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Concept
Decision- Making is a process to arrive at a decision, the process by which an individual or organization selects one position or action from several alternatives.
Decision-Making , connects the organizations present circumstances to actions that will take the organization into future.
Characteristics of DecisionMaking
Integral Part of Planning Goal Oriented. Search Alternatives. choice Analytical-Intellectual. Pervasive Function and a continuous activity. Human and Social Process.
Types of Decisions
Programmed Decisions
Are one which are of Routine and
repetitive in nature. Deal with Situations that occur often enough to enable decision rules to be developed and applied in the future Made in response to recurring organizational problems. e.g. A hospital establishes a procedure for admitting new patients.and A supervisor administers disciplinary actions against workers reporting late at work.
Non-Programmed Decisions
Deal with Unique and Unusual problems. The decision maker has to make a decision , in a poorly structured situation. Situations are Novel and nonrecurring. e.g Deciding to take over a sick unit , how to restructure the organization to improve efficiency. Where to locate a new warehouse.
Type Of Problem
Level In Organization
Well structured
Lower
Decision-Making Process
McDonalds
Identification of a problem
Evaluating Alternatives
Drop the alternative
No
No
LOW
Bounded Rationality
Bounded rationality: The concept that manager make the most logical decisions they can within the constraints or limited information and ability.
Satisficing: Means that decision makers choose the first solution alternative that satisfies minimal decision criteria.
Decision-Making Styles
High
Tolerance For Ambiguity
Analytic
Conceptual
Directive
Behavioral
Low Rational
Directive
People who prefer simple, clear-cut solutions to problems Make decisions quickly May consider only one or two alternatives Efficient and rational Prefer rules or procedures
Analytic
Complex solutions based on as much data as they can gather Carefully consider alternatives Base decision on objective, rational data from management control systems and other sources Search for best possible decision based on information available
Conceptual
Consider a broad amount of information More socially oriented than analytical style Like to talk to others about the problem and possible solutions Consider many broad alternatives Relay on information from people and systems Solve problems creatively
Behavioral
Have a deep concern for others as individuals Like to talk to people one-on-one Understand their feelings about the problem and the effect of a given decision upon them Concerned with the personal development of others May make decisions to help others achieve their goals
Immediate Gratification
Self-serving
Anchoring Effect
Sunk Costs
Selective Perception
Randomness
Availability