The document discusses decision making and outlines the seven steps of the decision making process. It describes the two basic classifications of managerial decisions as programmed and non-programmed. Many managerial decisions involve uncertainty due to unclear information, ever-changing factors, and conflicting points of view. Decisions can have characteristics of certainty, risk, uncertainty, or ambiguity depending on the availability of goals, information, and outcomes. Conditions like organizational problems can affect the possibility of decision failure. The construction industry requires frequent decision making, so managers must understand decision making processes and characteristics.

1. Tutorial 5
Decision Making
QSB2413 Management Science

2. Questions
1. Define decision-making and list the seven
steps of the decision-making process.
2. Identify and describe the two basic
classifications for managerial decisions.

3. Additional Notes
Many decisions that managers deal with every
day involve at least some degree of uncertainty
and require non-programmed decision making
due to:-
• Unclear information
• Ever-changing factors
• Conflicting points of view

4. Decision Characteristics
Certainty
 all the information the decision maker needs is fully available
Risk
 decision has clear-cut goals
 good information is available
 future outcomes associated with each alternative are subject to change
Uncertainty
 managers know which goals they wish to achieve
 information about alternatives and future events is incomplete
 managers may have to come up with creative approaches to alternatives
Ambiguity
 by far the most difficult decision situation
 goals to be achieved or the problem to be solved is unclear
 alternatives are difficult to define
 information about outcomes is unavailable

5. Conditions that Affect the Possibility of
Decision Failure
Organizational
Problem
Low
Certainty
Possibility of Failure
Risk Uncertainty
High
Ambiguity
Programmed Nonprogrammed
Decisions Decisions
Problem
Solution

6. Lecture notes
• In construction industry, managers are making
decisions anytime and every where.
• How to make a good decision in such a
frequent changing industry?
• What are the basic requirements /
characteristics needed by the managers in
making the decision effectively?