about how business was conducted in the past. At times, an effective approach is to generalize the relationship between the cause and the problem. Then the problem solver can look for similar relationships between other cause and effects that might provide insight on how to address the issues at hand. In general, it is useful to attempt to generate multiple candidate solutions. By keeping the creative process going, even after a viable solution is proposed, the problem solver retains the possibility of identifying a more effective or less expensive solution to the problem.

EVALUATION OF ALTERNATIVES.

Assuming that the problem was well defined, evaluation of the effectiveness of alternative solutions should be relatively straightforward. The issue is simply to what extent each alternative alleviates the problem. Using the metrics previously identified as important for judging success, the various alternatives can generally be directly compared. However, in addition to simply measuring the end result, the problem solvers may also want to consider the resources necessary to implement each solution. Organizations are made up of real people, with real strengths and weaknesses. A given solution may require competencies or access to finite resources that simply do not exist in the organization. In addition, there may be political considerations within the organization that influence the desirability of one alternative over another. Therefore, the problem solver may want to consider both the tangible and intangible benefits and costs of each alternative.

IMPLEMENTATION.

A very common problem-solving failure is for firms to stop once the plan of action is developed. Regardless of how good the plan is, it is useless unless it is implemented. Therefore, once a specific course of action has been approved, it should continue to receive the necessary attention and support to achieve success. The work should be broken down into tasks that can be assigned and managed. Specific mile-stones with target dates for completion should be established. Traditional project management techniques, such as the critical path method (CPM) or the program evaluation and review technique (PERT) are very useful to oversee implementation efforts.

POST-IMPLEMENTATION REVIEW.

Another common failure is for firms to simply move on after a solution has been implemented. At a minimum, a post-implementation evaluation of whether or not the problem has been solved should be conducted. If appropriate and using the metrics that were established earlier, this process should again be relatively straightforward-were the expected results achieved? The review can also determine whether additional improvement activities are justified. As the PDCA cycle suggests, some problems are never solved, they are only diminished. If the issue at hand is of that nature, then initiating a new cycle of problem-solving activity may be appropriate.

A secondary consideration for the post-implementation review is a debriefing of the problem solvers themselves. By its very nature, problem solving often presents managers with novel situations. As a consequence, the problem-solving environment is generally rich in learning opportunities. To the extent that such learning can be captured and shared throughout the organization, the management capital of the firm can be enhanced. In addition, a debriefing may also provide valuable insights into the firm's problem-solving process itself. Given the firm's unique competitive environment, knowing what worked and what did not may help focus future problem-solving initiatives.

INSTITUTIONALIZATION AND CONTROL.

The final step in problem solving is to institutionalize the results of the initiative. It is natural for any system to degrade over time. Therefore, any changes made as a result of the problem-solving effort should be locked in before they are lost. This might entail amending policy manuals, establishing new control metrics, or even rewriting job descriptions. In addition, the firm should also consider whether the problem addressed in the initiative at hand is an isolated incident or whether the solution can be leveraged throughout the organization. Frequently, similar problems are present in other departments or other geographic locations. If this is the case, institutionalization might involve transferring the newly developed practices to these new settings.

Alibaba Group and Organizational culture

Company Overview

Alibaba Group is a family of Internet-based businesses which makes it easy for anyone to buy or sell online anywhere in the world. Since its inception, it has developed leading businesses in consumer e-commerce, online payment, business-to-business marketplaces and cloud computing, reaching Internet users in more than 240 countries and regions. Alibaba Group consists of 25 business units and is focused on fostering the development of an open, collaborative and prosperous e-commerce ecosystem.

Alibaba Group was founded in 1999 by 18 people led by Jack Ma, a former English teacher from Hangzhou, China who has aspired to help make the Internet accessible, trustworthy and beneficial for everyone. The privately held Alibaba Group, including its affiliated entities, employs some 24,000 people around the world and has more than 70 offices in Greater China, India, the United Kingdom and the United States.

