CHAPTER 3-Decision Making
CHAPTER 3-Decision Making
The Nature of
Decision Making
FUNDAMENTALS OF
MANAGEMENT
(MGT162)
Topic Outlines
Non-
Program
Program
• Reflect the results the organization want to attain. Both the quantity &
quality of the desired results should be specified because these
objectives will ultimately guide the decision maker in selecting the
appropriate course of action.
Identifying
objectives • Objectives can be short range or long range.
Can enhance creativity by overcoming pressures for conformity that can retard
the development of creative decision-making.
A complex problem can be broken up into parts and each part can be taken
separately at a time.
Cont…
2) Nominal group technique (NGT)
A structured process designed to stimulate creative group decision-making in
which agreement is lacking or the members have incomplete knowledge
concerning the nature of the problem.
It's helpful when decisions need to be rendered in a timely manner, yet the
company wants all of the opinions of the individuals in a group to factor within the
decision in a bigger way than a simple "majority rules" voter pool.
Individual members list their ideas on the specific problem and present the ideas
at one time, without discussion.
After all members’ ideas are presented, the group discusses the ideas to clarify
and evaluate them.
Duplicate solutions are then eliminated from the pool, leaving only original
solutions behind.
Cont…
3) Delphi technique
An approach that uses the experts to make predictions and forecasts about future
events without meeting face-to-face.
It uses the opinions of a limited group of experts or people who have knowledge of
the subject from their experience.
The subjects that an organisation wants to understand through the Delphi method
are obtained by subjective means; the opinions of the group of experts are
therefore very important.
Advantages Disadvantages
More information and The process takes longer than
knowledge are available. individual decision making, so
it is costlier.
More alternatives are likely
to be generated. Compromise decisions
resulting from indecisiveness
More acceptance of the may emerge.
final decision is likely.
One person may dominate the
Enhanced communication group.
of the decision may result.
Groupthink* may occur.
Better decisions generally
emerge.
* a process in which bad decisions are made because the different members of a
group do not express their individual opinions about a plan, proposal, etc. but only
say what they think the rest of the group would agree with
“Inability to make decisions is one of the principal reasons
executives fail. Deficiency in decision-making ranks much
higher than lack of specific knowledge or technical know-
how as an indicator of leadership failure.”
~ John C. Maxwell ~