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Decision Making Process

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on 8 February 2018

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Transcript of Decision Making Process

The Decision Making Process
Begins with an identification of a problem and ends with evaluation of implemented solutions
Step 1
Step 2
Step 3
Step 4
Step 5
Find and define
the problem

Generate and evaluate
alternative solutions

Make decision and
conduct ethics double

Implement decision
Evaluate Results
1. Find and define problem
Stage of gathering information
Information then process and deliberates
Important step to clarify goals by identifying exactly what decisions should be accomplished
The more specific goals ; The more easier to evaluate the results after decision is actually implemented, therefore the problem can also be decided

3 Common Mistakes In Step1
1: Defining the problem too broadly or too narrowly.

2: Focusing on symptoms instead of causes . they shouldn't be mistaken for the problems themselves

3: Choosing the wrong problem to deal with-
you should set priorities and deal with the most important problems first.

Once the problem is defined, it is time to assemble the facts and information that will be helpful for problem solving

Important to clarify exactly what is know and what needs to be known as well as their consequences: Gathering information should identify the course of actions that should be taken
finding alternatives could benefit for the analysis.
another beneficial alternative is Cost- benefit analysis
Typical criteria for evaluation alternatives
------The better the alternatives, the better the outcome of quality

2. Generate and evaluate alternative courses of action
Benefits: What benefits could be used to solve a performance deficiency or take advantage of an opportunity

Costs: What costs could implement the alternative, including resource investments/ negative side efftcs

Timeliness: How fast will the benefits occur and how soon will positive impacts be achieved

Acceptability: To what extent will the alternative be accepted and support by those who must work with it

Ethical soundness: How well does the alternative meet acceptable ethical criteria in the eyes of the various stakeholders

3 Common Errors in Step 2
Abandoning the search for alternatives too soon
If an alternative is convenient, it doesn’t mean it´s always the best alternative
To prevent and minimize errors; participation and involvement will bring more information and perspectives to the problem.

3. Decide on a preferred course of action
Where an actual decision is made to select a preferred course of action
In Management Theory-
there are two differences between classical and behavioural models of decision making
decision making with complete information
Chooses the alternative giving the absolute best solution to a problem
Behavioural scientists question these assumptions...
*Herbert Simon, recognized limits to our human information processing capabilities.
The Cognitive Limitation
make it hard for managers to become fully informed and make perfectly rational decision
The Bounded rationality
are rational decisions only within the boundaries by the available information

The behavioral decision mode
describes decisions that are limited with information
Satisficing decision
chooses the first satisfactory alternative that comes to one's attention

4. Implement the decision
Action must be taken fully to implement
Essential that nothing new can or will happen unless action is taken to solve the problem
If there are more encounter with problems, it could be a lack-of-participation error
Participation in decision making can build commitments needed for implementation
5. Evaluate results
Decision making process is NOT complete until
results are evaluated.
If desired results are not achieved, corrective
action should be taken.
*Evaluation is a form of managerial control
Problem solving becomes a dynamic and outgoing activity within the decision making process
Evaluation: Clears goals, measures targets and timetables
Achieve, efficiency, innovation, motivation
What to keep in mind.
Decision Making Process
Issues in Managerial Decision Making

Decision Making Errors and Traps
Face with limited information, time & energy
-> by simplifying strategies known as

The availability heuristic occurs when people only use information that are "readily available"
The representativeness heuristic occurs when assess the likelihood of a an occurrence based on sets of stereotypes

Framing Error: Solving a problem in the context perceived either positive or negative
this could be used as a tactic, presenting information to inform people to think "inside the frame"

Escalating commitment: Is the continuation of a course of action even though it is not working.
Increases effoets and more resources to pursue an action.
Individual vs. Group decision making
You should switch back and forth among individual and group decisions making to best fit the problems at hand
Advantages of group decision making:
Highly efficient
Team decisions make greater knowledge to solve problems
Increases understanding and acceptance
Increases commitments of members to implement final plans
Disadvantages to group decision making:
Probability of social pressure to conform
Some individuals may feel intimidated or compelled with ideas
Some may feel forced to accept a decision advocated
Time management can be a disadvantage
Ethical Decision Making
*Step 3*
- Making an "ethic double check" to ensure what type of action you'll do to finalize a decision.
You know its an ethical decision when you meet 4 criteria

1. Utility- Does the decision satisfy all stakeholders
2. Rights- Does the decision respect the rights and duties of everyone
3. Justice: Is the decision consistent with justice
4. Is the decision consistent with "my" responsibilities to care?
Knowledge management and organization learning

People and organizations cannot rest because the success of their future is dependent by those who continually learn through experience
Knowledge Management:
Is the process of using intellectual capital for competitive advantage.
Making sure that assets are well managed and continually enhanced: assets such as patents, property rights, and trades.

Learning Organization:
Continuously changes and improves using the lessons of experience.
experiences can come from contractors, suppliers, partners and customers.

Which step is considered
to be the *Checkpoint in
the 5 steps of the decision
making process
When you make decisions, do you come across problems? If so how do you manage to overcome the situation
Full transcript