Alibaba Group’s major businesses and affiliated entities include:

Alibaba.com International- Leading global e-commerce platform for small businesses

Launched in 1999, Alibaba.com International (www.alibaba.com) is the leading global e-commerce platform for small businesses around the world. It aims to be the go-to English-language platform for cross-border trade and help small businesses worldwide expand to overseas markets. As of December 31, 2012, the platform had around 36.7 million registered users from more than 240 countries and regions and showcased more than 2.8 million supplier storefronts.

Alibaba.com International is a business within Alibaba Group.

Alibaba.com China - Leading domestic e-commerce platform for Chinese small businesses

Launched in 1999, Alibaba.com China (www.alibaba.cn) is China’s leading e-commerce platform for small businesses engaged in domestic trade. It aims to provide Chinese small businesses with a comprehensive domestic e-commerce solution that comprises more than product listing, sourcing and large-quantity wholesale services. As of December 31, 2012, the platform had around 77.7 million registered users and showcased more than 8.5 million supplier storefronts.

Alibaba.com China is a business within Alibaba Group.

History & Milestones

1999	Alibaba Group is officially established by its 18 founders, led by Jack Ma, working out of a Hangzhou apartment.
1999-2000	Alibaba Group raises US$25 million from Softbank, Goldman Sachs, Fidelity, and other institutions.
2002	Alibaba.com becomes profitable.
2003	Consumer e-commerce website Taobao is founded, again in Jack Ma's apartment. Online payment system Alipay is launched.
2005	Alibaba Group forms a strategic partnership with Yahoo! Inc. and takes over the operation of China Yahoo!.
2006	Alibaba Group makes a strategic investment in Koubei.com.
2007	Internet-based business software company Alisoft is launched. (January) Alibaba.com Limited lists on the Hong Kong Stock Exchange. (November) Alibaba Group launches Alimama, an online advertising exchange company. (November)
2008	Taobao Mall (currently known as Tmall.com), a dedicated B2C platform, is introduced to complement Taobao’s C2C marketplace. (April) Koubei.com merges with China Yahoo! to form Yahoo! Koubei. (June) Alimama is integrated with Taobao. (September) Alibaba Group R&D Institute is established. (September)
2009	Alisoft merges with Alibaba Group R&D Institute. (July) Alisoft's Business Management Software division is injected into Alibaba.com. (August) Koubei.com is injected into Taobao as part of the "Big Taobao" strategy, which positions Taobao as a one-stop e-commerce service provider to promote wider use of e-commerce among consumers. (August) Alibaba Cloud Computing is established in conjunction with Alibaba Group's 10th anniversary celebration. (September)
2010	Alibaba Group creates a cross-business team comprising senior managers from Taobao, Alipay, Alibaba Cloud Computing and China Yahoo! to execute a full-scale roll-out of the "Big Taobao" strategy. (March) Alibaba Group announces that it will begin in 2010 to earmark 0.3 percent of annual revenues to fund efforts designed to spur environmental awareness and conservation in China and around the world. (May) Taobao Mall launches a new independent web domain, Tmall.com. (November)
2011	Alibaba Group announces its plan to build a network of warehouses across China and, together with its partners, drive major investment in logistics development in the country. (January) Alibaba Group reorganizes Taobao into three separate companies, Taobao Marketplace, Tmall.com and eTao, to capture the Chinese consumer e-commerce opportunities. (June)
2012	Tmall.com changes its Chinese name to strengthen its positioning as a source of high-quality, brand-name products. (January) Alibaba.com delists from the Hong Kong Stock Exchange. (June) Alibaba Group upgrades its existing subsidiaries’ operations into one of the seven business groups: Alibaba International Business Operations, Alibaba Small Business Operations, Taobao Marketplace, Tmall.com, Juhuasuan, eTao and Alibaba Cloud Computing. (July) Alibaba Group completes the initial repurchase of shares from Yahoo! and restructured its relationship with the latter. (September) Taobao Marketplace and Tmall.com reach a combined GMV of RMB1 trillion for the period January to November 2012. (November)
2013	Alibaba Cloud Computing merges with HiChina. (January) Alibaba Group is reorganized into 25 business units to better adapt to China’s fast-growing e-commerce environment. (January)

source (http://news.alibaba.com/specials/aboutalibaba/aligroup/index.html)

