CHAPTER TWO

Decision making
and creative
problem solving
D. Hanaa Adel
Decision making
 Basic definitions
 Decision: The choice made from two or more alternatives.
 Problem: A discrepancy between some current state of affairs

and some desired state.

 Decision making:

- Is the process of identifying and choosing alternatives courses

of action to meet the demands of a situation.
- A process that occurs as a reaction to a problem or an
opportunity and describes how decision maker should behave in
order to maximize some outcomes from solving the problems.
 Opportunity: An occasion that gives rise to thoughts about

new ways of proceeding.

Decision making challenge
 The pace (or steps) of decision making is
accelerating: managers report making more
decision and having less time to make them.
 Complexity of decision.
 Perceptual and behavioral decision traps.
 Risk and uncertainty in decision making process.
 Other threats: too many choice-over thinking-poor
tools for deciding.
 Source of complexity for decision
 Multiple criteria to be satisfied by a decision.
 Intangibles that often determine decision alternatives.
 Risk & uncertainty about decision alternatives.
 Long-term implication of the effects of the choice of a particular
alternative.
 Different inputs from various parties increase the number of persons
to be consulted before a decision is made.
 Pooled decision making increases the number of persons playing a
part in the decision process.
 Value judgment by different participants in the process create
disagreement over whether a decision is right or wrong, good,
bad….etc.
 Unintended consequence occur because the results of purposeful
actions cannot always be predicted.
Perceptual and behavioral decision trap

Perceptual and
behavioral
decision trap

Escalating of
Overconfidence Framing errors
communication

The way in which Continuing on a

Believing too much information is course of action that
in one’s capability presented locks a person into
influences losing position
Risk and uncertainty
Uncertainty and risk
Definitions:
 Risks: Is best understood as describing a known

probability of an event.

 Uncertainty: refers to the absence of sufficient

information to predict probability of occurrence.
Uncertainty and risk conditions in
decision making process
 Risk: exist when a decision is made on the basis of
incomplete but reliable information.
 Uncertainty: exist when there are no reliable data to
be used as abase for decision.
 Types of environmental uncertainty

1- State : occurs when the environment or part of it is

considered unpredictable.
2- Effect: occur when the impacts or effect a specific
environment changes or events are unpredictable.
3- Response: is inability to predict the consequence
of a particular decision or organizational response.
Threats for decision making process

 Unknown outcomes.
 Lack of poor support.
 Over thinking.
 Focus on other things.
 Poor tools for deciding.
 Concern about risk.
 Too many choices.
Making decision
Types of decisions
Programmed decisions: repetitive and routine
decisions for repeated situations or problems.
Non-programmed decisions:
Decisions made in complex and non-routine
situations.
– Problem hasn’t arisen before.
– It is difficult to define problem’s nature and structure.
– Problem is important and requires a unique solution.
General decision making model
Rational (Logical) Decision Model Steps:
- Scanning the situation and identifying a signals
from superiors, managers and subordinates.
- Classify the decision as routine, apply the
appropriate decision rule; as non-programmed, begin
comprehensive problem solving.
- Monitor and follow-up as necessary.
Factors affecting the decision making process

 Decision quality: the higher the quality of the

decision needed, the more you should involve other
people in the decision.
 Subordinate commitment: how important is it
that your team and others buy into the decision?
 Time constraints: how much time do you have to
make decision?
Personal value and decision making

 Values: refer to the personal principles, standards,

beliefs and preferences that influence your
behavior.
 Values shaping influences: people, events, family,
religious group, schools, the media.
Values importance
1- They serve as an internal guidance system, telling
us about how we see the “rightness” and “wrongness”
of things.
2-Helps us becomes more self-aware.
3- Helps us to ethical decision.
4-Helps us to prioritize our tasks
5-Helps us to develop credibility as a leader.
6-Value provide criteria for making choices based on
our ideas of right and wrong.
Relation between personal values and decision
making

There is an interaction between personal values and

decision making because these values determine the
goals and outcomes in life for a person and the
decision making designed or organized to achieve his
value.
 Value categories
1- Terminal value: The reflect a person’s preferences regarding
the “ends” to be achieved.
For example: prosperity, achievement, world peace, freedom,
equality, wisdom etc.
They are the goals individuals would like to achieve during their
life time.
2- Instrumental value: They represent the “means” foe achieving
desired ends.
For example: ambition & hard work, open mindness,
competence, cheerfulness, courage, honesty, responsibility etc.
They indicate how you might go about achieving your important
end-states depending on the relative importance your attached to
the instrumental values.
Creative problem solving
 Creativity: is defined as the recognition of
Experience into a new configurations and is a
function of knowledge, imagination, and
evaluation.
 Problem solving: is defined as the conscious
process of closing the gap between the actual
desired situation.
Managerial problem solving
steps
1- define the problem
2- Gather information
3-Develop alternatives
4- weight alternatives
5- Select the best alternatives
6-Implement the solution
7-Monitor the progress
Thanks