Infosheet4 decisionmaking

Decision Making and Levels of DecisionsMargaret F. BelloInstructor

Decision Making

Programmed Decision◦Routine, virtually automatic decision

making that follows established rules or guidelines. Managers have made the same decision

many times before Little ambiguity involved

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Decision Making

Non-Programmed Decisions◦Nonroutine decision made in response to

unusual or novel opportunities and threats.

◦The are no rules to follow since the decision is new. Decisions are made based on information, and

a manager’s intuition, and judgment.

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Decision Making

Intuition ◦feelings, beliefs, and hunches that come

readily to mind, require little effort and information gathering and result in on-the-spot decisions

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Decision MakingReasoned judgment

◦decisions that take time and effort to make and result from careful information gathering, generation of alternatives, and evaluation of alternatives

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LIS580- Spring 2006 6

Step 1. Define the Problem1. Start by writing down your initial

assessment of the problem.2. Dissect the problem.

◦ What triggered this problem (as I’ve assessed it)?

◦ Why am I even thinking about solving this problem?

◦ What is the connection between the trigger and the problem?

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G.Dessler, 2003


Step 2. Clarify Your Objectives

1. Write down all the concerns you hope to address through your decision.

2. Convert your concerns into specific, concrete objectives.

3. Separate ends from means to establish your fundamental objectives.

4. Clarify what you mean by each objective.

5. Test your objectives to see if they capture your interests.

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G.Dessler, 2003


Step 3. Identify Alternatives1. Generate as many alternatives

as you can yourself.2. Expand your search, by checking

with other people, including experts.

3. Look at each of your objectives and ask, “how?”

4. Know when to stop.

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G.Dessler, 2003


Step 4. Analyze the Consequences

1. Mentally put yourself into the future.◦ Process Analysis

Solving problems by thinking through the process involved from beginning to end, imagining, at each step, what actually would happen.

2. Eliminate any clearly inferior alternatives.

3. Organize your remaining alternatives into a table (matrix) that provides a concise, bird's-eye view of the consequences of pursuing each alternative.

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G.Dessler, 2003


Consequence Matrix

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G.Dessler, 2003


Step 5. Make a ChoiceAnalyses are useless unless the

right choice is made.◦Under perfect conditions, simply

review the consequences of each alternative, and choose the alternative that maximizes benefits.

◦In practice, making a decision—even a relatively simple one like choosing a computer—usually can’t be done so accurately or rationally.

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G.Dessler, 2003


How To Make Better Decisions1. Increase Your Knowledge

◦ Ask questions.◦ Get experience.◦ Use consultants.◦ Do your research.◦ Force yourself to recognize the facts when

you see them (maintain your objectivity).

2. Use Your Intuition◦ A cognitive process whereby a person

instinctively makes a decision based on his or her accumulated knowledge and experience.

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Are You More Rational or More Intuitive?

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FIGURE 3–2Source: Adapted and reproduced by permission of the Publisher, Psychological Assessment Resources. Inc., Odessa FL 33556, from the Personal Style Inventory by William Taggart, Ph.D., and Barbara Hausladen. Copyright 1991, 1993 by PAR, Inc.

G.Dessler, 2003


How To Make Better Decisions (cont’d)3. Weigh the Pros and Cons

◦ Quantify realities by sizing up your options, and taking into consideration the relative importance of each of your objectives.

4. Don’t Overstress the Finality of Your Decision◦ Remember that few decisions are

forever.◦ Knowing when to quit is sometimes the

smartest thing a manager can do.

5. Make Sure the Timing Is RightApril 4, 2006

G.Dessler, 2003


Decision Matrix

Use weights to provide adjustments for importance of criteria

Often subjective, but helps to prioritize

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FIGURE 3–3G.Dessler, 2003


Creativity and Decision Making

Creativity◦ The process of developing

original, novel responses to a problem.

Brainstorming◦ A creativity-stimulating

technique in which prior judgments and criticisms are specifically forbidden from being expressed in order to encourage the free flow of ideas which are encouraged.

Nominal group technique◦ A decision-making

technique in which group members are physically present but operate independently

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G.Dessler, 2003

Creativity

Task motivation

Creativity skillsExpertise


Nominal Group TechniqueEach participant contributes

individual ideasIdeas are then ranked

individuallyTotals are summed for final rank

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http://www.ryerson.ca/~mjoppe/ResearchProcess/841TheNominalGroupTechnique.htm

http://www.ryerson.ca/~mjoppe/ResearchProcess/841TheNominalGroupTechnique.htm


Checklist 3.4How to be More Creative

Create a culture of creativity. Encourage brainstorming. Suspend judgment. Get more points of view. Provide physical support for

creativity. Encourage anonymous input.

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G.Dessler, 2003


Decision-making Shortcuts and TrapsUsing a Heuristic

◦ Applying a rule of thumb or an approximation as a shortcut to decision making.

Anchoring◦ Unconsciously giving disproportionate

weight to the first information available.Adopting a Psychological Set

◦ The tendency to rely on a rigid strategy or approach when solving a problem.

Perception (Personal Bias)◦ The unique way each person defines stimuli,

depending on the influence of past experiences and the person’s present needs and personality.

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G.Dessler, 2003

Organizational Learning and Creativity

Creativity◦The ability of the decision maker to

discover novel ideas leading to a feasible course of action. A creative management

staff and employees are the key to the learning organization.

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Senge’s Principles for Creating a Learning?

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Figure 7.8


Self-Check: Using Creativity to Find a Solution* Create a decision matrix to find alternative solutions to the problem: Choosing a course for college

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Source: Applied Human Relations, 4th ed., by Benton/Halloran cW 1991. Reprinted by permission of Prentice-Hall, Upper Saddle River, NJ.

FIGURE 3–6G.Dessler, 2003

Education

Infosheet4 decisionmaking