The Decision Making Process

Slide 1: The Decision-Making Process

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Slide 3: Decision A choice from two or more alternative

Slide 4: Decision-Making Process A set of eight steps including identifying a problem, selecting an alternative, and evaluating the decision’s effectiveness

Slide 5: Problem A discrepancy between an existing and a desired state of affairs

Slide 6: The Decision-Making Process Identification of Identification of Allocation of Weights a Problem Decision Criteria to Criteria Development of Alternatives Analysis of Alternatives Evaluation of Implementation of the Selection of an Decision Alternatives Alternatives Effectiveness

Slide 7: Making Decisions: Rationally rational decision-making: Describe choices that are consistent and value maximizing within specified constraints.

Slide 8: Making Decisions: Bounded Rationality bounded rationality decision-making: Behavior that is rational within the parameters of a simplified decision- making process, which is limited (or bounded) by an individual’s ability to process information.

Slide 9: Making Decisions intuition decision-making: a subconscious process of making decision on the basis of experience and accumulated judgment.

Slide 10: Decision Making Styles • Directive Style A decision making style characterized by low tolerance for ambiguity and a rational way of thinking. – They’re efficient and logical – Directive types makes fast decisions and focus on the short run

Slide 11: Decision Making Styles • Analytical Style A decision making style characterized by a high tolerance a high tolerance ambiguity and a rational way of thinking. – They want more information before making decision and consider more alternatives

Slide 12: Decision Making Styles • Conceptual Style A decision making style characterized by a high tolerance for ambiguity and an intuitive way of thinking. – Very broad in the their outlook and will look at many alternatives – They focus on the long run and very good at finding creative solutions to problem

Slide 13: Decision Making Styles • Behavioral Style A decision making style characterized by a high tolerance a low tolerance ambiguity and an intuitive way of thinking. – They’re concerned about the achievements of subordinates and are receptive to suggestion from others

Slide 14: Overview of Managerial Decision Making Decision Making Approach • Rationality • Bounded Rationality Types of Problems and Decisions •Intuition •Well structured-programmed •Poorly structured-non programmed Decision • Choosing best alternative Decision Making •Implementing Process •Evaluating Decision Making Conditions • Certainty •Risk Decision Making Styles •Uncertainty • Directive •Analytical •Conceptual •Behavioral