The document discusses decision making and the decision making process. It defines decision making as the selection of a course of action from alternatives based on criteria. There are 6 main steps to the decision making process: 1) identifying and diagnosing the problem, 2) identifying alternatives, 3) evaluating alternatives, 4) choosing an alternative, 5) implementing the decision, and 6) evaluating the decision. Decision types include strategic, programmed, non-programmed, organizational, personal, and group decisions. The evaluation and implementation stages are critical to ensuring the effective selection and success of the chosen decision.
Decision making, Importance of
Decision-Making, Characteristics of
Decision-Making, Essentials for effective
Decision-Making, Types/ categories of Problems and Decisions, TYPES OF BUSINESS DECISIONS, Open decision making System, Decision Making Environment, The Classical Model of decision making, Decision making process, Decision Making Style
Chapter Two
Decision Making
Decision Making: is defined as the process of selecting or choosing the best course of action from numbers of alternatives based on the criteria. Because managers are continually confronted with opportunities and problems, they must constantly analyze the effect of different decisions on their organizations and select the alternative that will move the firm toward its stated objectives.
Types of Decisions: Several authors believe that there are two types of decisions: programmed & non-programmed decisions.
A. Programmed decisions: These decisions are "programmable" because of a specific procedure can be worked out to resolve them based on experience in similar situations.
• Once a standard procedure has been established, it can be used to treat all like situations.
• They usually involve an organization's every day operational and administrative activities
• They are primarily found at the middle and lower levels of management.
• Data used in making a programmed decision usually are complete and well defined.
• Participants know the details and agree on how to resolve the problem.
B. Non-programmed Decisions: are used to solve nonrecurring problems/Non-Repetitive problems.
• No well-established procedure exists for handling them, primarily because managers do not have experience to draw upon.
• In contrast to programmed decisions, available data are usually incomplete.
• Non programmable decisions are commonly found at the middle and top levels of management and often is related to an organization's policy-making activities such as whether to add a product to the existing product line, to reorganize the company, or to acquire another firm, are examples
The steps in decision making process include the following:
1. Ascertain the need for a decision/Identify the problem:
The decision making process begins by determining a problem exists; that is, there is an unsatisfactory condition.
2. Establish decision criteria:
Once the need for a decision has been determined, there comes a need to establish decision criteria which requires identifying those characteristics that are important in making the decision.
3. Allocate weights to criteria
The identified criteria should be weighted based on their importance and arranged in priority. This is because some are obviously more important than others and we need to weight each criterion to reflect its importance in the decision.
4. Develop Alternatives
This involves developing a list of the alternative that may be viable in dealing with the stated problem.
5. Evaluate Alternatives
Once the alternatives are enumerated. The decision maker must critically evaluate each one and identify the strong and weak points when compared against the criteria and the weights established. In evaluating each alternative, we not only consider things that can be measured in numerical terms such as time and various types of fixed & operating costs,
Pom unit-ii, Principles of Management notes BBA I Semester OUBalasri Kamarapu
BBA notes, Osmania University, I sem, Principles of Management, PPT of Principles of Management, Osmania University BBA Notes, POM notes by NET qualified faculty
Decision Making: Decision Making Process, Stages in Decision Making, Individu...Ashish Hande
Decision Making: Decision Making Process, Stages in
Decision Making, Individual and Organizational Decision
Making, Decision Making Models, Information System
support for Decision Making Phases
ch 9 pptx about the dicision making......Pargianshu
deemed most favorable given the circumstances.
The process of decision-making is governed by a myriad of cognitive biases, heuristics, and situational influences that can either enhance or impede our ability to make sound choices. From the confirmation bias that skews our perceptions towards information that aligns with preexisting beliefs to the availability heuristic that overestimates the importance of readily available information, these cognitive shortcuts often lead to suboptimal decisions. Additionally, factors such as time constraints, stress, and social pressures can further complicate the decision-making process, increasing the likelihood of errors or irrational choices.
