Decision making

Decision Making

Decision Making

The process of identifying and selecting a course of action to solve a specific problem.

Time and Human Relationship in Decision MakingTime and human relationships are crucial elements

in the process of decisions.Decision making connects the organization’s

present circumstances to actions that will take the organization into the future.

Decision making also draws on the past; past experiences- positive and negative- play a big part in determining which choices managers see as feasible or desirable.

Decision making, is a process that mangers conduct in relationship with other decision making.

Problem Situation that occurs when an actual state of

affairs differs from desired state of affairs.

The Problem-Finding Process1. A deviation from past experience means

that a previous pattern of performance in an organization has been broken.

2. A deviation from a set plan means the manager`s projections or expectations are not being met.

3. Other people often bring problems to the manager.

4. The performance of competitors can also create problem-solving situations.

Identifying a Problem at coca-cola

Opportunity

Situation that occurs when circumstance offer an organization the chance to exceed stated goals and objectives.

Dialectical Inquiry MethodA method of analysis in which a decision

maker determines and negates his or her assumption, and then creates “countersolutions” based on the negative assumptions; also called the devil’s advocate method.

Peter DruckerMr. Drucker thought of himself, first and foremost, as a writer and teacher, though he eventually settled on the term "social ecologist." He became internationally renowned for urging corporate leaders to agree with subordinates on objectives and goals and then get out of the way of decisions about how to achieve them.

He challenged both business and labor leaders to search for ways to give workers more control over their work environment. He also argued that governments should turn many functions over to private enterprise and urged organizing in teams to exploit the rise of a technology-astute class of "knowledge workers."

Deciding to Decide The idea that managers are problem solvers

may conjure up the image of managers sitting behind desks, calmly deciding what to do about every problem that arises.

In fact, managers differ widely with regard to what they consider to be a problem and how they elect to deal with it.

Thresholder for Problem RecognitionSetting priorities Is the problem easy to deal with?Might the problem resolve itself?Is this my decision to make?

Information GatheringThe gathering of relevant and up-to-date information

is a key business process. Information consists of organized facts and figures that have meaning within the context that the information is intended to be interpreted by people. Information is thus a valuable business commodity, and frequently businesses pay money for up-to-date and relevant information.Businesses buy:

Market research informationInformation about the financial performance of other

companiesInformation about economic trends, and the

economies of other countriesProduct research and development information.

William Guth and Renato Tagiuri Noted though the information gathered is filtered through managers ‘ values and backgrounds. Their values and backgrounds also influences the types of problems and opportunities they choose to work on.

The Nature of Managerial Decision MakingDifferent problems require different types of

decision making.

Programmed DecisionSolution to routine problems determined by

rule, procedure, or habit.

Nonprogrammed decisionsSpecific solutions created through an

unstructured process to deal with nonroutine problems.

CertaintyDecision making condition in which

managers have accurate, measurable, and reliable information about the outcome of various alternatives under consideration.

RiskDecision-making condition in which

managers know the probability a given alternative will lead to a desired goal or outcome.

ProbabilityA statistical measure of the chance a certain

event or outcome will occur.

Uncertainty Decision-making condition in which

managers face unpredictable external conditions or lack the information needed to establish the probability of certain events.