1. Making Decisions
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2. Decision Making is the Process of:
Identifying problems and
opportunities
Developing alternative solutions
Choosing an alternative
Implementing
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3. Programmed Decisions
•• Involved problems or situations that have occurred often.
Involved problems or situations that have occurred often.
•• Circumstances and solutions are predictable.
Circumstances and solutions are predictable.
•• Decisions are made in response to recurring organizational
Decisions are made in response to recurring organizational
problems.
problems.
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4. Programmed
Decision
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5. Non-Programmed Decisions
•• Made in response to problems and opportunities that have
Made in response to problems and opportunities that have
unique circumstances.
unique circumstances.
•• May provide unpredictable results.
May provide unpredictable results.
•• Are often situations that have never occurred before.
Are often situations that have never occurred before.
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6. The Decision-
Making Process
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7. The Decision-
Making Process
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8. The Decision-
Making Process
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9. The Decision-
Making Process
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10. The Decision-
Making Process
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11. The Decision-
Making Process
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12. The Decision-
Making Process
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13. Scan in Figure 7.4 The Funnel
Approach to
Defining a
Problem
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14. Problem, Limiting Factors
 Personnel
 Personnel
 Money
 Money
 Facilities
 Facilities
 Equipment
 Equipment
 Time
 Time
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15. Alternatives Should
 Eliminate the problem
 Correct the problem
 Neutralize the problem
 Maximize the opportunity
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16. Analyzing Alternatives
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17. Implementing the Decision
• Solutions need effective implementation.
• Everyone must know:
– What he or she must do.
– How to do it.
– Why and when it must be done.
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18. A Control & Evaluating System
Should Provide:
 What the positive and negatives results are.
 What adjustments are necessary.
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19. Degree of Ambiguity and
Potential for Failure
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20. Conditions of Certainty
• Manager has what is known as perfect knowledge.
• The decision has been made before.
• There are known alternatives.
• Consequences are understood.
• Ambiguity and fear of failure do not exist.
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21. Risk
• A more complex environment.
• The manager knows what the problem is and what the
alternatives are.
• Cannot be sure of the consequences of each alternative.
• Ambiguity and risk are associated with each alternative.
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22. Uncertainty
• Most difficult condition for a manager.
• Exact outcomes cannot be determined.
• May not be able to identify all alternatives.
• High ambiguity and possibility for failure.
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23. Ideal Resources
• Managers operate in an environment that normally
does not provide ideal resources such as:
Information
Time
Personnel
Equipment
Supplies
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24. Factors that Influence Manager’s
Decision Making
• Personal attributes
• His or her decision-making approach
• Ability to set priorities
• Timing of decisions
• Tunnel vision
• Commitments
• Degree of creativity
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25. Brainstorming Elements
A half dozen to a dozen people are gathered in a comfortable setting
for a specified time, free from outside interruptions.
Participants are given the problem or opportunity and told that no
idea or suggestion is too ridiculous to be voiced.
The facilitator encourages the free flow of ideas until all opinions
have been presented.
A person acting as the designated scribe records the ideas on a chalk
board or flipchart.
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26. Figure 7.10
Steps in the
Nominal Group
Technique
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27. Delphi Technique
• Provides a structure.
• Leads to consensus.
• Emphasizes equal participation.
• Participants never meet.
• Decision making is conducted by a group leader
through written questionnaires.
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28. Delphi Technique
1.The problem is stated to a group of experts through
a questionnaire. Each person is asked to provide
solutions. The experts do not interact.
2.Each participant completes the questionnaire and
returns it.
3.A summary of opinions is developed from the
answers received.
4.The experts complete the second questionnaire.
5.The process continues until the experts reach
consensus.
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29. Group Decision-Making
Advantages
• Brings a broader perspective to the decision-
making process.
• Diversity broadens the views.
• Provides the opportunity for discussion.
• Reduces uncertainty.
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30. Group Decision-Making
Disadvantages
• Time-consuming
– The possibility the decision reached will be a
compromise.
• Groupthink
• Difficulty in taking the initiative.
• No one person has responsibility for the decision.
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