Despite these inherent challenges, humans possess remarkable adaptive capabilities that enable us to navigate the complexities of decision-making with varying degrees of success. Strategies such as rational analysis, intuition, and collaborative decision-making can help mitigate cognitive biases and enhance the quality of decisions. Moreover, the advent of technology has revolutionized decision-making processes, providing access to vast amounts of data, sophisticated algorithms, and decision support systems that augment human judgment and decision-making prowess.
In organizational settings, effective decision-making is paramount to success, driving strategic planning, resource allocation, and performance optimization. Leaders must cultivate a culture that fosters open communication, critical thinking, and accountability, empowering employees at all levels to contribute to the decision-making process. By embracing diversity of thought and fostering a climate of psychological safety, organizations can harness the collective wisdom of their teams to tackle complex challenges and capitalize on emerging opportunities.
Moreover, the field of decision science continues to evolve, yielding valuable insights into the underlying mechanisms of decision-making and informing strategies for improvement. From behavioral economics to neuroscientific research, interdisciplinary approaches offer new perspectives on human cognition and decision-making behavior, informing interventions aimed at promoting rationality, resilience, and ethical decision-making.
In conclusion, decision-making is a fundamental aspect of the human experience, shaping our individual trajectories and collective destinies. While fraught with challenges and complexities, effective decision-making is essential for navigating the uncertainties of life, driving progress, and achieving desired outcomes. By understanding the cognitive processes that underlie decision-making, leveraging adaptive strategies, and fostering a culture of collaboration and continuous learning, we can enhance our ability to make informed, ethical, and impactful decisions in an ever-changing world.deemed most favorable given the circumstances.
The process of decision-making is governed by a myriad of cognitive biases, heuristics, and situat
Decision making, Importance of
Decision-Making, Characteristics of
Decision-Making, Essentials for effective
Decision-Making, Types/ categories of Problems and Decisions, TYPES OF BUSINESS DECISIONS, Open decision making System, Decision Making Environment, The Classical Model of decision making, Decision making process, Decision Making Style
Chapter Two
Decision Making
Decision Making: is defined as the process of selecting or choosing the best course of action from numbers of alternatives based on the criteria. Because managers are continually confronted with opportunities and problems, they must constantly analyze the effect of different decisions on their organizations and select the alternative that will move the firm toward its stated objectives.
Types of Decisions: Several authors believe that there are two types of decisions: programmed & non-programmed decisions.
A. Programmed decisions: These decisions are "programmable" because of a specific procedure can be worked out to resolve them based on experience in similar situations.
• Once a standard procedure has been established, it can be used to treat all like situations.
• They usually involve an organization's every day operational and administrative activities
• They are primarily found at the middle and lower levels of management.
• Data used in making a programmed decision usually are complete and well defined.
• Participants know the details and agree on how to resolve the problem.
B. Non-programmed Decisions: are used to solve nonrecurring problems/Non-Repetitive problems.
• No well-established procedure exists for handling them, primarily because managers do not have experience to draw upon.
• In contrast to programmed decisions, available data are usually incomplete.
• Non programmable decisions are commonly found at the middle and top levels of management and often is related to an organization's policy-making activities such as whether to add a product to the existing product line, to reorganize the company, or to acquire another firm, are examples
The steps in decision making process include the following:
1. Ascertain the need for a decision/Identify the problem:
The decision making process begins by determining a problem exists; that is, there is an unsatisfactory condition.
2. Establish decision criteria:
Once the need for a decision has been determined, there comes a need to establish decision criteria which requires identifying those characteristics that are important in making the decision.
3. Allocate weights to criteria
The identified criteria should be weighted based on their importance and arranged in priority. This is because some are obviously more important than others and we need to weight each criterion to reflect its importance in the decision.
4. Develop Alternatives
This involves developing a list of the alternative that may be viable in dealing with the stated problem.
