managers as decision makers

1. Managers As
Decision
MakersPresented By Azhar Fareed.
Student At Federal Urdu University Islamabad, Pakistan

2. Decision Making process
 Decision Making process
• The process by which managers respond to the opportunity and threats by analyzing
and making some decision about goals and actions.
• The process of choosing alternative.
 There are eight steps that managers adopt to make decisions.
 Identify A Problem
 Identify Decision Criteria
 Allocating Weights To The Criteria
 Developing Alternatives
 Analyzing Alternatives
 Selecting An Alternative
 Implementing An Alternative
 Evaluating Decision Effective

3. 1- Identifying the problem
 A problem is defined as a difference between existing and desired state of
affairs.
Suppose I’m Manager of an institute
 I faced a problem in our old based computer system.

4. 2- Identify Decision Criteria
 Once a manager has identified a problem, he should identify the decision
criteria that is important to decision making.
 In my case I have decided carefully considering that memory and storage
capabilities, display quality, battery life, warranty and weight.

5. 3- Allocating weights of the Criteria
 The criteria defined in step 2 are not equally important. So, the decision
makers must weight the items in order to give them correct priority in the
decision making.
In my case I will allocate the weights of criteria as;
Quality Weightage {out of 10}
Memory and storage 10
Battery life 08
Carrying weight 06
Warranty 04
Display Quality 03

6. 4-Developing Alternatives
 Fourth step is to make a list of alternatives that can solve the problem.
 In this step Decision makers need to be creative.
In my Example the alternatives are
Alternative
HP Pro Book
Sony
Lenovo
Apple
Toshiba
Sony
Dell

7. 5- Analyzing alternatives
 In this step the decision makers analyze the strengths and weaknesses of
alternatives.
In my institute I will analyze the alternative by checking the total scores of my
alternatives.
Alternative Memory Battery life weight warranty Display Total Scores
HP Pro Book 10 03 10 08 05 36
Sony 08 07 07 08 07 37
Lenovo 08 05 07 10 07 37
Apple 08 07 07 08 07 37
Toshiba 07 08 07 08 07 37
Sony 08 03 06 10 08 35
Dell 10 07 08 06 07 38

8. 6- Selecting an Alternative
 In the sixth step the decision makers chooses the best alternative or one of
the generated the highest total in step 5.
In my case I will choose the Dell Laptop for his good specifications. As all the
specifications are good in this alternative.

9. 7- Implementing the alternative
 In this steps the decision makers puts the decision into action by converting it
to those affected and getting commitment to it.
 Another things that managers must keep in mind that during implementation
is there any environmental change, specially when it is a long term decision.
In my case I will implement Dell because it is perfect for me. There is no
environment changes.

10. 8-Evaluating Decision Effective
 In this stage the decision makers evaluate the outcome or the result of the
decision to see whether the problem is solved.
 If the problem still exist the manager have to access what is wrong.
In my case, the problem is resolved because now lot of students are joining my
institute. I have improved the education level.

11. Overview

12. Managers
Making
Decisions

13. Managers Making Decisions
 Decision making is a part of four managerial functions. In fact, that is why we
say that decision making is the important part of management.
 When managers plan, organize, lead and control is called Decision making.

14. Decisions That Managers May Make
 Planning
• What are the long term
objectives of an
organization?
• What strategies will best
achieve the objective?
• What should be the best
short term objectives of
an organization.
 Organizing
• How many employees
should I have report
directly to me?
• How should jobs be
designed?
• When should the
organization
implement a different
structure.
 Leading
• How do I handle the
unmotivated employees?
• How will the some
change affect the worker
productivity?
• What activities in the
organization need to be
controlled?
• How should those activities
be controlled?
• What type of information
system should organization
have?
 Controlling

15. Making Decision Rationality
 Manager makes consistent, logical choices to maximize the values.
Assumptions
• Would be fully objective and rational.
• Have carefully identified the problems and all the alternatives.
• Have a clear and specific goals.
• Selecting the alternative that gives most output.

16. Making Decisions: Bounded Rationally
 Managers make decision rationally but are limited (bounded) by their abilities
to process information.
Assumptions
 Not seek out or have knowledge of all alternatives.
 Choose the first alternative to solve the problem, rather then considering all
the alternatives and choosing the best among them.

17. Making Decisions: The Role Of Intuition
 Making decision on the basis of experience, feeling and judgement.
 Can complement both rational and bounded rational decision making

18. Types Of
Decisions And
Decision Making
Conditions

19. Types Of Decisions And Decision Making Conditions
 Types Of Decisions
 There Are Two Types Of Decisions.
 Structured Or Programmed Decisions
 Unstructured Or Non Programmed Decisions

20. Structured Or Programmed Decisions
 The decisions that are used for frequent situations of an organization both externally and
internally.
 These Decision are done on the regular basis and decision making is easy.
 Lower level manager can take this type of decisions.
 Less time consuming.
 They are inexpensive in nature.

21. Types Of Programmed Decisions
i. Procedure
o A series of sequential steps a manager used to respond to a structured problem.
o The only difficulty is to identify the problem.

22. Types Of Programmed Decisions
ii. Rule
o A statement that tells the manager what can and cannot be done.
o Rules are frequently used because they are simple to follow.
o For example rules about lateness, absents and discipline in an organization.

23. Types Of Programmed Decisions
iii. Policy
o The guideline for making a decision.
o It consist of general parameters for the decision making.
o Here are some simple policy statements:
 The customer always comes first and should be satisfied.
 Employees wages shall be competitive with in community standard.

24. Unstructured Or Non Programmed Decisions
 Decisions developed to deal with unusual problems.
 Information is incomplete.
 These decisions are unique and nonrecurring.
 Decisions are made by top level managers.
 Manager can face a lot of risk.

25. Decision Making Conditions
While making decisions, managers can face three types of conditions.
1. Certainty
2. Risk
3. Uncertainty

26. Decision Making Conditions
1. Certainty;
 The managers exactly knows the outcome of each alternative.
2. Risk;
 The Decision makers does not know that what the outcome of the alternative can be.
 They make estimate and probabilities of various outcome.
3. Uncertainty;
 The decision makers lacks enough information to estimate the probability and outcome of alternative.