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College of Education
School of Continuing and Distance Education2014/2015 – 2016/2017
INFS 212
Principles of Management
Session 6 – Decision making
Lecturer: Dr. Emmanuel Adjei Department of Information StudiesContact Information: [email protected]
Session Overview
As individuals we are constantly faced by situations which require usto make decisions many times during the course of the day. We haveto answer questions such as when to get up in the morning, what towear, what to eat, what profession to pursue, when to go on leave,how many children to have, ect. Probably we are not conscious ofthese questions although we answer them and pass day-to-dayschedule. When you raise such questions and answer them you areengaged in decision-making. Everyday a number of major, minor andall sorts of decisions are being made in organisations. We mustrecognise the fact that the effectiveness and the efficiency of thedecision-making process of the individual supervisor has a greatimpact on the organisation.
Slide 2
Session Objectives
Objectives
At the end of this Session, you should be to
• Define and explain decision-making
• Discuss the type of decisions
• Explain the steps in the decision-making process
• Identify some of the errors in decision making
Slide 3
Session Outline
The key topics to be covered in the session are as follows:
• Topic One: Explaining Decision Making
• Topic Two: Types of Decisions
• Topic Three: Rational Decision Making
• Topic Four: Decision Making Conditions
• Topic Five: Errors in Decision Making
• Topic Six: Information and Decision Making
Slide 4
Reading List
1. Robbins, S.P. & DeCenzo D.A. (2008) Fundamentals of
Management: Essential concepts and applications,
(Sixth Edition), Pearson, Prentice Hall: Upper
Saddle River, NJ. (Read Chapter 3, pages 70-77)
2. Chandan JS (2002). Management: Concepts and
Strategies. New Delhi, Vikas Publishing House, PVT Ltd
(Read Chapter 6, pages 125-145).
Slide 5
Explaining Decision Making
Decisions and Decision Making
• Decision = choice made from available alternatives
• Decision Making = process of identifying problems and opportunities and resolving them
Slide 7
Types of Decisions
Programmed decision:A decision that is fairly structured or recurs (occurs again)
with some frequency (or both).
Non-programmed decision:A decision that is relatively unstructured and occurs much
less often than a PROGRAMMED DECISION.
Slide 10
Rational Decision Making
Rational Decision Making (Logical)
Slide 12
C. GOKUL AP / EEE . Principles of management
Rational Decision Making
Rational Decision Making
1. Recognise the need for a decision
Managers recognise the need for a decision in the form of a problem or opportunity.
2.Definition of the problem
A problem is the gap between present and the desired state of affairs on the subject matter of the decision. The problem, once isolated must be defined and formulated.
Slide 13
Rational Decision Making
2. Definition of the problem
• Collect data
• Diagnose and analyse the problem
• Find the root cause of the problem
• Identify resources and constrants
• Develop criteria for successful solution
Slide 14
Rational Decision Making
3.Search and develop alternatives
The alternative course of action can be developed by
collecting more information, thinking creatively, consulting
experts and undertaking research.
4.Evaluate Alternatives
After identifying alternative courses of action, they
must be compared and evaluated. This step determines
the relative cost of each alternative.
Slide 15
Rational Decision Making
5.Implement chosen alternative
• The decision taken by the management will not serve the purpose if it is not executed properly.
6.Learn from feedback
• Feedback is important because decision making is a continuous and never ending process
• Feedback information is very much useful in taking the corrective measures and in taking right decisions in the future
Slide 16
Decision Making Conditions
Decision-Making Conditions
Slide 18
Certainty Risk Uncertainty
Level of ambiguity and chances of making a bad decision
Lower Moderate Higher
The decisionmaker faces
conditions of:
C. GOKUL AP / EEE . Principles of management
Decision Making Conditions
1.Certainty:
A condition in which the decision maker knows with reasonable certainty what the alternatives are and what conditions are associated with each alternative.
2. Risk:
A condition in which the availability of each alternative and its potential payoffs and costs are all associated with probability estimates.
Slide 19
Decision Making Conditions
3. Uncertainty
A condition in which the decision maker does not know all the alternatives, the risks associated with each, or the likely consequences of each alternative.
Slide 20
Errors in Decision Making
• Some researchers have pointed out some areas where some common mistakes are made that affect the decision making process as well as the efficiency of decisions. Some of these limitations and drawbacks are:– Indecisiveness
– Postponing the decision until the last minute
– Failure to identify the root cause of the problem
– Failure to assess the reliability of information sources
– Inappropriate method of analyzing the information collected
– Fear of implementing the decision and follow-up
Slide 21
Slide 23
Information and Decision-making
• Internal and external information of a wide variety, relevant to situation
• Investigation of internal resources and potential external sources
• Information on likely outcomes of a number of different solutions
• To identify and analyse a problem or opportunity
• To appraise available resources
• To compare alternative solutions and select optimum solution
Decision-Making
Purpose Source
Summary
• Decision making is at the core of everything managers
do. Consequently their success depends on their
decision-making skills.
• The decisions that managers make vary greatly.
Programmed decisions are repetitive and based
solely on objective data, whereas non-programmed
decisions involve new situations where there are no
“hard” data.
Slide 24
Summary
• Decision making is s systematic process with six steps: Formulating
goals, evaluating the decision situation, analyzing alternatives,
selecting one alternative from those available, implementing the
decision, evaluating the results and following up.
• The responsibility for making decisions usually rests with one
person, nevertheless most managers consult other people before
making a decision.
• Poor decisions primarily result from unforeseen changes. In some
instances, though, ineffective decisions result from unreliable
information, failure to analyze alternatives fully, total reliance on
intuition, and fear of disastrous results.
Slide 25
Sample Question for Consideration
1. Discuss briefly the steps in the process of rational
decision making process.
2. What are some of the common errors committed in
decision making and how these errors can be
avoided.
3. Identify and explain the three conditions under which
decisions are made.
Slide 26
References
1. Robbins, S.P. & DeCenzo D.A. (2008) Fundamentals of
Management: Essential concepts and applications,
(Sixth Edition), Pearson, Prentice Hall: Upper Saddle
River, NJ. (Read Chapter 4, pages 98-117)
2. Chandan JS (2002). Management: Concepts and
Strategies. New Delhi, Vikas Publishing House, PVT Ltd
(Read Chapter 8, pages 171-197).
Slide 27