2. Decision Skills
• All management work is accomplished by
decision making.
• Most basic skill of all management skills.
• Most studied by management practitioner and
researcher.
• Eliminate some common errors.
• Lead to better performance.
• Lead to improvements in creative decision
making.
4. Individual Level
• Rational or normative decision process.
• Recognizing the issues and potential problems.
• Classifying decisions.
• Errors in decision making.
• Thinking processes and styles.
• Individual creativity and choosing alternatives.
• Risk taking.
5. Organizational Level
• Creating the right environment.
• Timely decisions are to be made.
• Involvement of all management levels.
• Managing group decision processes.
• Effective in dealing with uncertainty.
6. Common Errors in Decision Making
• Timidity
• Lack of time limits
• Failure to separate symptoms and problems
• Failure to define conditions, criteria and
objectives.
• Making inferences from unreliable sources.
• Lack of awareness of factors affecting
judgment.
• Not using a systematic model.
• Emotions cloud the process.
• Failure to implement.
7. Normative Decision Process
• Classifying and defining the problem.
• Developing criteria for a successful solution.
• Generating alternatives.
• Comparing alternatives to criteria.
• Choosing an alternative.
• Implementing the decisions.
• Monitoring the decision and getting feedback.
8. Classifying the Problem
• Recurring problems those that occur
regularly.
• Unique problems for the manager –
recurring in nature.
• Unique problems.
• A unique problem that will become
recurring.
9. Recurring Problems
• Recurring Regularly
- Seasonal problems
- Seasonal hiring of employees / contractors
- Seasonal shortage of electric power
- Seasonal demands for good and services
- Plant shutdowns for maintenance
- Recurring customer complaints.
10. Unique Problems for the Manager
– Recurring in Nature
• Job choices
• Merger with another organization
• Installation of a computerized inventory
system / MIS.
11. Unique Problems
• The plant burned down due to fire, earth
quake, Tsunami…
• Insolvency
• War
• Products produced created a bad impact due
to explosion of poisoned gas.
12. A Unique Problem that will become
Recurring
• Consumer complaints about the new products.
• Plant explosion
• Fire, sabotage
• Fuel crisis
13. Programmable Problems
• Routine and Generic could be negotiated
• Recurring
• Routine solutions are available as per the
rules
14. Unprogrammable Problems
• Unique, unstructured, complex.
• Require new approaches for solution
• Information channels undefined
• Decision criteria unknown
• Outcome preferences uncertain
15. Recurring Problem Solving
• Proceduralized
• Predictable
• Cause and effect relationships
• Amenable to existing technology
• Definite decision criteria
• Reliance upon rules and principles
• Habitual reactions
• Uniform processing
• Standardized method of handling.
16. Deciding What Problems
to work on
• Problem classification and definition
allow managers to rank problems in
terms of their priority.
17. Prioritizing Problems
• The consequences of the problem
• The impact of the problem on the
organization
• Time pressures and urgency
• The best utilization of the manager’s skills
and times.
• Problem attractiveness.
• The lifespan of the problem.
19. Creative People
• Sports
• Experience in the fields
• Creativity to solve complexity and novelty
• Less conforming
• Good sense of humor
• Flexible
• Independent
• Take risks
21. Improving Creativity
• Define the problem thoroughly
• Approach the problem from different angle.
• Don’t jump to conclusions to quickly.
• Generate several alternatives
• Critically evaluate one.
• Remove perceptual blocks.
• Don’t worry about being practical too early in
the process.
22. Improving Creativity…
• Focus on the critical attributes of the
problem.
• Avoid conformity.
• Question all ideas and standards if they have
drawbacks.
• Be alert for good solutions.
• Talk to outside experts.
• Take breaks.
24. Decision Trees
• Used for comparing criteria to alternatives
• Convenient way to display the various parts
of a given decision.
• Useful when the decision maker has to deal
with uncertainty.
• Where there are some parts of the decision
that are out of the decision makers control or
due to chance.
• Listing the alternatives
25. Decision Trees…
• Listing events that might possibly occur.
• They provide clarity and preciseness and
point to the alternatives about which you
need to get some more information.
• Decision trees reveal alternatives about
which your want to avoid because of a high
possibility of potential loss.
27. Choosing an alternative
• Usually considered the high point of
decision making.
• Superior alternative.
• Meets the most of the criteria.
• To be selected.
28. Choice Behaviours
• Maximize
• Looking at all possibilities
• Making the best possible decisions
• Choosing best of the solutions
29. Satisfiers
• Stop when they found a satisfactory
alternative.
• That is feasible in the light of the
criteria.
• More common than maximizing.
30. Incrementing or Muddling
through
• Make a series of small decisions
• All aimed at their main objective
• Rather than make the decision that
gets them there all at once
• Incrementing takes longer than
maximizing or satisfying
• But risks less resources at any time.
31. Adaptive Choice
• Simply building the capacity to make
decisions
• Respond quickly to a competitor’s action
• Avoid making a major decision for a
while
• Works very well where there is so much
uncertainty and difficulty to estimate any
probabilities
32. Risk Taking and Choice
• People and company vary in taking risks
• There is a risky possibility with a high
potential pay off
• Large companies, for example, are often
characterized as being more risk average
than small entrepreneurial firms.
• Group decisions tend to be riskier than those
individuality.
• The risk is spread over a number of people.
33. The Role of Judgment in
Decision making
• Judgment must be made regarding how
current management values fit with the
decision, the ethics of the decision, and
organizational politics.
• The extent to which the decision will be
accepted by those around you is extremely
important.
• Without help from peers, subordinates, and
the boss, decisions are virtually impossible to
implement.
34. The Role of Judgment in
Decision making…
• None of these factors can be qualified
accurately enough to fit in decision
models like decision trees.
• These factors must be weighed with
judgment gained through years of
experience.
35. Implementing the decision
• One of the biggest mistake – “Assume that
action based on a decision will automatically
follow the making of the decision.
• Avoiding potential conflicts.
• Keeping people interested and motivated in
the decision.
• Assigning individuals with proper ability to
carry out various implementation tasks.
36. Steps in Implementation
• A schedule of events
• Steps needed to put the solution into action
• Assessing the abilities
• Assigning responsibilities
• Reporting relationships
• Coordinating the implementation work
• Avoiding conflicts of interests.
37. Monitoring the decision and
getting feedback
• A mechanism for getting periodic reports on
how implementation is going.
• A system for finding out about mistakes and
successes.
• Correction and reward
• Control function
• Setting standards and measuring performance
against them
• Prevent problems before they occur
• First hand information.