5. Evaluate Alternatives
Once the alternatives are enumerated. The decision maker must critically evaluate each one and identify the strong and weak points when compared against the criteria and the weights established. In evaluating each alternative, we not only consider things that can be measured in numerical terms such as time and various types of fixed & operating costs,
Pom unit-ii, Principles of Management notes BBA I Semester OUBalasri Kamarapu
BBA notes, Osmania University, I sem, Principles of Management, PPT of Principles of Management, Osmania University BBA Notes, POM notes by NET qualified faculty
Decision Making: Decision Making Process, Stages in Decision Making, Individu...Ashish Hande
Decision Making: Decision Making Process, Stages in
Decision Making, Individual and Organizational Decision
Making, Decision Making Models, Information System
support for Decision Making Phases
ch 9 pptx about the dicision making......Pargianshu
deemed most favorable given the circumstances.
The process of decision-making is governed by a myriad of cognitive biases, heuristics, and situational influences that can either enhance or impede our ability to make sound choices. From the confirmation bias that skews our perceptions towards information that aligns with preexisting beliefs to the availability heuristic that overestimates the importance of readily available information, these cognitive shortcuts often lead to suboptimal decisions. Additionally, factors such as time constraints, stress, and social pressures can further complicate the decision-making process, increasing the likelihood of errors or irrational choices.
Despite these inherent challenges, humans possess remarkable adaptive capabilities that enable us to navigate the complexities of decision-making with varying degrees of success. Strategies such as rational analysis, intuition, and collaborative decision-making can help mitigate cognitive biases and enhance the quality of decisions. Moreover, the advent of technology has revolutionized decision-making processes, providing access to vast amounts of data, sophisticated algorithms, and decision support systems that augment human judgment and decision-making prowess.
In organizational settings, effective decision-making is paramount to success, driving strategic planning, resource allocation, and performance optimization. Leaders must cultivate a culture that fosters open communication, critical thinking, and accountability, empowering employees at all levels to contribute to the decision-making process. By embracing diversity of thought and fostering a climate of psychological safety, organizations can harness the collective wisdom of their teams to tackle complex challenges and capitalize on emerging opportunities.
Moreover, the field of decision science continues to evolve, yielding valuable insights into the underlying mechanisms of decision-making and informing strategies for improvement. From behavioral economics to neuroscientific research, interdisciplinary approaches offer new perspectives on human cognition and decision-making behavior, informing interventions aimed at promoting rationality, resilience, and ethical decision-making.
In conclusion, decision-making is a fundamental aspect of the human experience, shaping our individual trajectories and collective destinies. While fraught with challenges and complexities, effective decision-making is essential for navigating the uncertainties of life, driving progress, and achieving desired outcomes. By understanding the cognitive processes that underlie decision-making, leveraging adaptive strategies, and fostering a culture of collaboration and continuous learning, we can enhance our ability to make informed, ethical, and impactful decisions in an ever-changing world.deemed most favorable given the circumstances.
The process of decision-making is governed by a myriad of cognitive biases, heuristics, and situat
Oprah Winfrey: A Leader in Media, Philanthropy, and Empowerment | CIO Women M...CIOWomenMagazine
This person is none other than Oprah Winfrey, a highly influential figure whose impact extends beyond television. This article will delve into the remarkable life and lasting legacy of Oprah. Her story serves as a reminder of the importance of perseverance, compassion, and firm determination.
The Team Member and Guest Experience - Lead and Take Care of your restaurant team. They are the people closest to and delivering Hospitality to your paying Guests!
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Senior Project and Engineering Leader Jim Smith.pdfJim Smith
I am a Project and Engineering Leader with extensive experience as a Business Operations Leader, Technical Project Manager, Engineering Manager and Operations Experience for Domestic and International companies such as Electrolux, Carrier, and Deutz. I have developed new products using Stage Gate development/MS Project/JIRA, for the pro-duction of Medical Equipment, Large Commercial Refrigeration Systems, Appliances, HVAC, and Diesel engines.
