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Decision Making
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Meaning.
Decision making is the process of choosing thebest from among the alternative solutions under
a given set of circumstances.
Decision making involves 3 aspects of human
behaviour.Cognition Activities of mind associated with knowingConation (willingness, Desire)
Affection (motion , temperament)
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06/14/16 3
Decisions and Decision Making
Decision -choice made
from available
alternatives
Decision Making the process of
Identifying problems
And opportunities and
Then resolving them.
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Goal
Directed
Alternatives
Rational vs
Judgmental
Freedom to
chose
CHARACTERISTICS OFCHARACTERISTICS OF
DECISIONS MAKINGSDECISIONS MAKINGS
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FACTORS AFFECTING DECISION
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TYPES OF DECISION
Programmed and non-programmedPro
grammed and non-programmed
Programmed:-Programmed Decisions are
ro!ine and repe!i!i"e and are made #i!$ !$e%rame#or& o% organi'a!iona( po(icies and r(e)
Non- Programmed:-Non- programmed
decisions are re(e"an! %or so("ing ni*e andnsa( pro+(ems in #$ic$ "arios a(!erna!i"escanno! +e decided in ad"ance) E"a(a!ion o%A(!erna!i"es are no! possi+(e %((,)
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Programmed "s) Non-programmed Decisions
C$arac!eris!ics Programmeddecisions
Non-programmeddecisions
T,pe o% pro+(em Structured nstructured
Manageria( (e"e( !o"er #e$e# %%er #e$e#
Fre*enc, Re%etiti$e Ne"&unusua#
In%orma!ion Readi#' a$ai#a(#e A)(iguous orinco)%#ete
Time %rame %orso(!ion
S*ort Re#ati$e#' #ong
So(!ion re(ies on Procedures&ru#es&and %o#icies
+udg)ent andcreati$it'
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TYPES OF DECISION
S!ra!egic "s Opera!iona(S!ra!egic "s Opera!iona(
S!ra!egic:-S!ra!egic decisions are re(a!ed !o nied.in!egra!ed and compre$ensi"e isses o% !$eorgani'a!ion) E)g di"ersica!ion. in!rodc!ion !o !$ene# prodc!)
Opera!iona(:-Ro!ine ac!i"i!ies re(a!ed decision areopera!iona( decisions) E)g) sanc!ion o% incremen!.pa,ing o% +i(()
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TYPES OF DECISION
Ma/or and MinorMa/or and Minor
Ma/or:- Decisions a0ec!ing o"era((organi'a!ion is !$e ma/or decision)
Minor:-Decisions a0ec!ing on(, specic%nc!iona( area is &no#n as minor decision )
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TYPES OF DECISION
Simp(e and Comp(e1Simp(e and Comp(e1
Simp(e:-Decisions in"o("ing (ess no o%"aria+(es !o +e considered)
Comp(e1:-2arge nm+er o% "aria+(es areconsidered +e%ore !a&ing !$e decision)
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TYPES OF DECISION
2ong 3rn "s S$or!- rn2ong 3rn "s S$or!- rn
2ong-rn:-Decisions !a&en %or !$e (ong rnp(ans) E)g Se(ec!ion o% candida!es %or !$epermanen! pos!)
S$or!-rn:-Temporar, emp(o,ees se(ec!ionis s$or! rn)
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TYPES OF DECISION
Indi"ida( and GropIndi"ida( and Grop
Indi"ida(:-Decisions !a&en +, indi"ida(se(ec!or
Grop:-Decision !a&en +, pane(
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C*aracteristics o, an E-ecti$eDecisionMaking
It ,ocuses on "*at is i)%ortant It is #ogica# and consistent.
It ackno"#edges (ot* su(/ecti$e and o(/ecti$et*inking and (#ends ana#'tica# "it* intuiti$e
t*inking. It re0uires on#' as )uc* in,or)ation and ana#'sis
as is necessar' to reso#$e a %articu#ar di#e))a.
It encourages and guides t*e gat*ering o,re#e$ant in,or)ation and in,or)ed o%inion.
It is straig*t,or"ard&re#ia(#e& eas' to use& and1e2i(#e.
