Decision making in Corporate Work place

1. Decision
Making

2. Index
 What is Decision Making?
 The Significance of Decision Making
 Decision-making Process
 Decision Making Model
 Categories of Decisions
 Group Decision-making

3. What is decision-making?
 The central activities of management and is a huge part of any process
of implementation
 A decision is a judgment

4. • The one truly distinctive characteristic of managers
The Significance of Decision Making
• Decisions made by top managers commit the total organization toward
particular courses of action
• Decisions made by lower levels of management implement the strategic
decisions of top managers in the operating areas of the organization
• Decisions invariably involve organizational change and the commitment of
scarce resources

5. Decision-making
Process
Identifying a problem
Identifying decision criteria
Allocating weights to criteria
Analyzing alternatives
Selecting an alternative
Implementing the alternative
Evaluation (of decision effectiveness)

6. Categories of Decisions
Programmed Decisions:
• A decision that is repetitive and routine
• A definite method for its solution can be established
• Does not have to be treated a new each time it occurs
• Procedures are often already laid out
Examples: pricing, standard customer orders, determining billing
dates

7. Non-programmed Decisions:
• A decision that is novel (new or unique)
• No established methods exist, because it has never occurred before
• It is too complex
• Are “tough” decisions that involve risk and uncertainty
Examples: Moving into a new market

8. Decision Making Model
Rational Model: Assumptions
• Clear and unambiguous problem
• Single, well-defined goal
• All alternatives are known
• Clear preferences
• No time or cost constraints

9. Rational Model: Criticism
• Not all decisions made on rational basis
• Most problems, goals and preferences are not clear or well defined
• Not practical to know all possible alternatives
• Time and cost constraints exist in all practical problems

10. Bounded Rational Model: Assumptions
• Limited set of criteria
• Self-interest influences ratings
• Self-interest influences ratings
• Alternatives are assessed one at a time till a satisficing (or good
enough) alternative is found

11. The factors requiring group decisions include:
Group Decision-making
• Involving sensitive issues
• High cost alternatives
• Involving very high risk factor
• Strategic impact