STEPS IN AN EFFECTIVE DECISION MAKING PROCESS<br />
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 />
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 />
Programmed vs. Non-programmed <br />Decisions : <br />
EXAMPLES OF MANAGERIAL DECISION MAKING SITUATIONS<br />
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 />
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 />
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 />
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 />
GROUP DECISION MAKING<br />ADVANTAGES & DISADVANTAGES OF GROUP DECISION MAKING<br />
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
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 />
Guideline for making decision more effective<br /><ul><li>Categorical interpretation- the problem should be defined properly.
Application of limiting factor- limiting factor should be taken into account in order to analyze the external S & W.
Adequate information- more quantity of reliable information leads to effective decision making.
Considering other views- various views at the same point are taken into account for quality decision.
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.
Nominal group technique (NGT)- problem outlined, presentation of solution in written form, discussion over written solutions, and final decision.
Delphi technique- decision made on the basis of questionnaire filled by the respondents.
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 />