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3-14
MAKINGMAKING
Identifying and
diagnosing
the prolemGenerating
alternative
solutions!valuating
alternatives
!valuating
the decision
Implementingthe decision
"a#ing the
choice
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Approac$es !o
Decision ma&ing
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T*e Intuiti$e
T*e Rationa#
A Satis3cing
Po#itica# 4e*a$ioura#
Incre)enta# Mode#
Gar(age Mode#
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Approac$esApproac$es
In!i!ion T*e a(i#it' o, )anagers to (e %er,ect#'
rationa# in )aking decisions is #i)ited (',acts suc* as5
6 Inade0uate in,or)ation
6Ti)e and cost constraints
6 cogniti$e ca%acit'Managers seek a#ternati$es on#' unti# t*e'3nd one "*ic* #ooks satis,actor'& rat*ert*an seeking an o%ti)a# decision.
1$
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intuition
Experience-based
Decisions
Affect-InitiatedDecisions
Cognitive-Based
DecisionsSubconscious
mental processing
Values or ethics-based Decisions
Their past experiences
eelings or emotions
S!ills"!no#ledge" and
trainingData from
subconscious mind
Ethical values
and culture
%hat is Intuition &
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Decision)aker takes decision (ased onintuitions "*ic* is c*aracteri7ed (' t*e use o,
*unc*es& inner ,ee#ings or t*e gut,ee#ing o, t*edecision)aker.
T*e decision )aker "orking on t*is a%%roac*%ractices )anage)ent in t*e ,or) o, art.
8e %re,ers *a(it or e2%erience re#ati$e t*inkingand instinct& using t*e unconscious cogniti$e%rocess.
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Rationa# Decision Making
A%%roac* Decision )aker is rationa# and
inte##igent.
Fu##' a"are o, a## a$ai#a(#e ,easi(#ea#ternati$es to )a2i)i7e ad$antages.
Consider a## %ossi(#e c*oices
Decide t*e )ost o%ti)a# a#ternati$et*at can (e ado%ted.
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''
Rational
Decision
Making
Rational
Decision
Making
An optimal decision
is possible
An optimal decision
is possible
All relevant information
is available
All relevant information
is available
All relevant information is
understandable
All relevant information is
understandable
All alternatives are knownAll alternatives are known
All possible outcomes knownAll possible outcomes known
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Process
Recogni7e t*e need ,or a decision
Esta(#is*& Rank and "eig* criteria&
Gat*er a$ai#a(#e in,or)ation and data
E$a#uate eac* a#ternati$e
Se#ect t*e (est a#ternati$e.
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'4
Satisficing
decisionmaking
Satisficing
decisionmaking
Time constraintsTime constraints
Limited ability to
understand all factors
Limited ability to
understand all factors
nade!uate base
of information
nade!uate base
of information
Limited memory of
decision"makers
Limited memory of
decision"makers
#oor perception of factors
to be considered
in decision process
#oor perception of factors
to be considered
in decision process
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CONSTRAINTS ON DECISIONCONSTRAINTS ON DECISION
MAKERSMAKERS
Ethical$uman
Economical
(onstraints
Technical%rgani&ational
Political
Environmental
Social
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GropDecision
Ma&ing
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C*a%ter 9& Nanc' !angtonand Ste%*en P. Ro((ins&
Grou% Decision Making
7ea&nesses o%Grop DecisionMa&ing
More ti)e consu)ing.
Con,or)it' %ressures ingrou%s.
Discussion can (edo)inated (' one or a,e" )e)(ers.
Decisions su-er ,ro)a)(iguous res%onsi(i#it'.
S!reng!$s o% GropDecision Ma&ing
Generates )ore
co)%#ete in,or)ationand kno"#edge.
O-ers increaseddi$ersit' o, $ie"s.
Generates *ig*er0ua#it'decisions.
!eads to increasedacce%tance o, a so#ution.
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Indi$idua# $s. Grou% Decision
Making In establishing objectives, groups are probably
superior to indi$idua#s (ecause o, t*e greatera)ount o, kno"#edge a$ai#a(#e to grou%s.
In identifying alternatives, the individual eortsof group )e)(ers encourage a (road searc* in$arious ,unctiona# areas o, t*e organi7ation.
In evaluating alternatives, the collectivejudgement of the grou%& "it* its "ider range o,$ie"%oints& see)s su%erior to t*at o, t*e indi$idua#decision )aker.
