Anirudh Bapna14PGDM004Section A

Introduction to

Decision Making

WHAT IS DECISION MAKING??

Problem Definition

Recognizing Alternative Solutions

Pros & Cons

Analysis

Criteria Selection

Preferred course of

Action

Decision Implementati

on

Result Monitoring & Revision.

Decision MakingProcess

Step 1 - Identifying a Problemproblem - discrepancy between an existing and a desired state of affairs

must be such that it exerts pressure to actmanager is unlikely to characterize a situation as a problem unless s/he

has resources necessary to act

◦ Step 2 - Identifying Decision Criteria decision criteria - what’s relevant in making a decision

◦ Step 3 - Allocating Weights to the Criteria must weight the criteria to give them appropriate priority in the decision

◦ Step 4 - Developing Alternatives list the viable alternatives that could resolve the problem without

evaluating them

Decision Making

◦ Step 5 - Analyzing Alternatives each alternative is evaluated against the criteria

◦ Step 6 - Selecting an Alternative choosing the best alternative from among those considered

◦ Step 7 - Implementing the Alternative implementation - conveying the decision to those affected by it and getting

their commitment to it participation in decision-making process inclines people to support the decision decision may fail if it is not implemented properly

◦ Step 8 - Evaluating Decision Effectiveness determine whether the problem is resolved

Decision Making

ProblemIdentification

“My salespeopleneed new computers”

Identification of

Decision CriteriaPrice

WeightWarrantyScreen typeReliabilityScreen size

Allocation ofWeights to

Criteria

Reliability 10Screen size 8Warranty 5Weight 5Price 4Screen type 3

Development of AlternativesAcerCompaqGatewayHPMicromediaNECSonyToshibaImplementation

of an Alternative

GatewayEvaluationof Decision

Effectiveness

Analysis ofAlternatives

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Selection of anAlternative

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Example

Decision Timing.It is the time when the decision is to be made by comparing the benefits and the risks.

Realistic Decision Constraints.By understanding constraints one can more realistically select an appropriate and acceptable solution.

Critical Thinking Skills.To improve decision making is to develop critical thinking which help us think clearly, logically and analytically about the problems we face.

Experience and ExpertiseExperience brings the ability to make decisions faster managers also need to develop their expertise in decision making so that they can recognize the key elements in each problem

IntuitionIt is the ability to understand something immediately without the need for conscious reasoning. We should be intuitive in decision making.

Decision Making Tools

IMPERFECT OR INCOMPLETE INFORMATION.Imperfect or incomplete information is to withholding information or misinforming others.

INACCURATE IDENTIFICATION OF PROBLEM OR ALTERNATIVES.It means When we ask wrong question we can't get the right answer.

OVER COMMITMENT OR UNDER COMMITMENT.

It means exhibiting no rational escalation of commitment.

Barriers to Decision Making

Decision Making

Train Track & Children

A group of children were playing near two railway tracks, one still in useother in disused. Only one child played on disused track, the rest on the operational track

The train came, and you were just beside the track interchange. It was not possible to stop the train, but you could make the train change it course to the disused track and saved most of the children

However, that would also mean the lone child playing with the disused would be sacrificed . Or would you rather let train go its way ?

Lets take a pause to think what kind of decision we could make……..

Most of the people might choose to divert the course of the train, and sacrifice only one child. To save most of the children at the cost of only one child was rational decision most of the people would make, morally and emotionally.

But have you ever thought the child choosing to play on the disused track, had in fact made the right decision to play at a safe place..?

Nevertheless , he had to be sacrificed because of his ignorant friend who choose to play where the danger was..

The child who choose to play with rest of the operational track was sidelined . And in the case he was sacrificed, no one would shed a tear for him.

To make a proper decision is not to change the course of the train because the children playing on the operational track should have known very well that track was still in use and that they should have run away if they heard the train’s sirens

If the train was diverted, the lone child would definitely die because the train could come over to that track !Moreover the track was not in use probably because it was not safe

If the train was diverted to the track, we could put the lives of all the passengers on board to stake.And in your attempt to save few children by sacrificing one child, you might end up sacrificing hundred of people to save these few children

While we all are aware that life is full of tough decision that need to be made, we may not realize that hasty decision may always not be the right one.

“ Remember that what’s right isn’t always popular …and what’s popular isn’t always right.”

CONCLUSION