Decision-making

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Decision-making

  1. 1. CHAPTER 7 – DECISION-MAKING
  2. 2. MEMBERS OF GROUP :  Nurashikin bt Sharif 08DPM10F2026  Khursyah bt Ibrahim 08DPM10F2064  Nur Aidayu bt Shaharudin 08DPM10F2044  Juliana bt Ab Jalil 08DPM10F2065
  3. 3. Definition of Decision Making Huber (1980) - Problem solving process refers to a set of activities which involves exploring and implementing corrective action in a certain condition. A selection made between two or more alternatives. A selection is made after analysing the available alternatives and this is followed with
  4. 4. DECISION-MAKING MODELSRatio Boun ded Emoti nalMod Ratio onal el nal model Ratio
  5. 5. Rational ModelPermits the minimum achievement of an objective within the limitation to which the decision is an objective. In the rational model, the manager addresses how best to achieve objectives. The rational model is divided into
  6. 6. Bounded Rational ModelHerbet Simon in the mind 1950s introduced his pioneering research into thedecision-making processwithin business organizations.The model emphasized thelimitations of the individual’srationality, where is provides
  7. 7. Emotional modelAn individual does notthink logically. The patternfor making a decision is ina heuristic format. Thismodel can save time but
  8. 8. Authority in Decision- MakingManagers must take various decision in order to ensure that the organization is running smoothly.Two factors can be determine:
  9. 9. Table 7.1 Advantages and Disadvantages of Participative Decision Making Advantages Disadvantages Time-consuming: wasteMore problems can be resources if used forsolved. programmed decision or strategic planning.More knowledge, facts Decision may notand alternative can be satisfy everyevaluated. employee/manager.Discussion clarifies Groupnorms mayambiguous problems and reduce dissent and betterreduces uncertainty opinion.about decision-making.Participation fosters No clear focus for
  10. 10. Types of Decision Programmed decisions - made based on the set of policies, rules, and procedures. - every organization has written and unwritten rules that can be followed by manager and other employees to make decision. - this approach is useful for lower- level managers in solving problems.
  11. 11.  Non-programmed decisions>>>non-programmed decisions are used to solve unique or extraordinary problems.>>>used by top-line managers to solve complicated and
  12. 12. Conditions of Decision- MakingThere are three different Certainty :making decision conditions Risky conditions Uncertainty conditions
  13. 13. 1. Certainty conditionsWill usually thinks of a problem based onthe level of certainty and risk.Manager will be able to predict what willhappen in the future.They also have an adequate and completeknowledge about the matter. This enablesthem to list the outcomes of implementingthe available alternatives. Assuming that all the informationobtained is complete and reliable. Based list of outcomes, manager will
  14. 14. 2. Risky conditionsWhereby managers would only be able to roughly predict the outcome of implementing the alternative due to limited knowledge and information.Determined through objective probability whereby a mathematical model is used, or through subjective probability which is based on the managers experience and
  15. 15. 3. Uncertainty conditions Refer to conditions whereby decision-makers are unsure or unable to predict the outcome of an action. As manager, do not have any information on the outcome of implementing an alternative. As manager do not have adequate information they must make their own judgement based on past
  16. 16. Goals and Decision Making Goals called objectives, purposes, deadlines or targets. Goals or objective are basically result that are achieved. They indicate the direction in which decisions and actions should be aimed. Decision making under risk and certainty in an organization directly complies with objectives or goals in 2 ways (a) The decision-making process is triggered by a search for a better way to achieve objective (b) The decision-making process is triggered by an effort to discover new plans, revise current plans, or cancel current plans.
  17. 17. Decision-Making Skills1) Various problem in organization must be solved promptly by the management.2) The ability to select the best alternative require manager who have decision making.3) In a decision making process involving the opportunity to do
  18. 18. 4)Manager need to depend on their past experience to make decision.5)It depends on the willingness to accept risk and uncertainties.
  19. 19. Quantitative decision Refer to decision that made based on a set data values that obtained and processed using several mathematical method to predict future value. Widely used due:I. Produce accurate decision and is accepted as a tool to facilitate the planning process
  20. 20. Statistics have been usedbecause it is an area that isclosely related to research.In general, it is amathematical techniquesto
  21. 21. Qualitative decision Made based on the opinion and knowledge of experts when comprehensive past data cannot be obtained by decision maker. Steps that need to be taken by the manager:a) Prioritize the problemb) Obtain the relevant information
  22. 22. The Decision-Making Process Outcomes is the selection made from a list of available alternatives. The decision-making process that managers follow will influence the quality of decisions made.
  23. 23. 7 Steps of Rational Decision-Making Process Identify the problem Form alternatives Analyse the alternatives Select the best alternatives Implement a decision Evaluate the decision Take follow-up action
  24. 24. Decision-Making Techniques
  25. 25. Group Decision MakingMany decision have aimportance effect onactivities and humanresources organization bygroup or team in that
  26. 26. Advantages Able to collect moreinformation Able to form many effectivealternatives High acceptance level
  27. 27. Disadvantages Takes a longer time Minority domination Pressure to follow a decision Unclear responsibilities
  28. 28. Ways to improve group decision-making
  29. 29. Brainstorming A process of generating information that encourages the collection of alternatives without criticism. A process whereby every member provide his ideas and the best ideas will be selected
  30. 30. Nominal Group Technique limits discussions held during the decision-making process. all members are involved in the decision-making process.
  31. 31. Step : 1) meeting 2) present 3) record4) discussion
  32. 32. Delphi Techniquea group decision-makingtechnique that is morecomplex and takes time. doesnot allow teammembers to meet face toface.
  33. 33. Step :i. identify the problem.ii. members are instructed to provide solutions through a series of specifically designed questionnaires.iii. every members completes the questionnaires in private.iv. the results of the first questionnaire are compiled in one location and duplicated.
  34. 34. Electronic Meetingthe latest approach in group decision-making. covers the nominal group technique and the usage of a sophisticated computerr technology.
  35. 35. Step:i. Computers are installed in the meeting room.ii. 50 members will have a meeting through the computer network.iii.Issues will be given to participants
  36. 36. Thank you… ^^,

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