This document outlines the key aspects of decision making, including: - A decision is a choice between two or more alternatives. The decision making process involves 8 steps: identifying the problem, criteria, alternatives, analysis, selection, implementation, and evaluation. - Managers are frequently decision makers. Their decisions can be rational, bounded rational, or based on intuition depending on the situation. - Problems can be structured or unstructured, and decisions are programmed or non-programmed accordingly. Crisis management also requires unique decision making. - Decision making depends on the environment being certain, risky, or uncertain. Decision making styles also vary in thinking and tolerance for ambiguity.

1. Decision MakingDecision Making

2. Decision & Decision Making ProcessDecision & Decision Making Process
- A choice from two or more alternatives.
- A set of eight steps that include identifying a
problem, selecting an alternative, and evaluating the
decision’s effectiveness

3. Decision Making Process……Decision Making Process……
Step 1 – Identifying a problemIdentifying a problem
Problem- A discrepancy between an existing and a
desired state of affairs
Step 2 – Identification of decision criteriaIdentification of decision criteria
Criteria – That define what’s relevant in a problem

4. Decision Making Process……Decision Making Process……
Step 3 – Allocating weights to the criteriaAllocating weights to the criteria
Prioritising
 Step 4 – Developing AlternativesDeveloping Alternatives
List the viable alternatives
 Step 5 – Analysing AlternativesAnalysing Alternatives
Appraising alternative against each criteria established in
steps 2 & 3

5. Decision Making Process……Decision Making Process……
Step 6 – Selecting an alternativeSelecting an alternative
Chosing the best alternative from
amoung those considered
Step 7 – Implementing theImplementing the
AlternativeAlternative
Implementing decisions effectively –
Planning – organising - Leading

6. Decision Making ProcessDecision Making Process
Step 8 – Evaluating Decision effectiveness
Evaluation by –CONTROL

7. Manager As Decision MakerManager As Decision Maker
Mangers are frequently called Decision Maker
Decision Making is synonyms to Management

8. Making DecisionsMaking Decisions
Rationality – Bounded Rationality - IntuitionRationality – Bounded Rationality - Intuition
Rational Decision Making
Describes choices that are consistent and value
maximising with in specified constraints.
Assumptions in Rationality :-
. The problem is clear and unambiguous
. A single, well defined goal is to be achieved.
. All alternatives and cosequences are known
. Prefrences are clear constant and stable
. No time or cost constraints exist.

9. Bounded RationalityBounded Rationality
Decision making behaviour is rational, but limited
by an individual’s ability to process information.
Satisficing – Acceptance of solutions that are
good enough.
Escalation of commitment – An increased
commitment to a previous decision despite
evidence that it may have been wrong

10. IntuitionIntuition
Making decisions on the basis of experience,
feelings, and accumulated jugement.
Intuition
Experienced Based
Affect - initiated
Subconscious
Mental processing
Values or ethics
Based
Cognitive - Based

11. Types of Problems & DecisionsTypes of Problems & Decisions
 Structured Problems – Programmed
decisions
- Straight forward, familiar and easily defined problems
Programmed decisions
- A repetitive decision that can be handled by a routine
approach
- Procedure
- policy
- Rules

12. Types of Problems & DecisionsTypes of Problems & Decisions
Unstructured Problems – Nonprogrammed
decisions
- Problems that are new or unusual and for which
information is ambiguous or incomplete
- A specific decision crafted for a unique problem

13. Types of Problems & DecisionsTypes of Problems & Decisions
Crisis and Crisis Management
Crisis is an unexpected problem that can lead to a
disaster if not resolved quickly and appropriately.
Crisis Management is preparation for the
management of crisis that threaten an organisation’s
health and well-being.
Crisis Management teams & Plans can be developed
to deal with various contingencies

14. Decision Making Conditions/Decision Making Conditions/
EnvironmentsEnvironments
Certain Environment
A situation offers complete information on possible action
alternatives and their consequences.
Risk Environment
Lacks complete information but offers probabilities of the
likely out comes for possible action alternatives
 Uncertain Environment
A situation lacks so much information that is difficult to
assign probabilities to the likely out comes of alternatives

15. Decision Making StylesDecision Making Styles
Decision making styles differ along two
dimentions:-
1) Way of Thinking
2) Tolerance for Ambiguity of an individual

16. Decision Making StylesDecision Making Styles
Directive Style
Analytic Style
Conceptual Style
Behavioural style

17. Decision Making StylesDecision Making Styles
High
Low
rational Intuitive
Analytic
Concep-
tual
Directive
Behav-
ioral
Tolerance
For
Ambiguity
Way of Thinking

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