Decisionmaking Management

Management
Decision Making
Aim
 To Acquaint The
Students With Steps
Involved In Decision
Making Process &
Factors Influencing
Decision Making
Part – 1
What is Decision Making
 It is the process of recognizing a

problem, generating an weighing
alternatives, coming to a decision,
taking action , and assessing the
results
Types of Problems
 Crisis Problems
 Non Crisis Problems
 Opportunity Problems
Types of Decisions & Conditions of
Decision Making
 Types of Decisions
 Programmed Decisions
 Nonprogrammed Decisions
 Conditions of Decision Making
 Certainty
 Risk
 Uncertainty
 Ambiguity
Level & Scope of Organizational
Decision Making
Part – 2
Three Managerial Decision Making Model
Part – 3
Steps In Rational Decision Making
Process
(6) Evaluate
(1) Identify The
The Results
Problem
and Provide
Feed Back
(5) Implement The (2) Generate

Decision Alternatives
(4) Make The (3) Evaluate

Decision Alternatives
Part – 4
MORE EFFECTIVE DECISION
MAKING
 Barriers to effective decision making.
 Behavioral tools for effective decision

making.
 Quantitative tools for effective decision

making.
BARRIER TO EFFECTIVE
DECISION MAKING
 Barriers are the imperfect or incomplete

information, inaccurate identification of
problems or alternatives, biases and over
commitment or under commitment
 IMPERFECT OR INCOMPLETE INFORMATION.
Imperfect or incomplete information is to
withholding information or misinforming others.
 INACCURATE IDENTIFICATION OF PROBLEM OR

ALTERNATIVES.
It means When we ask wrong question we can't
get the right answer.
 BIASES.
In decision making bias refers to situations in
which decisionmaking short cuts are
inappropriately applied.
 OVER COMMITMENT OR UNDER COMMITMENT.

It means exhibiting no rational escalation of
commitment.
BEHAVIORAL TOOLS FOR EFFECTIVE
DECISION MAKING
 Behavioral tools are the ways in which a person

behaves in a situation.
these tools are:-
 Decision timing.
 Realistic decision constraints.
 Critical thinking.
 Experience and expertise.
 Intuition .
BEHAVIORAL TOOLS
 Decision Timing.
It is the time when the decision is to be made by comparing the
benefits and the risks.
 Realistic Decision Constraints.

By understanding constraints one can more realistically select an
appropriate and acceptable solution.
 Critical Thinking Skills.

To improve decision making is to develop critical thinking which
help us think clearly, logically and analytically about the
problems we face.
BEHAVIORAL TOOLS
 Experience and Expertise

With decision making experience comes the ability to make
decisions faster managers also need to develop their expertise
in decision making so that they can recognize the key elements
in each problem
 Intuition
It is the ability to understand something immediately without
the need for conscious reasoning. We should be intuitive in
decision making.
QUANTITATIVE TOOLS FOR EFFECTIVE
DECISION MAKING
 Quantitative tools are especially valuable when
planning production, analyzing inventory levels and
considering major budget expenditure.
These tools are :-

 Payoff matrix
 Decision tree
 Simulation model
QUANTITATIVE TOOLS
 PAYOF MATRIX
A tool that compare probable outcome of two or more
alternatives.
 DECISION TREE
An analytical tool that graphically portrays the logical
series of actions and decisions in a problem situation.
 SIMULATION MODEL
A mathematical representation of problems that reflect
the relationship between the elements and it is used to
project that result of certain actions under various
circumstances.
Part – 5
GROUPS AND DECISION MAKING
 Decision making is often an individual activity but there are many times when groups
become involved in the process.
 Employee Participation in Decision Making

Manager have a great deal of latitude when deciding to handle decision making alone
or to involve others in the process.
 Group Decision – Making Formats

 Interacting Group.
 Nominal Groups.
 Delphi Groups.
 Impact of group Decision Making

Group decision making has both benefits and limitation as compared with individual
decision making.
 Benefits of Groups Decision

When attacking a problem, group members are able to contribute more knowledge and
information than individuals.
Advantages and Disadvantages of Group Decision Making
 Advantages  Disadvantages
 Groups can accumulate more knowledge and  Groups tend to work more slowly and take
facts. more time to reach any decision.
 Groups may have a broader perspective and  To much dependence on group decision making
consider more approaches and alternatives. may limit a manager’s ability to act quickly and
decisively when necessary.
 Individuals who participate in group decision
making are more likely to be satisfied with the  Groups may be dominated by one individual or
decision and to support its implementation. a small sub group.
 The group decision making process serves as  Group effort frequently result in compromises
an important communication devices. that may not be optimal for organizational
effectiveness or performance.
Tools for Effective Group Decision Making
 Brain Storming
An informal interactive group technique in which members generate many

alternatives with out passing judgment on their value.
 Devil’s Advocate
A technique in which one or more group members deliberately challenge the group’s
view to the problem, the alternatives, and their evaluation.
 Dialectic process
A technique in which individuals or groups present and defend opposing solution to a

particular problem to drive an improved solution.

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Management

 It is the process of recognizing a

(5) Implement The (2) Generate

(4) Make The (3) Evaluate

 Behavioral tools for effective decision

 Quantitative tools for effective decision

 Barriers are the imperfect or incomplete

 INACCURATE IDENTIFICATION OF PROBLEM OR

 OVER COMMITMENT OR UNDER COMMITMENT.

 Behavioral tools are the ways in which a person

 Realistic Decision Constraints.

 Critical Thinking Skills.

 Experience and Expertise

These tools are :-

 Employee Participation in Decision Making

 Group Decision – Making Formats

 Impact of group Decision Making

 Benefits of Groups Decision

An informal interactive group technique in which members generate many

A technique in which individuals or groups present and defend opposing solution to a

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