Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

50709056 decision-making

4,260 views

Published on

Published in: Business, Technology
  • Be the first to comment

50709056 decision-making

  1. 1. DECISION MAKING<br />- An essence to problem solving<br />
  2. 2. WHAT IS DECISION MAKING?<br />“ the process of responding to a problem by searching for and selecting a solution or course of action that will create value for organisational stakeholders”.<br />
  3. 3. MANAGERIALDECISIONMAKING<br />FOUR STEPS IN THE DECISION MAKING PROCESS<br />DECISION MAKING<br />STEP 1<br />IDENTIFY <br />THE <br />PROBLEM<br />STEP 2<br />GENERATE <br />ALTERNATIVE <br />SOLUTIONS<br />STEP 4<br />IMPLEMENT<br />& MONITOR<br />THE CHOSEN <br />SOLUTION<br />STEP 3<br />EVALUATE <br />& CHOOSE <br />AMONG <br />ALTERNATIVE <br />SOLUTIONS<br />PROBLEM SOLVING<br />
  4. 4. STEPS IN AN EFFECTIVE DECISION MAKING PROCESS<br />
  5. 5. Types of Programmed Decisions<br /><ul><li>Policy</li></ul> • A general guideline for making a decision about a structured problem.<br /><ul><li>Procedure</li></ul>• A series of interrelated steps that a manager can use to respond ( applying a policy) to a structured problem.<br /><ul><li>Rule</li></ul> • An explicit statement that limits what a manager or employee can or cannot do.<br />
  6. 6. DIFFERENCES IN DECISION MAKING SITUATIONS<br />NONPROGRAMMED DECISIONS :Decisions for which Predetermined Decision Rules are impractical because the situations are novel and / or relatively unstructured<br />UNCERTAINTY A condition in which the decision maker must choose a course of action without complete knowledge of the consequences that will follow implementation<br />RISK The possibility that a chosen action could lead to losses rather than the intended results<br />e.g. : Faced with rapid change & declining US $, Annette Roux, Head Chantiers Beneteau in France opened plant in Carolina to manufacture Sailboats<br />
  7. 7. Programmed vs. Non-programmed <br />Decisions : <br />
  8. 8. EXAMPLES OF MANAGERIAL DECISION MAKING SITUATIONS<br />
  9. 9. Decision-making styles<br /><ul><li>Dimensions of decision-making styles</li></ul> • Ways of thinking<br /> • Rational, orderly, and consistent.<br /> • Intuitive, creative, and unique.<br /><ul><li>Tolerance of ambiguity</li></ul> • Low tolerance: require consistency and order.<br /> • High tolerance: multiple thoughts simultaneously.<br />
  10. 10. Decision-Making Styles (cont’d)<br /><ul><li>Types of Decision Makers</li></ul> • Directive<br /> Use minimal information and consider few alternatives.<br /> • Analytic<br /> Make careful decisions in unique situations.<br /> • Conceptual<br />Maintain a broad outlook and consider many alternatives in making decisions.<br /> • Behavioral<br /> Avoid conflict by working well with others and beingreceptive to suggestions.<br />
  11. 11. Individual Models of Decision-Making<br />Cognitive style<br />Underlying personality dispositions toward the treatment of <br />information, selection of alternatives, and evaluation of consequences.<br />Systematic decision makers<br />People who approach a problem by structuring it in terms of some formal method.<br />Intuitive decision makers<br />People who approach a problem with multiple methods in an unstructured manner, using trail and error to find a solution.<br />Organizational models of decision making<br />Models of decision making that take into account the structural and political characteristics of an organization.<br />
  12. 12. Organizational Models of Decision-Making<br />Bureaucratic models of decision making<br />where decisions are shaped by the organization’s standard operating procedures(SOPs).<br />Political models of decision making<br />where decisions result from competition and bargaining among the organization’s interest groups and key leaders.<br />“Garbage can” model<br />where states that organizations are not rational and that decisions are solutions that become attached to problems for accidental reasons. <br />
  13. 13. GROUP DECISION MAKING<br />ADVANTAGES & DISADVANTAGES OF GROUP DECISION MAKING<br />
  14. 14. Common decision-Making errors and Biases<br />Overconfidence<br />Immediate Gratification<br />Hindsight<br />Self-serving<br />Anchoring Effect<br />Decision-Making Errors & Biases<br />Sunk costs<br />Selective Perception<br />Randomness<br />Confirmation<br />representation<br />framing<br />Availability<br />
  15. 15. OVERCOMING BARRIERS TO EFFECTIVE DECISION MAKING<br />ACCEPTING THE PROBLEM CHALLENGE<br />COMPLACENCY : A condition in which individuals either do not see the signs of danger or opportunity or ignore them<br />e.g. : It occurs when an individual immediately accepts a job offer that looks good, without assessing the situation thoroughly<br />DEFENSIVE AVOIDANCE: A condition in which individuals either deny the importance of a danger or an opportunity or deny any responsibility for taking action<br />e.g. : All three forms came into play when officials at Barings Bank in London ignored warning signs that<br /><ul><li>Singapore based 28 year old Nicholas Leeson was taking unwarranted risks
  16. 16. Led to loss > $1 billion & collapse of the Bank</li></li></ul><li>PANIC:A reaction in which individuals become so upset that <br /> they frantically seek a way to solve a problem. <br /> 4. DECIDING TO DECIDE:A response in which decision makers accept the challenge of deciding what to do about a problem and follow an effective decision making process<br />
  17. 17. Guideline for making decision more effective<br /><ul><li>Categorical interpretation- the problem should be defined properly.
  18. 18. Application of limiting factor- limiting factor should be taken into account in order to analyze the external S & W.
  19. 19. Adequate information- more quantity of reliable information leads to effective decision making.
  20. 20. Considering other views- various views at the same point are taken into account for quality decision.
  21. 21. Timeliness- decision should be ,made at proper time to meet the competitive advantages.</li></li></ul><li>Techniques for improving decision making<br /><ul><li>Brainstorming – idea generation for decision making.
  22. 22. Nominal group technique (NGT)- problem outlined, presentation of solution in written form, discussion over written solutions, and final decision.
  23. 23. Delphi technique- decision made on the basis of questionnaire filled by the respondents.
  24. 24. Consensus mapping- decision made on the basis of the report presented by the representative of each group after </li></li></ul><li>THANK YOU<br />Divya Suryavanshi<br />Roll no : 8396<br />

×