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Decision Making: An Essence To Problem Solving

This document discusses decision making and the decision making process. It outlines that there are two main types of decisions - programmed decisions which are routine and non-programmed decisions which are unique. The decision making process involves 8 steps - identifying the problem, identifying decision criteria, allocating weights to criteria, developing alternatives, analyzing alternatives, selecting an alternative, implementing the alternative, and evaluating the decision's effectiveness. The document also discusses different conditions of decision making such as certainty, risk, and uncertainty and provides guidelines for effective decision making.

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70 views26 pages

Decision Making: An Essence To Problem Solving

This document discusses decision making and the decision making process. It outlines that there are two main types of decisions - programmed decisions which are routine and non-programmed decisions which are unique. The decision making process involves 8 steps - identifying the problem, identifying decision criteria, allocating weights to criteria, developing alternatives, analyzing alternatives, selecting an alternative, implementing the alternative, and evaluating the decision's effectiveness. The document also discusses different conditions of decision making such as certainty, risk, and uncertainty and provides guidelines for effective decision making.

Uploaded by

zead28
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Decision Making

An essence to problem solving

Page 1

Decision Making

the process of responding to a problem by searching and selecting a solution or course of action. There are basically two kinds of decision that are called upon to make:

Programmed and non-programmed


Page 2

Types of Problems and Decisions


Structured problems
* Involve clear goals. *Are familiar (have occurred before) *Are easily and completely defined- information about the problem is available and complete.

Programmed decision
*A repetitive decision the can be handled by a routine approach.
Page 3

Unstructured problems
* Problems that are new or unusual and for which information is ambiguous or incomplete. * Problems that will require custom-made solutions.

Non-programmed decisions
* Decision that are unique and non-recurring. * Decision that generate unique responses.

Page 4

Vitals of Decision making process


Policy
a general guideline for making a decision about a problem.

Procedure
* A series of interrelated steps that decision maker can use to respond ( applying a policy) to a problem.

Rule
* an explicit statement that limits what can or cannot be done.

Page 5

The DecisionMaking Process

Define the Problem

Evaluate Alternatives

Implement the chosen Alternative

Gather facts and develop alternatives.

Select the best alternative.

Follow up and evaluate the chosen alternative.


Page 6

Decision Making Process


Identifying Problem Identifying Decision Criteria Allocating Weights to the Criteria Developing Alternatives Analyzing Alternatives Select Alternatives. Implement Alternatives. Evaluating decisions effectiveness.
Page 7

Step 1: Identifying the Problem


* A problem becomes a problem when someone becomes aware of it. * there is always a pressure to solve the problem. * the person must have the authority, information, or resources needed to solve the problem.

Page 8

Step 2: Identify the Decision Criteria


Decision criteria are factors that are important ( relevant) to resolving the problem. * Costs that will be incurred (investment required). * Risks likely to be encountered ( chance of failure). * Outcomes that are desired ( growth of the firm).
Page 9

Step 3: Allocating Weights to the Criteria


Decision criteria is of equal importance: * Assigning a weight to each item. * Places the items in the correct priority order of their importance in the decision making process.

Page 10

Step 4: Developing Alternatives


Identifying viable alternatives. * Alternatives are listed ( without evaluation) that can resolve the problem.

Page 11

Step 5 :Analyzing alternatives


Appraising each alternatives strengths and weaknesses * An alternatives appraisal is based on its ability to resolve the issues identified

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Step 6: Selecting the alternative


Choosing the best alternative * The alternative with the highest total weight is chosen.

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Step 7: Implementing the Alternative


Putting the decision to and gaining comment from those whose will carry out the decision.

Page 14

Step 8: Evaluating the decisions effectiveness


The soundness of the decision is judged by its outcomes. * How effectively was the problem resolved by outcomes resulting from the chosen alternatives? * if the problem was not resolve, what went wrong?
Page 15

Intuition
* It is making decisions on the basis of experience, feelings, and accumulated judgment.

Page 16

Decision Making Conditions


Certainty * A situation in which someone can make an accurate decision because the outcome of every alternative choice is known. Risk * A situation in which the someone is able to estimate the likelihood (probability) of outcomes that result from the choice of particular alternatives.
Page 17

Uncertainty * limited information prevents estimation of outcome probabilities for alternatives associated with the problem and may force to rely on intuition, hunches, and gut feelings. # Maximax: The optimistic persons choice to maximize the maximum outcome. # Maximin: The pessimistic persons choice to maximize the minimum outcome. # Minimax: The choice to minimize maximum regret.
Page 18

Types of Decision Makers


* Directive # Use minimal information and consider few alternatives. * Analytic # Make careful decisions in unique situations. * Conceptual # Maintain a broad outlook and consider many alternatives in making decisions. * Behavioral # Avoid conflict by working well with others and being receptive to suggestions.
Page 19

Rational (Logical) Decision Model Steps


Scanning the situationidentifying a signal that a decision should be made. Classify the decision as routine, apply the appropriate decision rule; as non-programmed, begin comprehensive problem solving.

Monitor and follow-up as necessary.

Page 20

Trends in Decision Making


The pace of decision

making is accelerating: more decisions to make and have less time to make them. Complex streams of decisions Sources of decision complexity Perceptual and behavioral decision traps
Page 21

Dealing with Complex Streams of Decisions


Multiple criteria to be satisfied by a decision. Intangibles that often determine decision alternatives. Risk and uncertainty about decision alternatives. Long-term implications of the effects of the choice of a particular alternative. Interdisciplinary input increases the number of persons to be consulted before a decision is made.

Page 22

Pooled decision making increases the


number of persons playing a part in the decision process.

Value judgments by differing participants


in the process create disagreement over whether a decision is right or wrong, good or bad, and ethical or unethical.

Unintended consequences occur because


the results of purposeful actions cannot always be predicted.
Page 23

Guidelines for effective decision making


Categorical interpretation- the problem should be defined properly. Application of limiting factor- limiting factor should be taken into account in order to analyze Adequate information- more quantity of reliable information leads to effective decision making. Considering other views- various views at the same point are taken into account for quality decision. Timeliness- decision should be ,made at proper time to meet the competitive advantages.
Page 24

Techniques improving decision making


Brainstorming idea generation for decision making. Nominal group technique (NGT)- problem outlined, presentation of solution in written form, discussion over written solutions, and final decision. Delphi technique- decision made on the basis of questionnaire filled by the respondents. Consensus mapping- decision made on the basis of the report presented by the representative of each group after Page 25

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