 Organizational culture is the behavior of humans who are part of an organization and the meanings that the people attach to their actions. Culture includes the organization values, visions, norms, working language, systems, symbols, beliefs and habits. It is also the pattern of such collective behaviors and assumptions that are taught to new organizational members as a way of perceiving, and even thinking and feeling. Organizational culture affects the way people and groups interact with each other, with clients, and with stakeholders.

Organizational culture are of several types. The one discussed in class are as follows:

1. Open Culture - 

One where employees are motivated to voice their values-driven concerns regarding problematic business practices. An open culture helps to counteract any occasional lapse into passivity at the board level or on the part of institutional investors.

2. Safety Culture - 

One where safety is  ALWAYS first no matter what the cost. A safety culture is one were all employees are proactive in ensuring safety at work place. People immediately report any perceived short comings in the work place safety and in the safety of products given to customers or clients.

3. Quality Culture -

A culture where utmost importance is given to the quality of the product or service being rendered. Volume takes a back seat. So does cost. Batch recalling of cars/computers when defects are found is a good example of the quality culture. Toyota is a notable example.

4. Performance Culture -

We could also call this OUTCOME ORIENTED CULTURE.  This is one that emphasize achievement, results, and action as important values. A good example of an outcome-oriented culture may be the electronics retailer Best Buy. Having a culture emphasizing sales performance, Best Buy tallies revenues and other relevant figures daily by department. Employees are trained and mentored to sell company products effectively, and they learn how much money their department made every day.

VALLEY CROSSING- TEAMWORK EXERCISE

The Valley Crossing Exercise aptly portrays the importance of teamwork in performing any activity, e.g. team formation, team norms, competition, cooperation etc.

This time Dr. Mandi asked us to perform valley crossing  in a group of three. At first I thought it was more of a team building activity, but slowly & gradually I realized the importance of the same.

To understand the task better, let's take a look on the video of valley crossing that was performed by our seniors (IM19 batch)..

OBJECTIVE

There are three people trying to cross a valley. The gap of the valley is in the range of one foot to two feet. Assume that each of them has the same footstep. They have a rod of a convenient size and they have to cross the valley using the rod as a support. Direct jumping is considered fatal assuming the valley is fathomless.

Now we can break up the task into 9 sub tasks:

In various levels of this task the team members needed to consider the following aspects:

Brainstorming : What should be exact position of holding the rod..? such reasoning will definitely help in better performance.

Communication : It meant that the team mates discuss the problem and communicate their issues to the superiors as well as to their peers. They must have a clear understanding of the situation before attempting the task.

Conflicts : Optimizing different opinion and come up with a most feasible solution and come up with one member that should lead the group.

Clearly defined standards : Team members must know what is expected of them individually in quantitative terms and not qualitative and vague terms like "positive attitude" and "high growth", as these words are ambiguous in their meaning.

Commitment : “Individual commitment to a group effort -- that is what makes a team work, a company work, a society work, a civilization work.”

LESSONS:

TEAM WORK:   The essence of Team Work lies in understanding the strengths and weaknesses of every team member and utilizing them to achieve optimum efficiency.

EFFECTIVE STRATEGY IMPLEMENTATION-  Strategy and planning are futile without effective implementation.

TRAINING- Proper training is essential to achieve the desired level of results.

GOAL- There should be a well defined goal and every team member should have absolute clarity about it.

TRUST-  Mutual trust and belief are the foundation of a good team.

LEADERSHIP- Leadership and team work aren’t two separate entities. Collective leadership from the team delivers optimum results.