My experience includes:
Managed customized engineered refrigeration system projects with high voltage power panels from quote to ship, coordinating actions between electrical engineering, mechanical design and application engineering, purchasing, production, test, quality assurance and field installation. Managed projects $25k to $1M per project; 4-8 per month. (Hussmann refrigeration)
Successfully developed the $15-20M yearly corporate capital strategy for manufacturing, with the Executive Team and key stakeholders. Created project scope and specifications, business case, ROI, managed project plans with key personnel for nine consumer product manufacturing and distribution sites; to support the company’s strategic sales plan.
Over 15 years of experience managing and developing cost improvement projects with key Stakeholders, site Manufacturing Engineers, Mechanical Engineers, Maintenance, and facility support personnel to optimize pro-duction operations, safety, EHS, and new product development. (BioLab, Deutz, Caire)
Experience working as a Technical Manager developing new products with chemical engineers and packaging engineers to enhance and reduce the cost of retail products. I have led the activities of multiple engineering groups with diverse backgrounds.
Great experience managing the product development of products which utilize complex electrical controls, high voltage power panels, product testing, and commissioning.
Created project scope, business case, ROI for multiple capital projects to support electrotechnical assembly and CPG goods. Identified project cost, risk, success criteria, and performed equipment qualifications. (Carrier, Electrolux, Biolab, Price, Hussmann)
Created detailed projects plans using MS Project, Gant charts in excel, and updated new product development in Jira for stakeholders and project team members including critical path.
Great knowledge of ISO9001, NFPA, OSHA regulations.
User level knowledge of MRP/SAP, MS Project, Powerpoint, Visio, Mastercontrol, JIRA, Power BI and Tableau.
I appreciate your consideration, and look forward to discussing this role with you, and how I can lead your company’s growth and profitability. I can be contacted via LinkedIn via phone or E Mail.
Jim Smith
678-993-7195
jimsmith30024@gmail.com
The case study discusses the potential of drone delivery and the challenges that need to be addressed before it becomes widespread.
Key takeaways:
Drone delivery is in its early stages: Amazon's trial in the UK demonstrates the potential for faster deliveries, but it's still limited by regulations and technology.
Regulations are a major hurdle: Safety concerns around drone collisions with airplanes and people have led to restrictions on flight height and location.
Other challenges exist: Who will use drone delivery the most? Is it cost-effective compared to traditional delivery trucks?
Discussion questions:
Managerial challenges: Integrating drones requires planning for new infrastructure, training staff, and navigating regulations. There are also marketing and recruitment considerations specific to this technology.
External forces vary by country: Regulations, consumer acceptance, and infrastructure all differ between countries.
Demographics matter: Younger generations might be more receptive to drone delivery, while older populations might have concerns.
Stakeholders for Amazon: Customers, regulators, aviation authorities, and competitors are all stakeholders. Regulators likely hold the greatest influence as they determine the feasibility of drone delivery.
Artificial intelligence (AI) offers new opportunities to radically reinvent the way we do business. This study explores how CEOs and top decision makers around the world are responding to the transformative potential of AI.
3. Definition
Decision-making is the selection based on some
criteria from two or more possible alternatives. “-
—George R. Terry
A decision is an act of choice, wherein an executive
forms a conclusion about what must be done in a
given situation. A decision represents a course of
behaviour chosen from a number of possible
alternatives.
— Mc. Farland
4. Features
1. Decision making is a selection process and is
concerned with selecting the best type of alternative.
2. The decision taken is aimed at achieving the
organisational goals.
3. It is concerned with the detailed study of the available
alternatives for finding the best possible alternative.
5. Features
4. Decision making is a mental process.
5. It leads to commitment. The commitment depends
upon the nature of the decision whether short term or
long term.
7. Strategic Decisions
Strategic decisions are taken by upper and
middle-level management.
They usually relate to the policies of the firm
or the strategic plan for the future.
Such decisions require analysis and careful
study.
