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Decision making

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Text of Decision making

  • DECISION MAKING
    • A Presentation by
    • Deepti Sharma Parul Dahiya
    • Prashant Arora Ravish Nagpal
    • Vishal Chawla
  • DECISION MAKING
    • What is Decision Making?
    • The Phases in decision making process.
    Our Route Map
    • Decision making in organizations
    • Decision making techniques.
    • Factors Influencing decision making
    • Some Models of Decision making.
    • How do intuition, judgment, and creativity affect decision
    • making?
    • Types of Decisions
    • Managing Decision Making Process-undestanding the reasons for failure
  • DECISION MAKING
    • Define the Phases in decision making process.
    Objectives of the session
    • Discuss the Creative process .
    • Understanding decision making techniques.
    • Identify some Models of Decision making .
  • Defining Decision Making Chester Barnard gave a comprehensive analytical treatment of decision making. A process of narrowing choice. Decision making is universally defined as choosing between alternatives. A Classical Thought : Fayol & Urwick (Stressed Delegation) Taylor alluded scientific methods only as ideal approach. DECISION MAKING
  • Phases Herbert A. Simons Mintzberg Intelligent Activity Design Activity Choice Activity Selection Phase Development Phase Identification Phase DECISION MAKING
  • Models
    • Rational Model
    • Social Model
    • Bounded Rationality Model
    • Judgement Heuristics and Biases Model.
    DECISION MAKING
  • Rational Model
    • ABC
    • EVA
    • MVA
    • CD
    DECISION MAKING Assumptions of Complete Rationality New Rational Techniques.
  • Social Model Opposite extreme of rational. Model of psychology. Human bundle of feeling, emotions, instincts DECISION MAKING Reasons for escalation of commitment. Project Characteristics Psychological Determinants . Social Forces. Organizational Determinants.
  • Bounded Rationality Model
    • Choosing between the alternatives.
    DECISION MAKING
    • More Realistic Model.
    Example: A Fair Price Why Bounded ? Constraint Like Time & Cost
  • How do intuition, judgment, and creativity affect decision making?
    • Intuition.
      • The ability to know or recognize quickly and readily the possibilities of a given situation.
      • A key element of decision making under risk and uncertainty.
    DECISION MAKING
  • Intuitive Decision Making
    • An unconscious process of making decisions on the basis of experience and accumulated judgment.
      • Making decisions on the basis of gut feeling doesn't happen independently of rational analysis. The two complement each other.
      • Although intuitive decision making will not replace the rational decision-making process, it does play an important role in managerial decision making.
    Decision Making
  • How do judgment affect decision making?
    • Judgmental heuristics.
      • Simplifying strategies or rules of thumb used to make decisions.
      • Makes it easier to to deal with uncertainty and limited information.
      • Can lead to systematic errors that affect the quality and/or ethics of decisions.
    Decision Making
    • Creativity factors.
      • Creativity in decision making involves the development of unique and novel responses to problems and opportunities.
      • Creativity is especially important in a dynamic environment full of nonroutine problems.
    Decision Making
  • Creativity Preparation Concentration Incubation Illumination verification Decision Making
    • Decision environments include:
      • Certain environments.
      • Risk environments.
      • Uncertain environments.
    How are decisions made in organizations? Decision Making
  • How are decisions made in organizations?
    • Certain environments.
      • Exist when information is sufficient to predict the results of each alternative in advance of implementation.
      • Certainty is the ideal problem solving and decision making environment.
    Decision Making
  • How are decisions made in organizations?
    • Risk environments.
      • Exist when decision makers lack complete certainty regarding the outcomes of various courses of action, but they can assign probabilities of occurrence.
      • Probabilities can be assigned through objective statistical procedures or personal intuition.
    Decision Making
  • How are decisions made in organizations?
    • Uncertain environments.
      • Exist when managers have so little information that they cannot even assign probabilities to various alternatives and possible outcomes.
      • Uncertainty forces decision makers to rely on individual and group creativity to succeed in problem solving.
    Decision Making
  • Factors Influencing decision making
    • Technology
    • Culture
    • Ethics
    Decision Making
  • How do technology, culture, and ethics influence decision making?
    • Information technology and decision making.
      • Artificial intelligence.
        • The study of how computers can be programmed to think like human beings.
        • Will allow computers to displace many decision makers.
      • Expert systems that support decision making by following either-or rules to make deductions.
  • How do technology, culture, and ethics influence decision making?
    • Cultural factors and decision making.
      • Culture is the way in which a group of people solves problems.
      • North American culture stresses decisiveness, speed, and the individual selection of alternatives.
      • Other cultures place less emphasis on individual choice than on developing implementations that work.
      • The most important impact of culture on decision making concerns which issues are elevated to the status of problems solvable with the firm.
  • How do technology, culture, and ethics influence decision making?
    • Ethical issues and decision making.
      • Ethical dilemma.
        • A situation in which a person must decide whether or not to do something that, although personally or organizationally beneficial, may be considered unethical and perhaps illegal.
      • Ethical dilemmas are often associated with:
        • Risk and uncertainty.
        • Nonroutine problem situations.
  • How do technology, culture, and ethics influence decision making?
    • Suggestions for integrating ethical decision making into the firm.
      • Develop a code of ethics and follow it.
      • Establish procedures for reporting violations.
      • Involve employees in identifying ethical issues.
      • Monitor ethical performance.
      • Reward ethical behavior.
      • Publicize ethical efforts.
  • Types of Decisions
    • Programmed
    • Non - Programmed
      • Programmed decisions.
        • Involve routine problems that arise regularly and can be addressed through standard responses.
      • Non programmed decisions.
        • Involve nonroutine problems that require solutions specifically t

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