1. Decision Making Process
Unit II

2. Decision making.
– The process of choosing a course of action for
dealing with a problem or opportunity.
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3. How are decisions made
in organizations?
 Steps in systematic decision making.
– Recognize and define the problem or opportunity.
– Identify and analyze alternative courses of action, and
estimate their effects on the problem or opportunity.
– Choose a preferred course of action.
– Implement the preferred course of action.
– Evaluate the results and follow up as necessary.
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4. Decision-Making Conditions
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5. Types of Decisions.
1. Programmed Vs Nonprogrammed decisions
– Programmed decisions.
• Involve routine problems that arise regularly and can be addressed through
standard responses.
– Nonprogrammed decisions.
• Involve nonroutine problems that require solutions specifically tailored to
the situation at hand
2. Major Vs Minor decisions
3. Individual Vs Group decisions
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6. Conditions that Affect the Possibility of
Decision Failure
Organizational
Problem
Low Possibility of Failure High
Certainty Risk Uncertainty Ambiguity
Programmed Nonprogrammed
Decisions Decisions
Problem
Solution
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7. 1. Rational Perspectives on
Decision Making
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8. Six Steps in the Managerial
Decision Making Process
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9. Decision Making Steps
Step 1. Recognize Need for a Decision
– Sparked by an event such as environment changes.
• Managers must first realize that a decision must be made.
Step 2. Generate Alternatives
– Managers must develop feasible alternative courses of
action.
• If good alternatives are missed, the resulting decision is poor.
• It is hard to develop creative alternatives, so managers need to
look for new ideas.
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10. Decision Making Steps
Step 3. Evaluate Alternatives
– What are the advantages and disadvantages
of each alternative?
– Managers should specify criteria, then
evaluate.
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11. Decision Making Steps
Step 3. Evaluate alternatives
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12. Decision Making Steps
Step 4. Choose Among Alternatives
– Rank the various alternatives and make a decision
– Managers must be sure all the information
available is brought to bear on the problem or
issue at hand
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13. Decision Making Steps
Step 5. Implement Chosen Alternative
– Managers must now carry out the alternative.
– Often a decision is made and not implemented.
Step 6. Learn From Feedback
– Managers should consider what went right and wrong
with the decision and learn for the future.
– Without feedback, managers do not learn from
experience and will repeat the same mistake over.
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14. The Administrative Model of
Decision Making
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15. The Scope of Decision Making
1. Individual decision making
2. Group decision making
3. Organizational decision making
4. Metaorganizational decision
making
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16. Advantages and Disadvantages of
Group and Team Decision Making
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17. Methods of Group Decision Making
• Nominal Group Technique
– Members silently and individually generate ideas
– They present without discussion
– Discussion and clarification
– Silently rate
– Group decision is the pooled outcome of votes
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