Decision making1
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This document discusses organizational decision making and problem solving. It defines organizational decision making as responding to problems by selecting solutions that benefit stakeholders. There are two types of decisions: programmed, which are routine, and non-programmed, which are unique. Problems can be structured with clear goals and familiarity or unstructured with ambiguity. The eight-step decision making process is outlined, including identifying the problem, criteria, alternatives, analysis, selection, implementation, and evaluation. Decision making can occur under conditions of certainty or risk.
Decision making1
- 1. 08/01/16 Confidential to SoftTech Engineers Pvt. Ltd. Decision Making- An essence to problem solving
- 2. 08/01/16 Confidential to SoftTech Engineers Pvt. Ltd. Organisational Decision making “ the process of responding to a problem by searching for and selecting a solution or course of action that will create value for organisational stakeholders”. There are basically two kinds of decision that managers called upon to make: Programmed and non-programmed
- 3. 08/01/16 Confidential to SoftTech Engineers Pvt. Ltd. Types of Problems and Decisions Structured problems * Involved goals that clear. *Are familiar(have occurred before) *Are easily and completely defined- information about the problem is available and complete. Programmed decision *A repetitive decision the can be handled by a routine approach.
- 4. 08/01/16 Confidential to SoftTech Engineers Pvt. Ltd. Problems and Decisions ( cont’d) Unstructured problems * Problems that are new or unusual and for which information is ambiguous or incomplete. * Problems that will require custom-made solutions. Non-programmed decisions * Decision that are unique and non recurring. * Decision that generate unique responses.
- 5. 08/01/16 Confidential to SoftTech Engineers Pvt. Ltd. Types of Programmed Decisions Policy * a general guideline for making a decision about a structured problem. Procedure * A series of interrelated steps that a manager can use to respond ( applying a policy) to a structured problem. Rule * an explicit statement that limits what a manager or employee can or cannot do.
- 6. 08/01/16 Confidential to SoftTech Engineers Pvt. Ltd. The Decision-Making Process • Identify a problem and decision criteria and allocating weights to the criteria. • Developing, analyzing, and selecting an alternative that can resolve the problem. • Implemented and selected alternatives. • Evaluating the decision’s effectiveness.
- 7. 08/01/16 Confidential to SoftTech Engineers Pvt. Ltd. Step 1: Identifying the Problem Problem * A discrepancy between an existing and desired state of affairs. Characteristics of Problems * A problem becomes a problem when a manager becomes aware of it. * there is a pressure to solve the problem. * the manager must have the authority,information, or resources needed to solve the problem.
- 8. 08/01/16 Confidential to SoftTech Engineers Pvt. Ltd. Step 2: Identify the Decision Criteria Decision criteria are factors that are important ( relevant) to resolving the problem. * Costs that will be incurred (investment required). * Risks likely to be encountered ( chance of failure). * Outcomes that are desired ( growth of the firm).
- 9. 08/01/16 Confidential to SoftTech Engineers Pvt. Ltd. Step 3: Allocating Weights to the Criteria Decision criteria are not of equal importance: * Assigning a weight to each item. * Places the items in the correct priority order of their importance in the decision making process.
- 10. 08/01/16 Confidential to SoftTech Engineers Pvt. Ltd. Step 4: Developing Alternatives Identifying viable alternatives. * Alternatives are listed ( without evaluation) that can resolve the problem.
- 11. 08/01/16 Confidential to SoftTech Engineers Pvt. Ltd. Step 5 :Analyzing alternatives Appraising each alternative’s strengths and weaknesses * An alternative’s appraisal is based on its ability to resolve the issues identified in step 2 and step3.
- 12. 08/01/16 Confidential to SoftTech Engineers Pvt. Ltd. Step 6: selecting the alternative Choosing the best alternative * The alternative with the highest total weight is chosen
- 13. 08/01/16 Confidential to SoftTech Engineers Pvt. Ltd. Step 7: Implementing the Alternative Putting the decision to and gaining comment from those whose will carry out the decision.
- 14. 08/01/16 Confidential to SoftTech Engineers Pvt. Ltd. Step 8: Evaluating thedecision’s effectiveness The soundness of the decision is judged by its outcomes. * How effectively was the problem resolved by outcomes resulting from the chosen alternatives? * if the problem was not resolve, what went wrong?
- 15. 08/01/16 Confidential to SoftTech Engineers Pvt. Ltd. Decision Making Conditions Certainty * A situation in which a manager can make an accurate decision because the outcome of every alternative choice is known. Risk * A situation in which the manager is able to estimate the likelihood (probability) of outcomes that result from the choice of particular alternatives.
- 16. 08/01/16 Confidential to SoftTech Engineers Pvt. Ltd. Thank You.....