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Decision-Making Process

The document discusses the decision-making process in management. It begins by defining decision making as choosing between options to achieve organizational goals. It then describes the ideal decision-making process as involving 8 steps: defining the problem, determining requirements, establishing goals, identifying alternatives, developing criteria, selecting a tool, applying the tool, and checking the solution. However, it notes the reality is that decision makers often skip steps or ignore factors like fully defining the problem. The document concludes by outlining techniques for effective decision making, including SWOT analysis, marginal analysis, Pareto analysis, and decision matrices.

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rawal rajiv
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47 views15 pages

Decision-Making Process

The document discusses the decision-making process in management. It begins by defining decision making as choosing between options to achieve organizational goals. It then describes the ideal decision-making process as involving 8 steps: defining the problem, determining requirements, establishing goals, identifying alternatives, developing criteria, selecting a tool, applying the tool, and checking the solution. However, it notes the reality is that decision makers often skip steps or ignore factors like fully defining the problem. The document concludes by outlining techniques for effective decision making, including SWOT analysis, marginal analysis, Pareto analysis, and decision matrices.

Uploaded by

rawal rajiv
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPT, PDF, TXT or read online on Scribd
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The Decision-making Process

Thoughts, Ideas and Practice


 Decision making in management is the process of making
a choice between two or more options. This involves
evaluating the pros and cons of various choices and
choosing the best option to achieve a desired outcome. In
management, decision making is about acting in a way that
meets organizational goals and objectives.
Decision-making

 As defined by Baker et al in their 2001


study, “efficient decision-making involves a
series of steps that require the input of
information at different stages of the
process, as well as a process for feedback”.
Decisions

•Made up of a composite of information,


data, facts and belief.
•Data by itself does not constitute useful
information unless it is analyzed and
processed.
A Decision
 Is only as good as the data that informed it
 Is only as good as it is an informed one
 Is only as good as the system which exists
to implement
 Is only good if you have the means to
implement it
 Is only good if other people understand it
and what it means
Types of Decision
Making in
Management
 1. Routine and Basic Decision-making.
 2. Personal and Organizational Decision-making.
 3. Individual and Group Decision-making.
 4. Programmed and Non-Programmed Decision-
making.
 5. Policy and Operating Decision-making.
 6. Tactical and Strategic Decision-making.
 7. Planned and Unplanned Decision-making
The Ideal Decision-making
Process
STEP 1 STEP 2
Define the problem Determine the
requirements that the
solution to the
problem must meet

STEP 3 STEP 4
Establish goals that Identify alternatives
solving the problem that will solve the
should accomplish problem

STEP 5
STEP 6
Develop valuation
Select a decision-
criteria based on the
making Tool
goals

STEP 7
STEP 8
Apply the tool to
Check the answer
select a
to make sure it
preferred alternative
solves the problem

The Decision-making Process (adapted from Baker et al, 2001)


The Reality
 Is the Problem really the problem?
Problems are often the symptom and not the
true problem.
 Most often that not steps 5-8 are either
forgotten, avoided or simply ignored.
 Urgency – is there a quick version?
 Who has time to follow-up? Tomorrow is
another problem.
Techniques of Decision
Making
SWOT Analysis
 One popular decision making a step in management is
known as SWOT analysis. This involves identifying the
strengths, weaknesses, opportunities, and threats
associated with a particular decision. By taking all of these
factors into account, individuals can make informed and
effective choices.
Marginal Analysis
 A popular technique is known as marginal
analysis. It involves weighing the costs and
benefits of each option to choose the one
that will create the greatest value.
Pareto Analysis
 Pareto analysis is a decision-making technique that can be
used to identify the most important factors in a given
situation. Named after Italian economist Vilfredo Pareto,
the technique is based on the principle that 20% of the
causes will produce 80% of the results.
Decision Matrix
 Finally, the decision matrix is a tool that
can be used to compare different options
side-by-side. By using these techniques,
individuals can be sure that they are making
sound decisions that will lead to positive
outcomes.
THANK YOU

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