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In choosing an alternative, groupinteraction and the
ac*ie$e)ent o, consensus usua##' resu#t in t*eacce%tance o, )ore risk t*an "ou#d (e acce%ted(' an indi$idua#
decision )aker.
Implementing a decision, whether or not itwas made by a grou%& is usua##' acco)%#is*ed(' indi$idua# )anagers.
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C*a%ter 9& Nanc' !angtonand Ste%*en P. Ro((ins&
E2*i(it 9> Grou% $s. Indi$idua#
Decision Making
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C*a%ter 9& Nanc' !angtonand Ste%*en P. Ro((ins&
Grou%t*ink and Grou%s*i,t
Grou%t*ink
6 P*eno)enon in "*ic* t*e nor) ,or consensus
o$errides t*e rea#istic a%%raisa# o, a#ternati$ecourses o, action.
Grou%s*i,t
6P*eno)enon in "*ic* t*e initia# %ositions o,indi$idua# )e)(ers o, a grou% aree2aggerated to"ard a )ore e2tre)e %osition.
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C*a%ter 9& Nanc' !angtonand Ste%*en P. Ro((ins&
S')%to)s o, Grou%t*ink
I##usion o, in$u#nera(i#it'
Assu)%tion o, )ora#it'
Rationa#i7ation Stereot'%ing outgrou%s
Mini)i7ed dou(ts
I##usion o, unani)it'
Mind guards
Peer %ressure
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C*a%ter 9& Nanc' !angtonand Ste%*en P. Ro((ins&
Mini)i7ing Grou%t*ink
Encourage grou% #eaders to %#a' ani)%artia# ro#e.
A%%oint one grou% )e)(er to %#a' t*ero#e o, de$i#?s ad$ocate.
Sti)u#ate acti$e discussion o, di$erse
a#ternati$es.
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C*a%ter 9& Nanc' !angtonand Ste%*en P. Ro((ins&
@*at Causes Grou%s*i,t
Discussion creates ,a)i#iari7ation a)onggrou% )e)(ers.
Grou% discussion )oti$ates indi$idua#sto take risks.
Grou% di-uses res%onsi(i#it'.
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Degree O, Partici%ation
E2%eriences
E2%ertise
Nature o, Task
Di-erence o, o%inion
O%enness o, Grou% #eader
Org Cu#ture
E)%#o'ee E)%o"er)ent and ,reedo)
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Met*ods o, Grou% Decision
)akingT*e )a/orit' "ins sc*e)e
T*e trut* "ins sc*e)e
T"o t*ird Ma/orit' sc*e)e
First s*i,t ru#e
Status Buo Ru#e.
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MANAGING GRO
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Tec$ni*es in GropDecision Ma&ing
For de!ai( &ind(, re%era!!ac$ed PDF
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:;s!ica!ion o%Pre"iosDecisions
Posi!i"e ?a(e o%E1pec!edO!comes
ProspectiveRationality
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Grou% Consensus Decision
Making Mode# Consensus is a st'#e o, decision )aking "*ere('
%artici%ants are a(#e to arri$e at a decision t*roug*
discussion in "*ic*
6 A## Partici%ants $ie"%oints are considered
6T*e 3na# decision is agreea(#e to a## in$o#$ed
6 No ,or)a# $ote is taken t*e a%%ro$a# is unani)ous.
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Points to re)e)(er in
Consensus decision )aking Eac* %artici%ant )ust *onest#' state *is *er o%inion in
co)%#ete )anner.
T*e ,ocus on eac* o%inion is to )ake sure it is c#ear#'
understood (' ot*er %artici%ants. Partici%ants )ust #isten care,u##'
Its not a "in #ose situation& ,air discussion )ust (e t*eir.
Partici%ants s*ou#d not su%%ort an agree)ent t*at t*e'
*a$e o(/ection to.
T*e grou% s*ou#d not %ressure indi$idua#s o%inion.
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Process
Ste%s5
. S%eci3cation o, o%inions (' a## %artici%ants
;. C#ari,'ing state)ents t*roug* o%en discussion andcross 0uestioning.
>. Discussion o, ideas continues unti# so)eone t*inksconsensus *as (een ac*ie$ed.
