decision making team presentation

8/3/2019 DECISION MAKING Team Presentation

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PRESENTATION ON

DECISION MAKING

Presented To Presented byProf. Anuradha TEAM 5


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Decision making is the process of selecting aparticular course of action among the variousalternatives.

Every decision maker have to work onuncertainities.


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Decision making: The process by which managersrespond to opportunities and threats by analyzingoptions, and making decisions about goals andcourse of action.

Decisions in response to opportunities: Managersrespond to ways to improve organizationalperformance.

Decisions in response to threats: Occurs when

managers are impacted by adverse events to theorganization.


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Effective decision making must be rational

Clear understanding of alternative courses by

which a goal can be reached.They also must have information and ability toanalyze and evaluate the alternatives.


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Programmed Decisions: routine, almost automaticprocess.

managers have made decisions many time before.

There are rules or guidelines to follow.

Example: deciding to reorder office supplies.

Non-programmed decisions: unusual situationsthat have not been often addressed.

No rules to follow since the decision is new.

These decisions are made based on information, anda manager`s intuition, and judgment.

Example: should the firm invest in a newtechnology?


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Classical model of decision making: aprescriptive model that tells how the decisionshould be made.

Assumes managers have access to all theinformation needed to reach a decision.

Managers can then make the optimum decisionby easily ranking their own preferences among

alternatives.Unfortunately, managers often do not haveall(or even most) required information.


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Administrative model of decision making: Challengedthe classical assumptions that managers have andprocess all the information.

As a result, decision making is risky.

Bounded rationally: There is a large number ofalternatives and information is vast so thatmanagers cannot consider it all.

Decisions are limited by people`s cognitive abilities.

Incomplete information: most managers do not seeall alternatives and decide based on incomplete

information.


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Recognize need for a decision

Frame the problem

Generate & assess alternatives

Choose among alternatives

Implement chosen alternatives

Learn from the feedback


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Recognize need for a decision: Managers must first realizethat a decision must be made.

Sparked by an event such as environment changes.

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 needto look for new ideas.

Evaluate alternatives: what are the advantages anddisadvantages of each alternative?

Managers should specify criteria, then evaluate.


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Choose among alternatives: managers rank alternativesand decide.

When ranking, all information needs to be considered.

Implement choose alternative: managers must now

carry out the alternative.Often a decision is made and not implemented.

Learn from feedback: managers should consider whatwent right and wrong with the decision and learn for

the future. Without feedback, managers never learn fromexperience and make the same mistake over.


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Is it legal? Managers must first be sure that analternative is legal both in this country and abroad forexports.

Is it ethical? The alternative must be ethical and nothurt stakeholders unnecessarily.

Is it economically feasible? Can our organizationsperformance goals sustain this alternative?

Is it practical? Does the management have thecapabilities and resources to do it?


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Certainty:

A situation in which a manager can make an accuratedecision because the outcome of every alternative

choice is known.

Risk:

A situation in which the manager is able to estimate thelikelihood (probability) of outcomes that result from the

choice of particular alternatives.


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Uncertainty:

Limited information prevents estimation of outcomeprobabilities for alternatives associated with theproblem and may force managers or rely on intuition,hunches, and gut feelings.

#MaxiMax: The optimistic manager`s choice tomaximize the maximum payoff.

#MaxiMin: The pessimistic manager`s choice tomaximize the minimum payoff.

#MiniMax: The manager`s choice to minimizemaximum regret.


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It focuses on what is important

It is logical and consistent.

It acknowledges both subjective and objective thinkingand blends analytical with intuitive thinking.

It requires only as much information and analysis as isnecessary to resolve a particular dilemma.

It encourages and guides the gathering of relevantinformation and informed opinion.

It is straight-forward, reliable, easy to use, and flexible.


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The group shares ideas and analyses, and agreesupon a decision to implement.

Just from an efficiency standpoint, group decision

making is better.Individual decision maker prefer to implement theideas they themselves think of.

Where as in group, combined skills, and abilities are

performed.


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Devils Advocacy: one member of the group acts as thedevils advocate and critiques the way the groupidentified alternatives.

Points out problems with the alternative selection.

Dialectical inquiry: two different groups are assigned tothe problem and each group evaluates the other

groups alternatives.Top managers then hear each group present theiralternatives and each group can critique the other.

Promote diversity: by increasing the diversity in agroup, a wider set of alternatives may be considered.


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decision making team presentation

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