ACCOUNTABILITY AND RESPONSIBILITY- Every team member is accountable and responsible for the job at hand.

INNOVATION- There has to be openness in terms of new ideas and suggestion.

Muhammad Yunus and the Grameen Bank

Muhammad Yunus

Muhammad Yunus (Bengali: মুহাম্মদ ইউনূস; born 28 June 1940) is an Bangladeshi banker, economist and Nobel Peace Prize recipient. As a professor of economics, he developed the concepts of microcredit and microfinance. These loans are given to entrepreneurs too poor to qualify for traditional bank loans. In 2006 Yunus and Grameen Bank received the Nobel Peace Prize "for their efforts through microcredit to create economic and social development from below". Yunus has received several other national and international honours. He was awarded the U.S. Congressional Gold Medal in 2010, and presented with it at a ceremony at the U.S. Capitol on 17 April 2013.

In 2008, he was rated #2 in Foreign Policy magazine's list of the 'Top 100 Global Thinkers'.

In 2012, he became Chancellor of Glasgow Caledonian University in Scotland. He is a member of the advisory board at Shahjalal University of Science and Technology. Previously, he was a professor of economics at Chittagong University in Bangladesh. He published several books related to his finance work. He is a founding board member of Grameen America and Grameen Foundation, which support microcredit.

Yunus also serves on the board of directors of the United Nations Foundation, a public charity created in 1998 by American philanthropist Ted Turner’s $1 billion gift to support UN causes.

In March 2011, the Bangladesh government fired Yunus from his position at Grameen Bank, citing legal violations and an age limit on his position. Bangladesh's High Court affirmed the removal on 8 March. Yunus and Grameen Bank are appealing the decision, claiming Yunus' removal was politically motivated.

The Bangladesh Government forced Muhammad Yunus to resign from Grameen Bank, saying that at age 72, he was years beyond the legal limit for the position

Grameen Bank

The Grameen Bank (Bengali: গ্রামীণ বাংক) is a Nobel Peace Prize-winning microfinance organization and community development bank founded in Bangladesh. It makes small loans (known as microcredit or "grameencredit") to the impoverished without requiring collateral. The name Grameen is derived from the word gram which means "rural" or "village" in the Bengali language.

Micro-credit loans are based on the concept that the poor have skills that are under-utilized, and with incentive, they can earn more money. A group-based credit approach is applied to use peer-pressure within a group to ensure the borrowers follow through and conduct their financial affairs with discipline, ensuring repayment and allowing the borrowers to develop good credit standing. The bank also accepts deposits, provides other services, and runs several development-oriented businesses including fabric, telephone and energy companies. The bank's credit policy to support under-served populations has led to the overwhelming majority (98%) of its borrowers being women.

Grameen Bank originated in 1976, in the work of Professor Muhammad Yunus, Professor at University of Chittagong, who launched a research project to study how to design a credit delivery system to provide banking services to the rural poor. Based on his positive results, in October 1983 the Grameen Bank was authorized by national legislation as an independent bank. In 2006, the bank and its founder, Muhammad Yunus, were jointly awarded the Nobel Peace Prize. In 1998 the Bank's "Low-cost Housing Program" won a World Habitat Award. 

16 Decisions important taken by Grameen Bank

1. We shall follow and advance the four principles of Grameen Bank: Discipline, Unity, Courage and Hard work – in all walks of our lives.
2. Prosperity we shall bring to our families.
3. We shall not live in dilapidated houses. We shall repair our houses and work towards constructing new houses at the earliest.
4. We shall grow vegetables all the year round. We shall eat plenty of them and sell the surplus.
5. During the planting seasons, we shall plant as many seedlings as possible.
6. We shall plan to keep our families small. We shall minimize our expenditures. We shall look after our health.
7. We shall educate our children and ensure that they can earn to pay for their education.
8. We shall always keep our children and the environment clean.
9. We shall build and use pit-latrines.
10. We shall drink water from tube-wells. If it is not available, we shall boil water or use alum.
11. We shall not take any dowry at our sons' weddings, neither shall we give any dowry at our daughters' weddings. We shall keep our center free from the curse of dowry. We shall not practice child marriage.
12. We shall not inflict any injustice on anyone, neither shall we allow anyone to do so.
13. We shall collectively undertake bigger investments for higher incomes.
14. We shall always be ready to help each other. If anyone is in difficulty, we shall all help him or her.
15. If we come to know of any breach of discipline in any center, we shall all go there and help restore discipline.
16. We shall take part in all social activities collectively.

