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A choice made from available alternatives is called a...
Decision
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The process of identifying problems and opportunities and then resolving them. It is not easy. It must be done amid ever changing factors, unclear information and conflicting points of view.
DECISION MAKING
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A timely decision that meets a desired objective and is acceptable by those individuals affected by it.
EFFECTIVE DECISION
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Effective Decision derivation:
ED = Timely x acceptable
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A decision made in response to a situation that has occurred often enough to enable decision rules to be developed and applied in the future. They are made in response to recurring organizational problems.
PROGRAMMED DECISION
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A decision made in response to a situation that is unique, is poorly defined and largely unstructured and has important consequences for the organization.
NONPROGRAMMED DECISION
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3 TYPES OF DECISIONS under Programmed/Nonprogrammed
- Certainty
- Goal: Known
- Info: Known
- Outcome: Known
- Bounded Rationality
- Goal: Known
- Info: Unknown
- Outcome: Unknown
- Garbage Can
- Goal: Unknown
- Info: Unknown
- Outcome: Unknown
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PROBLEMS IN DECISION MAKING (2)
- 1) RISK AVERSION
- 2) Escalation of Commitment
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The tendency to continue to support a failing course of action.
Escalation of Commitment
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The tendency to choose options that entail fewer risks and less uncertainty.
RISK AVERSION
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Non-programmed Decision Situations (3)
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1st solution thought of "good enough"
Satisfice
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Saves mental activity because it is "pasted practice" or "rule of thumb"
Heuristics
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Three decision methods used in Bounded rationality:
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How to deal with Escalation of Commitment?
Split responsibility for decisions.
Provide individuals with a graceful exit
Have groups make the initial decision.
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Broader perspective for problem definition and analysis.
Discussion clarifies ambiguous problems and reduces uncertainty about alternatives.
Participation fosters employee job satisfaction and support for decision.
ADVANTAGES OF PARTICIPATIVE DECISION MAKING
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Disadvantages of Group Decision Making
÷Pressure in groups to conform
÷Amount of time
÷Participants engage in discussions that make them lose their focus.
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6 STEPS TO PROBLEM SOLVING
- 1: DEFINE THE PROBLEM/OPPORTUNITY
- 2: RESEARCH & ANALYZE
- 3: DEVELOP SOLUTIONS
- 4: SELCTION OF DESIRED SOLUTION
- 5: IMPLEMENTATION OF CHOSEN SOLUTION
- 6: Monitor, Feedback and Evaluation
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Occurs when managers see potential accomplishment that exceeds current goals. (when defining the problem) is called
OPPORTUNITY
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Occurs when organizational accomplishment is less than established goals.(when defining the problem) is called
PROBLEM
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Date verses Information
Data: are raw, non-summarized, unanalyzed facts. Requires the proper organization to produce meaningful information.
Information: is data that are meaningful and alter the receiver’s understanding.
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_____ are raw, non-summarized, unanalyzed facts. Requires the proper organization to produce meaningful information.
Data
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_________ is data that are meaningful and alter the receiver’s understanding.
information
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