Chapter 6
Decision Making
What is a decision?
A decision is making a choice between several alternatives
Decision making is synonymous with management!
The decision making process
Review figure 6.1
1. Identifying the Problem- Problems are discrepancies between desired
states and existing states of affairs
How do mangers become aware of the discrepancy?
2. Identifying Decision criteria
Determine what information is necessary to help in the
DM process.
3. Allocating weights to the criteria
4. Developing alternatives
5. Analyzing alternatives
6. Selecting an alternative
7. Implementing the alternative
8. Evaluating the decision alternative (Anxiety)
The manager as a decision maker
1. Assumptions of reality
-Problem clarity
-Goal orientation
-Known options
-Clear preferences
2. Bounded Rational
Satisficing- Decision that is good enough
3. Intuition
Types of problems and decisions
1. Well structured and programmed decision
The following help in the programmed decision making process:
A. Procedures- A series of steps to follow to
complete
a task
B. Rule - Do and Do Not statements
C. Policy- Guidelines
2. Ill structured problems and Non - programmed decision