Managerial tools - Decision making techniques

 Realize the need for decision-making from many perspectives and
will be able to factor in control discussion with each decision.
The participant will be able to :
Terminal Objectives

 Apply the steps in the decision-making process.
 Acknowledge barriers that may prevent people to define problems correctly.
 Determine the 4 styles of Decision Making
 Identify why people can not reach agreement through “Abilene Paradox” movie
and how to overcome it.
 Use some techniques for making managerial decisions like Six thinking hats
 Use at least 2 methods of decision making in groups
The participant will be able to :
Specific Objectives

Decision Taking
Or
Decision Making??

Why we need to take a Decision ?
Improveme
nt
Problem

• Some difficulty that we can’t
understand .
• A state of disorder .
Problem Definitions

Types of Problems
Routine
Crisis
Opportunity

Managerial Decisions Types
Non-
Programmed
Programm
ed
Problem
Procedu
re
- Repetitive
- Routine
- Rules
- Policies
- Complex
- Long Time
Creative
Problem solving

Problem Solving
It
is Tool Skill Process

To Make a Decision you
Need to know:
• The nature of the problem.
• The time available.
• The cost of individual strategies.

Decision making process
• Experience .
• Watching .
• Trial & Errors.
• The scientific method of decision making.
Methods of Decision Making

1 2 3 4 5
Recognize
and analyze
the problem
Gather
Data
Choose a
solution
and Take
Action
Determining
Workable
Solutions
Evaluate
Solutions
6
Follow
Up
Problem Solving process

Recognize and analyze the problem
Step 1
 Working on the right problem .
 Analyze the cause and symptoms for
the problem .

Blocks to problem definition
1) Previous Learning
2) Ambiguity
3) Defining the problem by solution.
4) Identifying symptoms as problems.
5) Artificial boundaries
6) Perceptual problems
7) Solving the wrong problem

Previous learning
• Learning influences what we see and hear .
• “ We have always done it that way” is one of the
biggest blocks to effective analysis.
• The unwillingness or inability to let go of old habits
can be a major stumbling block to seeing problems.

Ambiguity
• Looking at the same information, two people can see different things.
• Not just enough to get data, they must describe the problem
meaningfully.

Ambiguity

Defining the problem by solution
• Jumping to conclusion .

Identifying symptoms as problem

Artificial boundaries
Test your assumptions about the
boundaries of the problem

Perceptual problems
• Not recognising problems .
• Mistaken cause and effect .

Solving the wrong problem

Determining Workable Solutions
Step 2
 What are the alternatives
 Brainstorming
 List all the possible solution

Decision making process
Gather Data
Step 3
 There are data for all the stages .
 Obtain data by asking, observing, &
studying .
 Be specific about who , what, when &
how .

Evaluate Solutions
Step 4
The alternatives-outcomes relationship is based on three possible
conditions:
 Certainty
 Risks
 Uncertainty

Choose a Solution and Take Action
Step 5

Follow Up
Step 7

Reasons for poor Decision Making
• Why people fail sometimes to take a good
decision?
1. No enough time to gather all the information
2. It is easier to stay in the same course
• Less time consuming
• Fewer risk
• Requires no changes
3. They are insecure
4. Afraid of change – change involves risk

5. They lack the courage
6. Poor self concept
7. Over reliance on logic and ignoring the common
sense or gut feeling
8. lack of experience
9. Other personality issues:
• Hostility
• Negativism
• Prejudgment
• Arrogance
• Poor motivation

•10. Poor habits
• Delay
• Digging into details
• Lack of delegation
•11. Other personal factors:
• Individuals value system
• Individuals’ role perception
• What is the individual thinks others
expecting of them

Methods of Group Decision Making
Decision by Authority
without Discussion
Expert Member
Decision by Authority
with Discussion
Consensus
Majority Control
Minority Control

Decision by authority WITHOUT discussion
1

• Useful for simple routine
decision.
• When group members expect
the designated leader to make
decision.
• Used when team members lack
skills and information
Advantages
Decision by authority WITHOUT discussion
1
• One person is not a good
resources for every decision.
• Advantages of group interaction
are lost.
• Resources of other members are
not used.
Disadvantages

Decision by authority AFTER discussion
2
Decision by authority WITH discussion
2

• Uses the resources of group
members.
• Gain benefits of group discussion.
Advantages
• Does not resolve the controversies
and conflicts among group
members.
• Create a kind of nepotism.
Disadvantages
Decision by authority WITH discussion
2

