Decisions
- 3. 6–3
- 4. Outline of the presentation •Define decision •Decision-making process. •Types of decisions •Basis on which decision is taken •Issues in decision making •Describe the eight steps in the decision- making process. •Style of decision making •Characteristics of decision making •References
- 5. 5 Decisions • A decision is a choice from among the available alternatives • Judgment - the “thinking” aspects of the decision-making process • A choice made between alternative courses of action in a situation of uncertainty. the act or process of deciding • a determination arrived at after consideration
- 6. 6 Decisions making •Decision making - the process by which managers respond to opportunities and threats by analyzing options, and making decisions about goals and courses of action
- 7. 7 Types of Problems and Decisions • Problem Types Well-structured: routine, repetitive, normal problems with much certainty regarding cause-and-effect relationships Ill-structured: novel, unknown criteria, have not been encountered before • Decision Types Programmed: a decision that is repetitive and routine, with a definite procedure developed for handling it - use management science, computations, and rules Non-programmed: no pre-programmed answer exists because the problem is complex, extremely important, and/or never before experienced - reliance is placed on principles and processes with emphasis on judgment, intuition and creativity
- 8. DECISION INGREDIENTS • FACTS • KNOWLEDGE • EXPERIENCE • ANALYSIS • JUGDEMENT
- 9. KEY ELEMENTS IN A DECISION • DECISION BODY (AUTHORITY TO MAKE DECISION) • DECISION OPTIONS • UNCONTROLLABLE FACTORS • CONSEQUENCES OF EACH OPTION
- 10. ISSUE INVOLVED IN DECISION MAKING • PREJUDICE • SHOWMANSHIP • ANALOGY • TRANSFER • IRRELEVANT INFORMATION • FACTS • INFORMATION SOURCES • FAMILIARITY
- 11. CHALLENGES FOR DECISION MAKERS • COMPLEXITY • UNCERTAINITY • DIFFERENT INFORMATION PROCESSING STYLES
- 12. ENVIRONMENT OF DECISION MAKING • TECHNICAL • LEGAL • POLITICAL • ECONOMIC • DEMOGRAPHIC • ECOLOGICAL • CULTURAL
- 13. 6–13 8 Step Decision-Making Process EXHIBIT 4.2
- 14. 6–14 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 pressure to solve the problem. The manager must have the authority, information, or resources needed to solve the problem.
- 15. 6–15 Step 2: Identifying Decision Criteria • Decision criteria are factors that are important (relevant) to resolving the problem. Costs that will be incurred (investments required) Risks likely to be encountered (chance of failure) Outcomes that are desired (growth of the firm) 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.
- 16. 6–16 Step 4: Developing Alternatives • Identifying viable alternatives Alternatives are listed (without evaluation) that can resolve the problem. 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 steps 2 and 3.
- 17. 6–17 Step 6: Selecting an Alternative • Choosing the best alternative The alternative with the highest total weight is chosen. Step 7: Implementing the Decision • Putting the chosen alternative into action. Conveying the decision to and gaining commitment from those who will carry out the decision.
- 18. 6–18 Step 8: Evaluating the Decision’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 resolved, what went wrong?
- 19. 6–19 Decision-Making Styles (cont’d) • Types of Decision Makers Directive Use minimal information and consider few alternatives. Analytic Make careful decisions in unique situations. Conceptual Maintain a broad outlook and consider many alternatives in making long-term decisions. Behavioral Avoid conflict by working well with others and being receptive to suggestions.
- 20. 6–20 Characteristics of an Effective Decision- Making Process • It focuses on what is important. • It is logical and consistent. • It acknowledges both subjective and objective thinking and blends analytical with intuitive thinking • It requires only as much information and analysis as is necessary to resolve a particular dilemma. • It encourages and guides the gathering of relevant information and informed opinion. • It is straightforward, reliable, easy to use, and flexible.
- 21. References • Robbins, S. Coulter M. (2010). Management. USA: Prentice Hall. • https://smallbusiness.chron.com • https://www.emergenetics.com • https://2012books.lardbucket.org • http://www.assignmentpoint.com • https://managementstudyguide.com • https://www.mindtools.com