Managerial Decision Making

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Managerial Decision Making

  1. 1. By: Qadeer Ahmed BS(CIS)2008-12
  2. 2. Presentation Layout • Definition • The nature of managerial decision making • Types of problems decision makers face • Differences in decision making situations • Models of decision making • Steps in an effective decision making process • Overcoming barriers to effective decision making • Managing diversity: group decision making • Summary and Conclusions
  3. 3. Definition • The act of making up your mind about something, or a position or opinion or judgment reached after consideration. • The process of selecting from several choices, products or ideas, and taking action.
  4. 4. Four Functions of Management • An effective decision making includes following four steps
  5. 5. 1-8 Four Functions of Management Planning Choose Goals Organizing Controlling Working together Monitor & measure Leading Coordinate
  6. 6. Types of problems decision makers face • Managerial decision making typically centers on three types of problems: Crisis A crisis problem is a serious difficulty requiring immediate action. Non-Crisis A non-crisis problem is an issue that requires resolution but does not simultaneously have the importance and immediacy characteristics of a crisis. Opportunity Problems. An opportunity problem is a situation that offers strong potential for significant organizational gain if appropriate actions are taken.
  7. 7. Differences in decision making situations • There are two situation Programmed Decision Making Programmed Decisions are those made in routine, repetitive, well- structured situations through the use of predetermined decision rules. Non-Programmed Decision Making Non-programmed Decisions are those for which predetermined decision rules are impractical because the situations are novel and/or relatively ill structured.
  8. 8. 1-14 Three Levels of Management Top Managers Middle Managers First-line Managers Non-management
  9. 9. Three Levels of Management Comparison of Decision making situation and management levels
  10. 10. Three Stages of the Planning Process Determining the Organization’s mission and goals (Define the business) Strategy formulation (Analyze current situation & develop strategies) Strategy Implementation (Allocate resources & responsibilities to achieve strategies)
  11. 11. Models of decision making • Rational Model Most popular type of model Based around a cognitive judgment Pros and cons of various options • Non-Rational Models Satisficing Model Incremental Model Garbage-Can Model
  12. 12. Models of decision making cont…. • Satisficing Model Managers seek alternatives One that looks satisfactory  Not seeking the optimal decision. • Incremental Model Managers make the smallest response possible This reduce the problem to at least a tolerable level.
  13. 13. Models of decision making cont…. • Garbage-Can Model  Managers behave in virtually a random pattern
  14. 14. Steps in an effective decision making process • Four steps for effective decision making
  15. 15. Overcoming barriers to effective decision making • Means of overcoming D.M. barriers Accepting the problem challenge Searching for sufficient Alternatives Recognizing common Decision Making Biases Avoiding the Decision Escalation Phenomenon
  16. 16. Managing diversity • Group Decision Making Decision Making by more than one person Usually followed in organizations It has some advantages and some disadvantages
  17. 17. Outlines • Definition • The nature of managerial decision making • Types of problems decision makers face • Differences in decision making situations • Models of decision making • Steps in an effective decision making process • Overcoming barriers to effective decision making • Managing diversity: group decision making
  18. 18. Summary and Conclusions • Decision making is the process through which managers identify organizational problems and attempt to resolve them. • There are three types of Problems Managers face • Situation differ in Decision Making Process • Managers follow different types of models during decision making • Managing diversity
  19. 19. Questions????
  20. 20. Thanks for your patience

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