07-11-2012, 01:26 PM
Decision MakingThe essence of the Manager’s Job
1Decision Making.ppt (Size: 4.19 MB / Downloads: 36)
Decision Making Process
Identification of problem
Identification of decision criteria
Allocation of weights to criteria
Development of alternatives
Analysis of Alternatives
Selection of an alternative
Implementation of the alternative
Evaluation of Decision effectiveness
Step 1 - Identifying a Problem
• problem - discrepancy between an existing and a desired state of affairs
– must be such that it exerts pressure to act
– manager is unlikely to characterize a situation as a
problem unless s/he has resources necessary to act
Conditions to make rational Decision
Manager faces simple problem
Goals are clear & alternatives limited
Time pressure is low
Cost of evaluating alternatives is low
OC supports innovation & risk taking
Outcomes are concrete & measurable
How are Decision Made?
Intuitive Decision making
Called as “Gut feeling”, decision based on
experiences, feelings, and accumulated judgments
Different aspects of Intuition
Experience based decision
Affect initiated decision
Cognitive based decision
Value or ethics based decision
Subconscious mental processing
Policies, Procedures, Rules
Policies
Is a guideline for making a decision
Procedure
Is a series of interrelated sequential steps that a manager can use to respond to a structured problem
Rules
Is an explicit statement that tells manager what he can & cannot do.
Effective decision making process
Six characteristics
It focuses on what's important
It is logical & consistent
It blends both analytical & intuitive thinking
Information & analysis relevant enough to solve the problem
Encourages gathering information
Straightforward, reliable, easy to use & flexible