SUMMARY

	TRADITIONAL BANKING	GRAMEEN BANK
Purpose	Maximising Profit	To reduce Poverty
Collateral	Without Collateral security no loans will be given.	No collateral needed
Ownership	Businessmen – Rich People	By the Poor
Loan Amount	Large Amounts	Very Small Amounts
Type of Lending	To individuals	To small groups of people –Solidarity lending
Type of Interest	Usually Interest is compounded	Simple Interest
People Money given to	In most developing countries there seem to be a bias towards men.	Women are the primary focus. In fact women make up 97% of Grameen Bank Customers
Location	Primarily located in urban areas	Primarily located in rural areas

Hidden Management treasure in Navarang Puzzle

The Navarang Puzzle

This time Dr. Mandi came into the class with a multicolored cube, which at first I thought is a Rubik's Cube. That day I was first introduced to the Navarang puzzle.

The Navarang Puzzle

Unlike a standard Rubik's Cube, the Navrang Puzzle can be dismanteled and reassembled. Then Dr. Mandi started throwing dismantled pieces of this cube to students sitting around him. There were 27 Pieces in total.

Rubik's Cube

Now he gave us a challenge to find an algorithm or method to reassemble the Puzzle. According to him the challenge was...

Challenge

You should fix all the 27 blocks in to a systematic ‘Cube’  of 3 x 3 x 3 = 27  blocks where in:

All the nine colours must be represented

in each of the six sides of the final 3 X 3 X 3 Cube.

Said in other words:

No two same colours can appear

on the same side of the 3 X 3 X 3 Cube you are trying to make.

This challenge is called ‘ Navrang – Nine Colors’ puzzle .

(source: http://nnhyderabad.blogspot.in/2013/07/navrang-puzzle-what-to-learn-from-it.html )

But then Prof. Mandi solved the Puzzle in about 2 minutes using an well-defined method. Sir had used a 3-step algorithm to solve the puzzle.

The Navarng cube is a great example to define unity of command. Why Is It Important???

The principle of unity of command is applied throughout the world today in organizations ranging from the military, government bureaucracies and companies, from a small business all the way up to multinational corporations. Learning about unity of command will help us to understand how a great, many of private and public organizations operate and may make you a better employee or manager. Unity of Command is one of the Henri Fayol's 14 principles of Management. The 14 principles are..

1. Division of Work
2. Discipline
3. Authority and responsibility
4. Subordination of Individual Interest to General Interest
5. Remuneration
6. Centralisation
7. Order
8. Equity
9. Initiative
10. Esprit De Corps (Team Spirit)
11. Stability of Tenure
12. Unity of Direction
13. Scalar Chain
14. Unity of Command

Definition & Principles

Unity of command provides that an employee is responsible to only one supervisor, who in turn is responsible to only one supervisor, and so on up the organizational hierarchy. This is true even if the top of the organization is led by a group of people. For example, imagine you are the CEO of a technology firm in Silicon Valley. While the board of directors of your company governs the policy making and strategic planning, under the concept of unity of command, you do not answer to all members of the board but only the chairman of the board.

Summary

Unity of command is a classic principle of management that is used in many hierarchical organizations, such as the military, government agencies, and corporations. Unity of command holds that an employee should only be answerable to one person. Management authority is vested in the position and as a manager climbs up the hierarchy, she is able to use prior knowledge and information gained in the new management position.