The document discusses decision making in public administration. It defines decision as a choice between two or more alternatives and decision making as the process of choosing the best alternative to reach objectives. It outlines the rational decision making model as an 8 step process involving identifying problems and criteria, weighting criteria, developing and analyzing alternatives, selecting an alternative, implementing it, and evaluating effectiveness. It also discusses assumptions of rational decision making and bounded rationality, where managers have limits on fully rational decisions due to constraints of time, information, and knowledge. Finally, it outlines different decision making conditions of certainty, risk, and uncertainty.

1. Decision Making
Sarfraz Hussain
0321-4912664
fras4u@gmail.com

2. Topics
• What is ‘Decision’ & Decision Making
• Types of decisions
• Rational Decision Making Model
• The manager’s role as decision maker

3. • Decision making is the essence of public
administration.
• It’s what public managers do (or try to avoid).
• Public managers need to make good decisions
because they’re judged on the outcomes of
those decisions.
• Managers at all levels and in all areas of
organizations make decisions.

4. Definition
• A Decision is a choice made between two or
more alternatives.
• Decision Making is the process of choosing the
best alternative for reaching objectives.
• Public Managers come across ‘decision
situations’ daily.

5. Types of Decisions
• Structured Problems & Programmed Decisions
– Are routine and repetitive
– Organizations develop typical ways to handle them,
most of the time with ease and comfort
• Unstructured Problems & Nonprogrammed
Decisions
– Problems are new or unusual and for which
information is ambiguous or incomplete.
– Are one-shot decisions that are usually less structured
than programmed decisions.
• Crisis/Disaster & Crisis/Disaster Management

6. Level of managers for making decisions
Narrow
Decisions scope
Intermediate
decisions scope
Broad decisions
scope
Lower level
managers make
decisions
Mid level
managers make
decisions
Top level managers
make decisions
Responsibility
for decision
making

7. Rational Decision Making Process

8. Let’s Build a Scenario
• upon citizens’ complaints, media reports and
opposition’s criticism, government is under pressure to
regulate drug stores and illegal clinics.
• It has directed the Drug Regulatory Authority to
regulate.
• A District Drug Administrator reports growth of illegal
clinics and unregistered drug stores.
• inadequate inspection of drug stores and illegal clinics
in his district.
• A team of 12 Inspectors is under pressure to improving
performance and increasing coverage of their weakly
inspections.
• They have demanded 12 new vehicles for the task.

9. • Fuel Efficiency (Mileage) • Price •
Safety Features • After Sales Service • Life
1.Identify a
problem
Fuel Efficiency--------------------------- 10
Price....................................................8
Safety Features................................. 8
After Sales Services........................... 4
Life of the Vehicle............................. 3
“Drug Inspectors need new vehicles”
3.Allocate
weights to the
criteria
Toyota Nissan Sunny
Honda Motors Hyundai
Mercedes Benz Mitsubishi
Toyota Nissan Sunny
Honda City Hyundai
Mercedes Benz Mitsubishi
4.Develop
alternatives
Buy Honda City
2.Identify decision
criteria
5.Analyze
alternatives
6.Select an
alternatives
7. implement
the alternatives
8.Evaluate
decision
effectiveness
Toyota Nissan Sunny
Honda City Hyundai
Kia Mitsubishi

10. The 08 steps process details
• Step 1: Identifying a Problem
– a problem situation demands that something needed
to be done
– but few problems are that obvious.
– Managers not to confuse problems with symptoms of
the problem.
– problem identification is subjective
• Step 2: Identifying Decision Criteria
– Every decision maker has criteria guiding his or her
decisions even if they’re not explicitly stated
– It’s a cognitive process (conceptual skills)

11. • Step 3: Allocating Weights to the Criteria
– If the relevant criteria aren’t equally important,
the decision maker must weight the items
– in order to give them the correct priority in the
decision (analytical skills)
• Step 4: Developing Alternatives
– It requires the decision maker to list viable
alternatives that could resolve the problem
– decision maker needs to be creative (conceptual
and analytical skills)

12. • Step 5: Analyzing Alternatives
– evaluate each alternative
– Assess values of alternatives
– Keep organization goals in mind
• Step 6: Selecting an Alternative
– The sixth step in the decision-making process is
choosing the best alternative
– or the one that generated the highest total in Step
5

13. • Step 7: Implementing the Alternative
– you put the decision into action by conveying it to
those affected (communication and coordination skills )
– getting their commitment to it (leading and
controlling).
• Step 8: Evaluating Decision Effectiveness
– The feedback loop

14. Are Public Managers Really Rational?
• We assume that managers will use rational
decision making;
that is,
• they’ll make logical and consistent choices to
maximize value (benefits) for the
organization/agency

15. ASSUMPTIONS OF RATIONALITY
• A rational decision maker;
– would be fully objective and logical (impersonal,
emotionless).
– The problem faced would be clear and unambiguous,
– would have a clear and specific goal
– knows all possible alternatives and consequences.
– rational decision would lead to selecting the
alternative that maximizes the likelihood of achieving
that goal.
– Finally, decisions are made in the best interests of the
organization, not the personal or group interest

16. Making Decisions: Bounded Rationality
• Herbert Simon questioned the ability of
managers to make rational decisions.
• managers are not able to make perfectly rational
decisions
• He put forth the idea that managers deal with
bounded rationality.
– which says that managers make decisions rationally,
but are limited (bounded) by their ability to process
information.
• It refers to the fact that mangers are bounded in
terms of time, computational power, and
knowledge when making decisions

17. • Because they can’t possibly analyze all
information on all alternatives, managers
satisfice, rather than maximize the value.
• That is, they accept solutions that are “good
enough.”
• They’re being rational within the limits
(bounds) of their ability to process
information

18. Decision-Making Conditions
• Certainty
– a situation where a manager can make accurate
decisions because the outcome of every alternative is
known
• Risk
– conditions in which the decision maker is able to
estimate the likelihood of certain outcomes.
– Under risk, managers have historical data from past
personal experiences or secondary information that
lets them assign probabilities to different alternatives
• Uncertainty
– if managers face a decision situation where they are
not certain about the outcomes and can’t even make
reasonable probability estimates.

19. Thirsty crow vs clever crow making decisions
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