Because strategic decisions taken at this level
will affect the routine decisions.
8. Programmed decisions
Well structured, routine and repetitive, occurring on a regular basis.
They are usually made at lower levels in the organisation, have short-
term consequences and are based on readily available information.
A decision rule can be developed that tells the organisation or
decision maker which alternative to choose once the information is
available.
The decision rule ensures that a definite method for obtaining a
solution can be found and that the decision does not have to be
treated as something new each time it occurs.
Frequently simple formulae can be applied to the situation. Examples
of programmed decisions include ordering raw materials
9. Non-programmed decisions
Are new and unstructured and consequently a previously
established decision rule cannot be applied.
The organisation has no established procedures or records for
dealing with the decision, which can therefore appear to be
highly complex.
Non-programmed decisions tend to occur at higher levels in the
organisation, have long-term consequences and require a
degree of judgement and creativity.
Examples: decision to try an unproven technology or to expand
into a previously unknown market
10. PROGRAMMED V/s NON-PROGRAMMED DECISIONS
Well-structured Poorly structured
Routine New
Information available Little information
Taken at lower levels Taken at higher levels
Short time frame Long time frame
Decision rules and set
procedures used
Judgement and creativity
used
11. Organizational Decisions and Personal
Decisions
When an executive takes a decision in an official
capacity, on behalf of the organization, this is an
organizational decision. Such decisions can be
delegated to subordinates.
However, if the executive takes a decision in a personal
capacity, that does not relate to the organization in
any way this is a personal decision. Obviously, these
decisions cannot be delegated
12. Individual Decisions and Group
Decisions
Any decision taken by an individual in an official
capacity it is an individual decision. Organizations that
are smaller and have an autocratic style of
management rely on such decisions.
Group decisions are taken by a group or a collective of
the firm’s employees and management. For example,
decisions taken by the board of directors are a group
decision.
13. Decision Making Process
1. Identify and diagnose the problem.
2. Identify alternative solutions.
3. Evaluate alternatives.
4. Choose an alternative
5. Implement the decision.
6. Evaluate the decision
14.
15. Step 1: Problem identification and
diagnosis
The first stage of the decision-making process is recognising that a
problem exists and that action has to be taken.
A problem is a discrepancy between the current state of affairs and a
desired state of affairs.
Unless the problem is identified in precise terms, solutions are very
difficult to find.
In seeking to identify a problem, managers can use a variety of
sources of data
16. Step 1: Problem identification and
diagnosis
Problem identification must be followed by a willingness to do
something to rectify the situation.
Before taking action the problem needs accurate diagnosis.
Diagnosis involves assessing the true cause of the problem by
carefully selecting all relevant material and discarding information
which is not relevant to the problem at hand.
Sometimes decisions need to be made when a problem does not
exist:
Example, a company might want to grow rapidly to capitalise on
market opportunities and will have to decide on what route to take.
17. Step 2: Identification of alternatives
Managers should try to identify as many alternatives as
possible in order to broaden options for the
organisation.
In generating alternatives the organisation may look
toward ready-made solutions that have been tried
before, or custom-made solutions that have to be
designed specifically for the problem at hand.
In today’s business environment more and more
organisations are applying custom-made solutions to
enhance competitive advantage.
18. Step 2: Identification of alternatives
organisation seeking growth opportunities, some of
the alternatives open to the company are:
growth through acquisition
growth through establishing an overseas facility
using an agent to market and distribute the product
abroad
growth through diversification of the existing product
line.
19. Step 3: Evaluation of alternatives
A manager needs to evaluate each alternative in
order to choose the best one.
Costs and benefits associated with each option.
Most alternatives will have positive and negative
aspects and the manager will have to try to
balance anticipated outcomes
20. Step 3: Evaluation of alternatives
Depending on the situation, evaluation of alternatives
may be intuitive or based on scientific analysis.
When evaluating alternatives, managers may consider
the potential consequences of alternatives under
several different scenarios.
