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Making Good Decision.pptx
- 2. Decision Making Effective leaders use the decision-making process to identify possible courses of action and to analyze each one. They invite others to participate in identifying and evaluating alternatives and selecting the best course of action.
- 3. The Decision-Making Process Programmed Decision - a simple, routine matter for which a manager has an established decision rule Nonprogrammed Decision - a new, complex decision that requires a creative solution
- 4. The Decision-Making Process Recognize the problem and the need for a decision Identify the objective of the decision Gather and evaluate data and diagnose the situation List and evaluate alternatives Select the best course of action Implement the decision Gather feedback Follow up
- 5. Decision making identifying the problem generating alternative solutions selecting a solution implementing and evaluating the solution
- 6. Simon’s Normative Model of Decision Making Based on the notion of bounded rationality, i.e. decision makers face a variety of constraints Decision making is characterized by * limited information processing * use of judgmental heuristics (rules, shortcuts) * satisficing
- 7. Improving Decision Making Through Effective Knowledge Management Systems and practices that increase the sharing of knowledge and information Types of knowledge Tacit knowledge – intuition, experience, natural abilities Explicit knowledge Explicit knowledge requires access to large amounts of information; tacit knowledge is obtained through observation, mentoring, collaboration, etc.
- 8. General Decision Making Styles based on how one perceives and comprehends stimuli and chooses to respond Value orientation – task and technical concerns or people and social concerns Tolerance for ambiguity – need of structure or control
- 9. Analytical Conceptual Directive Behavioral Tasks and Technical Concerns People and Social Concerns Value Orientation Low High
- 10. Group decision-making Data suggests that innovative groups possessed high levels of both minority dissent and participation in decision making Note four requirements of effective decision making in a group: Focus on process Understand requirements for an effective choice Assess positive qualities of alternative solutions Assess negative qualities of alternative solutions Suggests openness, acceptance of dissent?
- 11. Rational Model- a logical, step-by-step approach to decision making, with a thorough analysis of alternatives and their consequences 1. The outcome will be completely rational 2.The decision maker uses a consistent system of preferences to choose the best alternative 3. The decision maker is aware of all alternatives 4. The decision maker can calculate the probability of success for each alternative
- 12. Bounded Rationality Model-a theory that suggests that there are limits upon how rational a decision maker can actually be 1. Managers suggest the first satisfactory alternative 2. Managers recognize that their conception of the world is simple 3. Managers are comfortable making decisions without determining all the alternatives 4. Managers make decisions by rules of thumb or heuristics
- 13. Group-Aided Decision Making +++++++ - - - - - - - - - Greater pool of knowledge 1. Social pressure 2. Different perspectives 2. Minority domination 3. Greater comprehension 3. Logrolling 4. Increased acceptance 4. Goal displacement 5. Training ground 5. “Groupthink”
- 14. Garbage Can Model a theory that contends that decisions in organizations are random and unsystematic
- 15. Six Steps in Making an Effective Decision ANALYZE THE SITUATION What are the key elements in the situation? What constraints affect the decision? What resources are available? SET OBJECTIVES Is the problem stated clearly? Do people understand what they will work on? By what criteria will decision making be judged? SEARCH FOR ALTERNATIVES Do people involved in the problem make the decision? Have they sought complete information? Do those with information make the decision? Do they use diversity to generate ideas? Are all ideas encouraged?
- 16. Six Steps in Making an Effective Decision EVALUATE THE ALTERNATIVES Do participants know that they are evaluating? Are criteria for assessment clear and understood? Are differences of opinion included in evaluation? Are some alternatives pilot tested? MAKE THE DECISION Do employees know that they are making the decision? Are they aware if they are satisficing or optimizing? Do action plans fit with the decision? Are they committed to the decision? EVALUATE THE DECISION Are responsibilities for data collection, analysis, and reporting clear? Is there a comprehensive evaluation plan? Is there an evaluation schedule?
- 17. Evaluating Objectives Do the objectives relate to and support the basic purpose of the organization? Do the objectives recognize obvious constraints? Do the objectives provide a challenge for managers at all levels in the organization? Can managers quantify the objectives? Can managers monitor the objectives at interim points to ensure progress? Do the objectives provide a proper balance on all activities, given organizational goals?