The document outlines the decision making process, including identifying the problem, criteria, alternatives, and implementing the chosen alternative. It discusses types of decisions like programmed and non-programmed. The 8 step decision making process is described in detail, including identifying the problem, criteria, weights, alternatives, analyzing alternatives, selecting an alternative, implementing, and evaluating. Different decision making styles like directive, analytic, conceptual and behavioral are also covered.

2. Decision Making
6–2

3. 6–3

4. Outline of the presentation
•Define decision
•Decision-making process.
•Types of decisions
•Basis on which decision is taken
•Issues in decision making
•Describe the eight steps in the decision-
making process.
•Style of decision making
•Characteristics of decision making
•References

5. 5
Decisions
• A decision is a choice from among the available
alternatives
• Judgment - the “thinking” aspects of the
decision-making process
• A choice made between alternative courses of
action in a situation of uncertainty.
the act or process of deciding
• a determination arrived at after consideration

6. 6
Decisions making
•Decision making - the process
by which managers respond
to opportunities and threats
by analyzing options, and
making decisions about goals
and courses of action

7. 7
Types of Problems and Decisions
• Problem Types
Well-structured: routine, repetitive, normal problems
with much certainty regarding cause-and-effect
relationships
Ill-structured: novel, unknown criteria, have not been
encountered before
• Decision Types
Programmed: a decision that is repetitive and routine,
with a definite procedure developed for handling it - use
management science, computations, and rules
Non-programmed: no pre-programmed answer exists
because the problem is complex, extremely important,
and/or never before experienced - reliance is placed on
principles and processes with emphasis on judgment,
intuition and creativity

8. DECISION INGREDIENTS
• FACTS
• KNOWLEDGE
• EXPERIENCE
• ANALYSIS
• JUGDEMENT

9. KEY ELEMENTS IN A DECISION
• DECISION BODY (AUTHORITY TO MAKE
DECISION)
• DECISION OPTIONS
• UNCONTROLLABLE FACTORS
• CONSEQUENCES OF EACH OPTION

10. ISSUE INVOLVED IN
DECISION MAKING
• PREJUDICE
• SHOWMANSHIP
• ANALOGY
• TRANSFER
• IRRELEVANT INFORMATION
• FACTS
• INFORMATION SOURCES
• FAMILIARITY

11. CHALLENGES FOR DECISION MAKERS
• COMPLEXITY
• UNCERTAINITY
• DIFFERENT INFORMATION PROCESSING
STYLES

12. ENVIRONMENT OF DECISION MAKING
• TECHNICAL
• LEGAL
• POLITICAL
• ECONOMIC
• DEMOGRAPHIC
• ECOLOGICAL
• CULTURAL

13. 6–13
8 Step Decision-Making Process
EXHIBIT 4.2

14. 6–14
Step 1: Identifying the Problem
• Problem
A discrepancy between an existing and desired state
of affairs.
• Characteristics of Problems
A problem becomes a problem when a manager
becomes aware of it.
There is pressure to solve the problem.
The manager must have the authority, information, or
resources needed to solve the problem.

15. 6–15
Step 2: Identifying Decision Criteria
• Decision criteria are factors that are important
(relevant) to resolving the problem.
Costs that will be incurred (investments required)
Risks likely to be encountered (chance of failure)
Outcomes that are desired (growth of the firm)
Step 3: Allocating Weights to the Criteria
• Decision criteria are not of equal importance:
Assigning a weight to each item places the items in
the correct priority order of their importance in the
decision making process.

16. 6–16
Step 4: Developing Alternatives
• Identifying viable alternatives
Alternatives are listed (without evaluation) that can
resolve the problem.
Step 5: Analyzing Alternatives
• Appraising each alternative’s strengths and
weaknesses
An alternative’s appraisal is based on its ability to
resolve the issues identified in steps 2 and 3.

17. 6–17
Step 6: Selecting an Alternative
• Choosing the best alternative
The alternative with the highest total weight is
chosen.
Step 7: Implementing the Decision
• Putting the chosen alternative into action.
Conveying the decision to and gaining commitment
from those who will carry out the decision.

18. 6–18
Step 8: Evaluating the Decision’s
Effectiveness
• The soundness of the decision is judged by its
outcomes.
How effectively was the problem resolved by
outcomes resulting from the chosen alternatives?
If the problem was not resolved, what went wrong?

19. 6–19
Decision-Making Styles (cont’d)
• Types of Decision Makers
Directive
 Use minimal information and consider few alternatives.
Analytic
 Make careful decisions in unique situations.
Conceptual
 Maintain a broad outlook and consider many
alternatives in making long-term decisions.
Behavioral
 Avoid conflict by working well with others and being
receptive to suggestions.

20. 6–20
Characteristics of an Effective Decision-
Making Process
• It focuses on what is important.
• It is logical and consistent.
• It acknowledges both subjective and objective
thinking and blends analytical with intuitive thinking
• It requires only as much information and analysis as
is necessary to resolve a particular dilemma.
• It encourages and guides the gathering of relevant
information and informed opinion.
• It is straightforward, reliable, easy to use, and
flexible.

21. References
• Robbins, S. Coulter M. (2010). Management. USA:
Prentice Hall.
• https://smallbusiness.chron.com
• https://www.emergenetics.com
• https://2012books.lardbucket.org
• http://www.assignmentpoint.com
• https://managementstudyguide.com
• https://www.mindtools.com