This document discusses decision making models and processes. It begins by defining decision making and listing common decision making models, including the rational model, bounded rational model, and emotional model. It then discusses types of decisions, conditions for decision making, goals in decision making, decision making skills, and quantitative versus qualitative decisions. Finally, it outlines the typical 7 step rational decision making process and discusses techniques for group decision making such as brainstorming, the nominal group technique, the Delphi technique, and electronic meetings.

1. CHAPTER 7 – DECISION-MAKING

2. MEMBERS OF GROUP :
 Nurashikin bt Sharif
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 Khursyah bt Ibrahim
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 Nur Aidayu bt Shaharudin
08DPM10F2044
 Juliana bt Ab Jalil
08DPM10F2065

3. Definition of Decision
Making
 Huber (1980) - Problem solving
process refers to a set of activities
which involves exploring and
implementing corrective action in a
certain condition.
 A selection made between two or
more alternatives. A selection is
made after analysing the available
alternatives and this is followed with

4. DECISION-MAKING
MODELS
Ratio Boun
ded Emoti
nal
Mod Ratio onal
el nal model
Ratio

5. Rational Model
Permits the minimum
achievement of an objective
within the limitation to which
the decision is an objective.
In the rational model, the
manager addresses how best
to achieve objectives. The
rational model is divided into

6. Bounded Rational Model
Herbet Simon in the mind
1950s introduced his
pioneering research into the
decision-making process
within business organizations.
The model emphasized the
limitations of the individual’s
rationality, where is provides

7. Emotional model
An individual does not
think logically. The pattern
for making a decision is in
a heuristic format. This
model can save time but

8. Authority in Decision-
Making
Managers must take various
decision in order to ensure
that the organization is
running smoothly.
Two factors can be
determine:

9. Table 7.1 Advantages and Disadvantages
of Participative Decision Making
Advantages Disadvantages
Time-consuming: waste
More problems can be resources if used for
solved. programmed decision or
strategic planning.
More knowledge, facts Decision may not
and alternative can be satisfy every
evaluated. employee/manager.
Discussion clarifies Groupnorms may
ambiguous problems and reduce dissent and better
reduces uncertainty opinion.
about decision-making.
Participation fosters No clear focus for

10. Types of Decision
 Programmed decisions
- made based on the set of
policies, rules, and procedures.
- every organization has written and
unwritten rules that can be followed
by manager and other employees to
make decision.
- this approach is useful for lower-
level managers in solving problems.

11.  Non-programmed decisions
>>>non-programmed decisions
are used to solve unique or
extraordinary problems.
>>>used by top-line managers
to solve complicated and

12. Conditions of Decision-
Making
There are three different
Certainty :
making decision
conditions
Risky
conditions
Uncertainty
conditions

13. 1. Certainty conditions
Will usually thinks of a problem based on
the level of certainty and risk.
Manager will be able to predict what will
happen in the future.
They also have an adequate and complete
knowledge about the matter. This enables
them to list the outcomes of implementing
the available alternatives.
 Assuming that all the information
obtained is complete and reliable.
 Based list of outcomes, manager will

14. 2. Risky conditions
Whereby managers would only be
able to roughly predict the outcome
of implementing the alternative due
to limited knowledge and
information.
Determined through objective
probability whereby a mathematical
model is used, or through subjective
probability which is based on the
managers experience and

15. 3. Uncertainty conditions
 Refer to conditions whereby
decision-makers are unsure or
unable to predict the outcome of an
action.
 As manager, do not have any
information on the outcome of
implementing an alternative.
 As manager do not have adequate
information they must make their
own judgement based on past

16. Goals and Decision Making
 Goals called objectives, purposes, deadlines or
targets.
 Goals or objective are basically result that are
achieved. They indicate the direction in which
decisions and actions should be aimed.
 Decision making under risk and certainty in an
organization directly complies with objectives or
goals in 2 ways
(a) The decision-making process is triggered by a
search for a better way to achieve objective
(b) The decision-making process is triggered by an
effort to discover new plans, revise current
plans, or cancel current plans.

17. Decision-Making Skills
1) Various problem in organization
must be solved promptly by the
management.
2) The ability to select the best
alternative require manager
who have decision making.
3) In a decision making process
involving the opportunity to do

18. 4)Manager need to depend on
their past experience to
make decision.
5)It depends on the
willingness to accept risk
and uncertainties.

19. Quantitative decision
 Refer to decision that made
based on a set data values that
obtained and processed using
several mathematical method to
predict future value.
 Widely used due:
I. Produce accurate decision and
is accepted as a tool to facilitate
the planning process

20. Statistics have been used
because it is an area that is
closely related to research.
In general, it is a
mathematical techniques
to

21. Qualitative decision
 Made based on the opinion and
knowledge of experts when
comprehensive past data cannot
be obtained by decision maker.
 Steps that need to be taken by
the manager:
a) Prioritize the problem
b) Obtain the relevant information

22. The Decision-Making
Process
 Outcomes is the selection made
from a list of available
alternatives.
 The decision-making process that
managers follow will influence
the quality of decisions made.

23. 7 Steps of Rational Decision-Making
Process
Identify the problem
Form alternatives
Analyse the alternatives
Select the best
alternatives
Implement a decision
Evaluate the decision
Take follow-up action

24. Decision-Making
Techniques

25. Group Decision Making
Many decision have a
importance effect on
activities and human
resources organization by
group or team in that

26. Advantages
 Able to collect more
information
 Able to form many effective
alternatives
 High acceptance level

27. Disadvantages
 Takes a longer time
 Minority domination
 Pressure to follow a decision
 Unclear responsibilities

28. Ways to improve group
decision-making

29. Brainstorming
 A process of generating
information that encourages
the collection of alternatives
without criticism.
 A process whereby every
member provide his ideas and
the best ideas will be selected

30. Nominal Group Technique
 limits discussions held
during the decision-making
process.
 all members are involved
in the decision-making
process.

31. Step :
1) meeting
2) present
3) record
4) discussion

32. Delphi Technique
a group decision-making

technique that is more
complex and takes time.
 doesnot allow team
members to meet face to
face.

33. Step :
i. identify the problem.
ii. members are instructed to provide
solutions through a series of
specifically designed
questionnaires.
iii. every members completes the
questionnaires in private.
iv. the results of the first
questionnaire are compiled in one
location and duplicated.

34. Electronic Meeting
the latest approach in group
decision-making.
 covers the nominal group
technique and the usage of a
sophisticated computerr
technology.

35. Step:
i. Computers are installed in
the meeting room.
ii. 50 members will have a
meeting through the
computer network.
iii.Issues will be given to
participants

36. Thank you… ^^,