2. Presentation Layout
• Definition
• The nature of managerial decision making
• Types of problems decision makers face
• Differences in decision making situations
• Models of decision making
• Steps in an effective decision making process
• Overcoming barriers to effective decision
making
• Managing diversity: group decision making
• Summary and Conclusions
3. Definition
• The act of making up your mind about
something, or a position or opinion or
judgment reached after consideration.
• The process of selecting from several
choices, products or ideas, and taking
action.
4. Four Functions of Management
• An effective decision
making includes following
four steps
5. 1-8
Four Functions of Management
Planning
Choose Goals
Organizing
Controlling
Working together
Monitor & measure
Leading
Coordinate
6. Types of problems decision makers face
• Managerial decision making typically
centers on three types of problems:
Crisis
A crisis problem is a serious difficulty requiring immediate action.
Non-Crisis
A non-crisis problem is an issue that requires resolution but does not
simultaneously have the importance and immediacy characteristics of a
crisis.
Opportunity Problems.
An opportunity problem is a situation that offers strong potential for
significant organizational gain if appropriate actions are taken.
7. Differences in decision making situations
• There are two situation
Programmed Decision Making
Programmed Decisions are those made in routine, repetitive, well-
structured situations through the use of predetermined decision rules.
Non-Programmed Decision Making
Non-programmed Decisions are those for which predetermined decision
rules are impractical because the situations are novel and/or relatively ill
structured.
8. 1-14
Three Levels of Management
Top
Managers
Middle
Managers
First-line Managers
Non-management
9. Three Levels of Management
Comparison of Decision making situation and management levels
10. Three Stages of the Planning Process
Determining the Organization’s
mission and goals
(Define the business)
Strategy formulation
(Analyze current situation &
develop strategies)
Strategy Implementation
(Allocate resources & responsibilities
to achieve strategies)
11. Models of decision making
• Rational Model
Most popular type of model
Based around a cognitive judgment
Pros and cons of various options
• Non-Rational Models
Satisficing Model
Incremental Model
Garbage-Can Model
12. Models of decision making cont….
• Satisficing Model
Managers seek alternatives
One that looks satisfactory
Not seeking the optimal decision.
• Incremental Model
Managers make the smallest response possible
This reduce the problem to at least a tolerable
level.
13. Models of decision making cont….
• Garbage-Can Model
Managers behave in virtually a random pattern
14. Steps in an effective decision making process
• Four steps for effective decision making
15. Overcoming barriers to effective decision making
• Means of overcoming D.M. barriers
Accepting the problem challenge
Searching for sufficient Alternatives
Recognizing common Decision Making Biases
Avoiding the Decision Escalation Phenomenon
16. Managing diversity
• Group Decision Making
Decision Making by more than one person
Usually followed in organizations
It has some advantages and some disadvantages
17. Outlines
• Definition
• The nature of managerial decision making
• Types of problems decision makers face
• Differences in decision making situations
• Models of decision making
• Steps in an effective decision making process
• Overcoming barriers to effective decision
making
• Managing diversity: group decision making
18. Summary and Conclusions
• Decision making is the process through which
managers identify organizational problems and
attempt to resolve them.
• There are three types of Problems Managers face
• Situation differ in Decision Making Process
• Managers follow different types of models during
decision making
• Managing diversity
