4thsemster, davv, davvindore, decision making, devi ahiliya vishwa vidhyalaya, imsdavv, imsmm, instituteofmanagementstudies, marketingmanagement, mba4thsem, mbaivsem, mbamm

1. 7–1
Decision-making
• Decision-making process
A set of seven steps that includes identifying a
problem, selecting a solution, and evaluating the
effectiveness of the solution
• Problem
A discre pancy between an existing and a desired
state of affairs
• Decision criteria
Factors that are relevant in a decision

2. 7–2
The Decision-Making Process

3. 7–3
Step 1: Identifying the Problem
• Problem
“A discrepancy between an existing and a desired
state of affairs” (p. 186)
Ask the question, Why?
Determine the reason
Separating the symptoms from problems
 Example:
– A physician must identify reasons for a fever. Once the
cause is identified, the problem has been determined

4. 7–4
Step 2: Collect Relevant Information
• Gather facts & information relevant to the
problem:
• Ask questions:
When did the problem start appearing?
Why is appearing now?
What are the affects of the problem?
What are the costs associated with the problem?

5. 7–5
Step 3: Develop Alternatives
• Generate a full range of alternatives for solving
the problem
Creativity is critical
The more alternatives generated, the greater
likelihood the best choice is among the possibilities

6. 7–6
Step 4: Evaluate Each Alternative
• Evaluation of all the strengths and weaknesses
of each alternative
Guard against biases
Estimate the cost of each alternative
Estimate the implementation time of each alternative
Identify the strengths and weaknesses of each
alternative
Approximate the expected outcome of each
alternative
 Favorable & Unfavorable

7. 7–7
Step 5: Select the Best Alternative
• Selection of the best alternative will depend on:
Comprehensiveness and accuracy of information
gathered
Creativeness of alternatives
Quality of analysis

8. 7–8
Step 6: Implement the Decision
• Establish a plan:
 When will the decision be implemented?
 Who will be involved?
 What will be involved?
 What changes will take place?
 How will they occur?
• Convey the decision to those affected
• Assign responsibilities
• Allocate necessary resources
• Identify and clarify deadlines
• Get commitment from those involved in the
implementation

9. 7–9
Step 7: Follow Up & Evaluate
• Continually monitor outcomes
Did your choice accomplish the desired result?
Did it correct the identified problem

10. 7–9
Step 7: Follow Up & Evaluate
• Continually monitor outcomes
Did your choice accomplish the desired result?
Did it correct the identified problem