[Lecture 8]

Tashfeen Riaz, PMP

tashfeenriaz@gmail.com
pk.linkedin.com/in/tashfeenriaz

Mid-Term Exam

[Ref: PMBoK 5th Edition (C) Project Management Institute, USA]

[Lecture 9]

Tashfeen Riaz, PMP

tashfeenriaz@gmail.com
pk.linkedin.com/in/tashfeenriaz

Decision is a choice made between two or more available

alternatives

Decision making is the process of choosing the best alternative for

reaching objectives

Sometimes, we cannot know how far the ripples of our decisions

go but we do know, they go too far!

Nature of Decisions
Logical
Emotional

Types of Decisions (Logical)

Programmed Decisions
Non-programmed Decisions
[Ref: PMBoK 5th Edition (C) Project Management Institute, USA]

Programmed Decisions
Involve routine problems that arise regularly and can

be addressed through standard responses

Structured
Mostly Require Less Time

Non-Programmed Decisions
Involve non-routine problems that require solutions

specifically tailored to the situation at hand

Less Structured
Mostly Require More Time
[Ref: PMBoK 5th Edition (C) Project Management Institute, USA]

Identifying
the Problem

Following Up

Determining Alternative
Courses of Action

Implementing
the Decision

Analyzing
the Alternatives

Selecting
the Best Alternatives

[Ref: PMBoK 5th Edition (C) Project Management Institute, USA]

Certain Environments
Exist when information is sufficient to predict the results of each alternative in

advance of implementation.
Certainty is the ideal problem solving and decision making environment

Risk Environments
Exist when decision makers lack complete certainty regarding the outcomes

of various courses of action, but they can assign probabilities of occurrence.

Probabilities can be assigned through objective statistical procedures or
personal intuition.

Uncertain Environments
Exist when managers have so little information that they cannot even assign

probabilities to various alternatives and possible outcomes.

Uncertainty forces decision makers to rely on individual and group creativity
to succeed in problem solving
[Ref: PMBoK 5th Edition (C) Project Management Institute, USA]

Technology

The study of how computers can be programmed to think like human beings.

Will allow computers to displace many decision makers.

Expert systems that support decision making by following either-or rules to make deductions.

Culture

Artificial intelligence.

Culture is the way in which a group of people solves problems.

North American culture stresses decisiveness, speed, and the individual selection of alternatives.
Other cultures place less emphasis on individual choice than on developing implementations that work.
The most important impact of culture on decision making concerns which issues are elevated to the status
of problems solvable with the firm.

Ethics

Ethical dilemma.

A situation in which a person must decide whether or not to do something that, although personally or organizationally
beneficial, may be considered unethical and perhaps illegal.

Ethical dilemmas are often associated with:

Risk and uncertainty.

Non-routine problem situations

[Ref: PMBoK 5th Edition (C) Project Management Institute, USA]

Past Experiences
Cognitive Biases
Escalation of Commitments
Outcomes
Individual Differences

and

Sunk

Age

Socioeconomic Status
Personal Relevance
[Ref: PMBoK 5th Edition (C) Project Management Institute, USA]

Cognitive Biases
Thinking patterns based on observations and generalizations that may

lead to memory errors, inaccurate judgments, and faulty logic

Examples
Belief Bias
Over dependence on prior knowledge in arriving at decisions

Hindsight Bias
To readily explain an event as inevitable, once it has happened

Omission Bias
A propensity to omit information perceived as risky;

Confirmation Bias
To observe what people expect in observations

In decision making, cognitive biases influence people by causing them

to over rely or lend more credence to expected observations and

previous knowledge, while dismissing information or observations
that are perceived as uncertain, without looking at the bigger picture
[Ref: PMBoK 5th Edition (C) Project Management Institute, USA]

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[Ref: PMBoK 5th Edition (C) Project Management Institute, USA]

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