H. A tria# decision is stated to c*eck )e)(ers o%inion.. I, it does not ste% ; re%eated
K. I, a## agree consensus is ac*ie$ed.
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Consensus is $a#ua(#e (ecause it
increases creati$it' and in$o#$es a##
)e)(ers o, t*e grou%.
Takes )ore ti)e u% ,ront (ut eLcient
on#' in #ong run.
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Ro#e o, Faci#itator in Decision
Making
) ilit ti i Eff ti
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)acilitation unnin' Effective
.eetin'%
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T'%ica# Meetings
Descri(e 'our grou%?s t'%ica# )eeting in> sentences or #ess
6 @*at?s t*e (iggest c*a##enge6 @*at ,rustrates 'ou t*e )ost
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@*at is Faci#itation
Process ,or running )eetings or )akingdecisions in a "a' t*at is5
6 S)oot*6 E-ecti$e
6 Partici%ator'
6 De)ocratic
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T$e Faci(i!a!or is (i&e
an orc$es!ra (eader)S$e or $e
ms! &eep
FACI2ITATORS ARE
PROCESS MANAGERS
GOO C O S
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K
GOOD FACI2ITATORS ARENE
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@*' use ,aci#itation
To in$o#$e %eo%#e
To )ake )eetings )ore e-ecti$e
To increase t*e nu)(er o, )inds "orkingon a %ro(#e)
To sta' on task
To kee% %eo%#e co)ing (ack to )eetings
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@*at?s t*e risk o, not using
,aci#itation 4rainstor)
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Ste%s to Faci#itation Success
. C*oose a ,aci#itator
;. Set or re$ie" Ground Ru#es Grou%
Nor)s>. C*oose ot*er ro#es as necessar'
H. Start )eeting agendaDiscussion
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Ro#es5 Faci#itator
Ro#e de%ends on conte2t
6 Faci#itator is NOT in contro#
6 Faci#itator?s aut*orit' granted (' grou%6 ee% grou% on task
6 Res%onsi(#e ,or Process NOT Content
6 Make sure e$er'one is *eard
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Ro#es5 Ti)eee%er
Makes sure t*ere is a ti)e#i)it ,oreac* agenda ite)
!et?s t*e grou% kno" "*en ti)e is
a#)ost u% ee%s t*e grou% on task& a$oid
tangents
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Ro#es5 NoteTaker
Record o, )eeting decisions
T'%es and sends
)inutes to%artici%ants
Ca%ture To Do?s Due Dates
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Ro#es5 Ji(es@atc*er
ee%s and e'e on t*e energ' o, t*e grou%
@atc*es ,or tension& can ca## a (reak or ta(#e an ite)
Deesca#ates situations
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E2a)%#e Ground Ru#es
Decision)aking %rocess i.e.)a/orit'& consensus& etc.
Stack or )odi3ed stack
8and Signa#s
4ikerack
Goaround
Don?t interru%t s%eaker Sta' on su(/ect
4e concise& don?t re%eat ot*ers
4e res%ect,u# and %o#ite
Directed Buestions
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4ring t*e MAPS ,or an E-ecti$eMeeting
Materia#s
Agenda
Peo%#e
S%ace
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Ti%s ,or E-ecti$e Meetings
Start and end 'our )eetings on ti)e
ee% announce)ents to a )ini)u)
Sit in a circ#e 8a$e an agenda and set ti)e #i)its ,or
eac* ite)
Encourage %artici%ation
Don?t #et an'one do)inate
se *and signa#s
8a$e ,ood
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Ti%s ,or E-ecti$e Meeting cont.
Re$ie" decisions at t*e end o, t*e )eeting
E$er'one #ea$es "it* a task ,or ne2t )eeting
Rotate ,aci#itators Re$ie" groundru#es at t*e (eginning
8a$e a signin s*eet
Introduce ne" %eo%#e P#an t*e agenda ,or ne2t )eeting (e,ore 'ou
#ea$e
8AJE FNQQ Socia#i7e "it* %eo%#e a,ter"ards
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< Ti%s ,or Faci#itating Discussion
. Para%*rase
;. C*eck
>. Co)%#i)ent
H. E#a(orate
. Energi7e
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< Ti%s ,or Faci#itating Discussion cont.
K. Disagree
=. Mediate
. Pu##
9. C*ange
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A#so re,er %g no 9 to 9H in 'ourcourse %ack
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