decision making management chapter 6
DESCRIPTION
Deals with the chapter of decision makingTRANSCRIPT
Management
Chapter – 6 Decision MakingChapter – 6 Decision Making
Introduction
Aim To Acquaint The
Students With Steps Involved In Decision Making Process & Factors Influencing Decision Making
Group Members Fawad Hussain Rao Qaiser Rizwan Shaukat Naveed ur Rehman
Sequence Introduction Part – 1 Fundamentals of Decision Making : Fawad Hussain Part – 2 Managerial Decision Making: Rao
Qaiser Part – 3 Rational Decision Making : Rao
Qaiser Part – 3 Effective Decision Making : Naveed ur
Rehman Part – 4 Groups and Decision Making : Rizwan
Shaukat Conclusion Questions
Part – 1
What is Decision Making
It is the process of recognizing a problem, generating an weighing alternatives, coming to a decision, taking action , and assessing the results
Types of Problems
Crisis Problems Non Crisis Problems Opportunity Problems
Types of Decisions & Conditions of
Decision Making Types of Decisions
Programmed Decisions Nonprogrammed Decisions
Conditions of Decision Making Certainty Risk Uncertainty Ambiguity
Level & Scope of Organizational Decision Making
Part – 2
Three Managerial Decision Making Model
Part – 3
Steps In Rational Decision Making Process
(1) Identify The Problem
(2) Generate Alternatives
(3) Evaluate Alternatives
(4) Make The Decision
(5) Implement The Decision
(6) Evaluate The Results and Provide Feed Back
Part – 4
MORE EFFECTIVE DECISION MAKING
Barriers to effective decision making.
Behavioral tools for effective decision making.
Quantitative tools for effective decision making.
BARRIER TO EFFECTIVE DECISION MAKING
Barriers are the imperfect or incomplete information, inaccurate identification of problems or alternatives, biases and over commitment or under commitment
IMPERFECT OR INCOMPLETE INFORMATION.Imperfect or incomplete information is to withholding information or misinforming others.
INACCURATE IDENTIFICATION OF PROBLEM OR ALTERNATIVES.It means When we ask wrong question we can't get the right answer.
BIASES.
In decision making bias refers to situations in which decision- making short cuts are inappropriately applied.
OVER COMMITMENT OR UNDER COMMITMENT.
It means exhibiting no rational escalation of commitment.
BEHAVIORAL TOOLS FOR EFFECTIVE
DECISION MAKING
Behavioral tools are the ways in which a person behaves in a situation.these tools are:- Decision timing. Realistic decision constraints. Critical thinking. Experience and expertise. Intuition .
Decision Timing.It is the time when the decision is to be made by comparing the benefits and the risks.
Realistic Decision Constraints.By understanding constraints one can more realistically select an appropriate and acceptable solution.
Critical Thinking Skills.To improve decision making is to develop critical thinking which help us think clearly, logically and analytically about the problems we face.
BEHAVIORAL TOOLS
Experience and ExpertiseWith decision making experience comes the ability to make decisions faster managers also need to develop their expertise in decision making so that they can recognize the key elements in each problem
IntuitionIt is the ability to understand something immediately without the need for conscious reasoning. We should be intuitive in decision making.
BEHAVIORAL TOOLS
QUANTITATIVE TOOLS FOR EFFECTIVE DECISION MAKING
Quantitative tools are especially valuable when planning production, analyzing inventory levels and considering major budget expenditure.
These tools are :- Payoff matrix Decision tree Simulation model
PAYOF MATRIXA tool that compare probable outcome of two or more alternatives.
DECISION TREEAn analytical tool that graphically portrays the logical series of actions and decisions in a problem situation.
SIMULATION MODEL A mathematical representation of problems that reflect the relationship between the elements and it is used to project that result of certain actions under various circumstances.
QUANTITATIVE TOOLS
Part – 5
GROUPS AND DECISION MAKING
Decision making is often an individual activity but there are many times when groups become involved in the process.
Employee Participation in Decision Making Manager have a great deal of latitude when deciding to handle decision making alone or
to involve others in the process.
Group Decision – Making Formats
Interacting Group.
Nominal Groups.
Delphi Groups.
Impact of group Decision Making Group decision making has both benefits and limitation as compared with individual
decision making.
Benefits of Groups Decision When attacking a problem, group members are able to contribute more knowledge and
information than individuals.
Advantages and Disadvantages of Group Decision Making
Advantages
Groups can accumulate more knowledge and facts.
Groups may have a broader perspective and consider more approaches and alternatives.
Individuals who participate in group decision making are more likely to be satisfied with the decision and to support its implementation.
The group decision making process serves as an important communication devices.
Disadvantages
Groups tend to work more slowly and take more time to reach any decision.
To much dependence on group decision making may limit a manager’s ability to act quickly and decisively when necessary.
Groups may be dominated by one individual or a small sub group.
Group effort frequently result in compromises that may not be optimal for organizational effectiveness or performance.
Tools for Effective Group Decision Making
Brain Storming
An informal interactive group technique in which members generate many alternatives with out passing judgment on their value.
Devil’s Advocate
A technique in which one or more group members deliberately challenge the group’s view to the problem, the alternatives, and their evaluation.
Dialectic process
A technique in which individuals or groups present and defend opposing solution to a particular problem to drive an improved solution.