In doing so they can develop contingency plans which
can be implemented with possible future scenarios in
mind.
21. Step 3: Evaluation of alternatives
The organisation will consider the cost
associated with each option as well as
the time taken to complete each
alternative.
The chances of success of each of the
options will also have to be
considered, as will the impact of any
decision on employees, training and
culture.
22. Step 4: Choice of alternative
In coming to a decision the manager will be
confronted by many conflicting requirements that will
have to be taken into account. For example, some
trade-offs may involve quality versus acceptability of
the decision, and political and resource constraints.
23. Step 4: Choice of alternative
Based on an analysis of the market and the
organisation’s capabilities they decide to purchase a
small company with a strong market presence in a
geographical region presently unserved by the
organisation.
24. Step 5: Implementation
Once the decision has been made it needs to be
implemented.
This stage of the process is critical to the success of
the decision and is the key to effective decision
making.
The best alternative is worth nothing if it is not
implemented properly.
In order to successfully implement a decision,
managers must ensure that those who are
implementing it fully understand why the choice was
made, why it is being implemented, and are fully
committed to its success.
25. Step 5: Implementation
Decisions often fail at the implementation stage
because managers do not ensure that people
understand the rationale behind the decision and that
they are fully committed to it.
For this reason many organisations are attempting to
push decision making further down the organisation
to ensure that employees feel some sense of
ownership in the decisions that are made.
26. Step 5: Implementation
To implement the decision to acquire
another smaller business in a different
country requires good conceptual skills
and could prove challenging.
27. Step 6: Evaluation
Once the decision is implemented, it needs to be
evaluated to provide feedback.
The process of evaluation should take place at all
managerial levels.
This step allows managers to see the results of the
decision and to identify any adjustments that need to
be executed.
In almost all cases some form of adjustment will be
made to ensure a more favourable outcome.
Evaluation and feedback are not one-off activities,
however, and they should form part of an ongoing
process.
28. Step 6: Evaluation
As conditions change, decisions should be re-
evaluated to ensure that they are still the most
appropriate for the organisation.
Evaluation of the acquisition of a new business will be
measured on the success and profitability of the
venture.
As the primary goal of the decision was to increase
growth opportunities, the organisation should
carefully monitor growth rates.
29. Management Focus: Coca-Cola’s
negative decision frame
In the mid-1980s Coca-Cola was the biggest-
selling soft drink worldwide, yet the company
decided to change the formula and introduce a
‘new’ Coca-Cola to the market. The result was
disastrous: consumers disliked the new formula
and preferred the old one. As a result, after three
months the company had to reintroduce the old
formula, using the brand name Coca-Cola Classic.
What events led to the company taking such a
poor decision? The decision was the product of a
negative decision frame. Coca-Cola’s share of the
market had been steadily declining and the
company’s options were to make no changes and
continue to decline, or to take the risky option to
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30. Rationality
A process that is perfectly logical and
objective, whereby managers gather
information objectively, evaluate
available evidence, consider all
alternatives and eventually make
choices that will lead to the best
outcomes for the organisation.
31. Rationality
Such a rational approach to decision making
assumes that four conditions are fulfilled:
1. There is perfect knowledge of all the available
alternatives
2. There is perfect knowledge of all of the
consequences of the available alternatives.
3. Managers have the capacity to objectively
evaluate the consequences of the available
alternatives.
4. Managers have a well-structured and definite set
of procedures to allow them to make optimum
decisions.
32. Bounded rationality
Managers cannot always make decisions under
certainty conditions, and in a rational manner, they
have to apply a less than perfect form of rationality.
Herbert Simon called this ‘bounded rationality’, and
argued that decisions taken by managers are bounded
by limited mental capacity and emotions, and by
environmental factors over which they have no control.
Due to these limitations managers rarely maximise or
take ideal decisions with the best possible outcomes.
Editor's Notes
granting leave to employees, purchasing spare parts etc are programmed decisions where a specific procedure is followed