This document discusses decision making and group decision making. It defines decision making as choosing between alternative courses of action. There are different types of decisions based on factors like frequency, importance and complexity. The document outlines several models of decision making, including rational, satisficing, implicit favorite, and intuitive models. It also discusses decision trees as a tool to represent sequential decisions. Group decision making is described as a process that can generate more alternatives but also requires effective management to avoid issues like conflict and unclear responsibilities. Techniques for improving group decision making include brainstorming, the Delphi method, and nominal group technique.

1. By:
Shiva Shrestha
Lecturer
Hetauda School Of Management
Hetauda
Shiva Shrestha, HSM, Hetauda 7 November 2014 1

2.  Definition
 Types of Decisions
 Decision Making Conditions
 Decision Making Process
 Models of Decision Making Process
 Decision Trees
 Decision Styles
 Decision Theories
 Group Decision Making
 Improving Decision Making
Shiva Shrestha, HSM, Hetauda 7 November 2014 2

3.  Decision is “ an act of making choices”
 A decision is a choice among alternative
course of action of dealing with a problem.
 In fact, it is a complete mental activity.
 Decision are the response to problem and the
results of a process of thought and deliberation.
 Decision making is the act of choosing one
alternative from among a set of alternatives.
 Decision Theory provides an analytical and
systematic approach to the study of Decision
making.
Shiva Shrestha, HSM, Hetauda 7 November 2014 3

4.  Decision Alternatives: There is a finite
number of decision alternatives available
with the decision-maker at each point in
time when a decision is made. The number
and type of such alternatives may depend
on the previous decision made and on what
has happened subsequent to those
decisions. These alternatives are also called
courses of action[ action, acts or strategies]
and are under control and known to the
decision maker.
Shiva Shrestha, HSM, Hetauda 7 November 2014 4

5.  State Of Nature: A possible future condition
( consequence or event) resulting from the
choice of a decision alternatives depends
upon certain factors beyond the control of
the decision maker. For example: If the
decision is to carry an umbrella or not, the
consequence [ get wet or do not] depends on
what action nature takes.
 Payoff: A numerical value resulting from each
possible combination of alternatives and state
of nature is called payoff. The payoff values
are always conditional values because of
unknown state of nature.
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6.  Frequency(programmed and non-programmed)
 importance(major and minor)
 nature(routine and strategic)
 complexity(simple and complex)
 number of person involved(individual and
group decision)
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7.  Certainty
 Risk
 Uncertainty
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9. Shiva Shrestha, HSM, Hetauda 7 November 2014 9

10. Shiva Shrestha, HSM, Hetauda 7 November 2014 10

11.  Classical or Rational Model
 Satisfying Model
 Implicit Favorite Model
 Intutive Model
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12.  obtain complete and perfect information
 eliminate uncertainty and risk
 evaluate everything rationally and logically
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13. 1. Investigate the situation
 Define problem
 Diagnose causes
 identify decision objectives
2. Develop Alternatives
 seek creative alternative
 Do not evaluate yet
3. Evaluate Alternative and select the best one
 Evaluate alternatives
 Select best alternatives
4. Implement and monitor
 Plan implementation
 Monitor implementation and make necessary adjustment
Shiva Shrestha, HSM, Hetauda 7 November 2014 13

14. Here,
Expand on
alternative
s
Does alternative
meet satisficing
Criteria?
Problem
identified
Select first
alternative
that meets
criteria and
is considered
“good
enough”
Problem
simplified
Satisficing
criteria set
Identify
alternatives
Compare
alternatives
one at a time
against criteria
YES
NO
Shiva Shrestha, HSM, Hetauda 7 November 2014 14

15.  See here,
Need for a
decision is
determined
Select an
implicit
favorite
alternative
Identify
other
alternatives
Establish
criteria to
match implicit
favorite
Confirm
implicit
favorite
Compare
alternatives with
implicit favorite
criteria
Select
implicit
favorite
1 2 3
4
5
Shiva Shrestha, HSM, Hetauda 7 November 2014 15

16.  When high level of uncertainty exists
 When the variables are less scientifically
predictable
 When facts are limited
 When the facts do not point the way to go
 When analytical data are of little use
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17.  graphic form of a number of possible future
events that may affect a decision.
 it is one the devices for representing a
diagrammatic presentation of sequential and
multi-dimensional aspects of a particular
decision problem for systematic analysis and
evaluation is decision tree.
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18.  Three types of “nodes” are used:
◦ Decision nodes - represented by squares (□)
◦ Chance nodes - represented by circles (Ο)
◦ Terminal nodes - represented by triangles
(optional)
 Solving the tree involves pruning all but the
best decisions at decision nodes, and finding
expected values of all possible states of
nature at chance nodes
 Create the tree from left to right
 Solve the tree from right to left

19. Decision
node
Chance
node
Event 1
Event 2
Event 3

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21.  GDM refers the decision which are taken by a
group of organizational members.
 Group can make higher quality decision than
individual.
 GDM is appropriate for non programmed
decision.

22.  Generates more information ,ideas and
solutions.
 Generates the more alternatives .
 Increase the acceptance of the solution.
 Builds the leadership skills.

23.  Require better group management skill.
 Create conflict between the supervisor and
subordinates.
 Time consuming.
 Unclear responsibility.

24.  To improve the decision making following
guidelines can be used by manager.
1. Improving individual decision making.
2. Improving group decision making.

25.  Increase the information input.
 Proper communication.
 Select appropriate timing
 change the personal habit.
 Avoid the prejudice and biasness.
 Calculate the risk.

26.  Following technique are used to improve the
GDM.
a. Interacting group.
b. Brainstorming.
c. Delphi technique .
d. Nominal group technique
e. Electronic meeting

27.  Involving 5 to 10 person
 individual generates ideas.
 All the generated ideas are written in the
board.
 No ideas can be criticized.

28.  Similar to brainstorming.
 It is the structure technique used to generate
the creative and innovative ideas.
 That idea will be accepted which holds the
highest rank.

29.  This method is traditional method.
 In this method all the member meet face to
face and convey their information orally or
non orally.
 All member provide equal opportunity to
provoke their experience.

30.  There is no face to face contact.
 Each member writes comment, suggestion
and solution of the problem.
 All the comment are sent to the central
location.
 Each member is sent the written comment of
all other member.
 Each member provides feedback on others
comment and forward to central location.

31.  Thank you !!!
Shiva Shrestha, HSM, Hetauda 7 November 2014 31