Decision by Expert Members
3

• Useful when the expertise of one
person so far superior to that of
all other group members.
Advantages
• It is difficult to determine who the
expert is.
are lost.
• Resources of other members are
not used.
Disadvantages
Decision by Expert Members
3

Decision by Majority Control
4

• Can be used when sufficient time
is lacking for decision by
consensus.
• When complete member
commitment is not necessary of
implementing decision .
Advantages
• Usually leaves an alienated
minority which damages future
group effectiveness.
are lost.
Disadvantages
Decision by Majority Control
4

Decision by Minority
5

• When everyone cannot meet to
make a decision.
• When the group is under time
pressure.
• When complete member
commitment is not necessary.
Advantages
• Does not utilize the resources of
many group members.
• Unresolved conflict may damage
future group effectiveness.
Disadvantages
Decision by Minority
5

Decision by Consensus
6

• Produces an innovative, creative,
and high-quality decision.
• Elicits commitment by all
members to implement decision .
• Uses resources of all members
Advantages
• Takes a great deal of time and
energy.
• Not useful in emergency situation.
Disadvantages
Decision by Consensus
6

Decision
Making Styles
Assessment

Decision Making Styles
Way of Thinking
High
Low
Rational Intuitive
Tolerance
for
Ambiguity
Analytical Conceptual
Directive Behavioral

Directive Style
Analytical Style
Conceptual Style
Behavioral Style
 People who prefer simple, clear-cut solutions to problems
 Make decisions quickly
 May consider only one or two alternatives
 Efficient and rational
 Prefer rules or procedures

Directive Style
Analytical Style
Conceptual Style
Behavioral Style
 Complex solutions based on as much data as they can
gather
 Carefully consider alternatives
 Base decision on objective, rational data
 Search for best possible decision based on information
available

Directive Style
Analytical Style
Conceptual Style
Behavioral Style
 More socially oriented
 Consider others about the problem and possible solutions
 Consider many broad alternatives and information
 Rely on information from people and systems
 Solve problems creatively

Directive Style
Analytical Style
Conceptual Style
Behavioral Style
 Deep concern for others
 Talk to people one-on-one
 Understand individual feelings about the problem and
possible effects.
 Concerned with the personal development of others
 Decisions to help others achieve their goals

Pros &
Cons
Six
Thinking
Hats
Decision Making Techniques

1- Simple “Pros & Cons” method

• This method can be used to evaluate a decision to be taken
or not. “Pros” means the advantages, while “Cons” means
the disadvantages.
• Giving a score from 1 to 5 to weight each Pro & Con
• Then add the scores for Pros & scores for Cons
• Compare which one will be greater
• If the “Pros” score, then take the decision…otherwise don’t
Your scores are just estimation from your point of view and
depend on your personal preferences

Example: I want to buy a new car instead of the old one
Pros Score Cons Score
Better Comfort 3 Cost outlay will mean making sacrifice 5
Lower Fuel Cost 3 Higher Insurance 3
Lower Servicing Cost 4 Disposal of old car 2
Better reliability 3 Time & hassle 2
Better for family use 5 Big Decision scare me 4
Load off my mind 2
Total 20 Total 16

Edward De Bono
SIX THINKING HATS

Introduction :-
Why hats ?
Why 6 ?
Why colors ?

What are the 6 colors of Hats?

• Helps you look at important decisions from several different
perspectives.
• Reduce the resistance to change and prepared by essential
contingency plans.
• It helps you understand the full complexity of a decision.
• It spots issues and opportunities which you might not
notice.
The Advantages

Suggestion for good decision making
1. Have your goals clearly in mind or in written form before you
proceed to formulate your options.
2. Establish your priorities so that every decision contributes
toward goal achievement
3. Be more creative as possible .Look for group of ideas.
4. Decision-making is simply a mental exercise which must be
transferred into action.
5. Each decision has the potential of causing a chain of reactions.
6. Don’t be quick to reopen decisions already made.
7. Use a simulation exercise or a trial run to determine
correctness.

Managerial tools - Decision making techniques

More Related Content

Similar to Managerial tools - Decision making techniques (20)

Recently uploaded (20)

Managerial tools - Decision making techniques

Editor's Notes