Decision Making.....................pptx

ppt

1. DECISION MAKING

2. Q - What is Decision making ? Decision Making is the process of choosing the best alternative for reaching objectives. “A decision is a judgment. It is a choice between alternatives. It is rarely a choice between right and wrong. It is at best a choice between “almost right” and “probably wrong”.-Drucker .

3. Types of decision making PROGRAMMED DECISIONS NON PROGRAMMED DECISIONS Strategic Decisions Individual decisions Administrative decisions Group decisions

4. PROGRAMMED DECISIONS Programmed decisions are routine and repetitive, and the organization typically develops specific ways to handle them. There are rules or guidelines to follow. Example - Deciding to reorder supplies. McDonald’s employees are trained to make the Big Mac according to specific procedures. Starbucks, and many other organizations, use programmed decisions to purchase new supplies [coffee beans, cups and napkins].

5. NON PROGRAMMED DECISIONS Non programmed decisions are typically one shot decisions that are usually less structured than programmed decision. No rules to follow since the decision is new. Example – Should the firm invest in a new technology ? Decisions about mergers, acquisitions and takeovers, new facilities, new products, labor contracts and legal issues are nonprogrammed decisions.

6. Strategic DECISIONS Strategic decision making is an ongoing process that involves creating strategies to achieve goals and altering strategies based on observed outcomes . For example- The managers of a pizza restaurant might have the objective of increasing sales and decide to implement a strategy of offering lower prices on certain products during off hours to attract more customers .  

7. individual DECISIONS When an individual person takes decisions on his own the process is known as individual decision.

8. Administrative decisions Administrative decision making refers to the process used to make key or strategic decisions by a single individual or a small group.

9. Group decisions Group decision making is a type of participatory process in which multiple individuals acting collectively, analyze problems or situations, consider and evaluate alternative courses of action, and select from among the alternatives a solution or solutions.

10. Techniques of Group Decision Making: .

11. Brainstorming It is a combination of group problem-solving and discussions. It works on the belief that the more the number of ideas, greater the possibility of arriving at a solution to the problem that is acceptable to all. 

12. Electronic meeting The decision-making process takes place virtually with the help of technology. For example, we can have a Skype call with the client. 

13. Delphi method In this method of decision-making, the facilitator allows team members to individually brainstorm and submit their ideas “anonymously”. Other team members do not know the owner of the ideas. The facilitator then collects all the inputs and circulates them among others for modifying or improving them. This process continues until a final decision is made.  

14. Multi-voting It starts with a round of voting where an individual casts his vote for the shortlisted options. Each individual can cast one vote at a time. The options with the maximum number of votes are carried to the next round. This process is repeated until a clear winning option is obtained.

15. Nominal group technique In a nominal group technique, the team divides itself into smaller groups and generates ideas. Possible options are noted down in writing and the team members further discuss these to narrow down the possible choices they would like to accept. Team members then discuss and vote on the best possible choice. The choice that receives the maximum votes is accepted as the group decision.

16. Decision-making Process Identifying a problem Identifying decision criteria Allocating weights to criteria Developing alternatives Analyzing alternatives Selecting an alternative Implementing the alternative Evaluation (of decision effectiveness) 16

17. The Decision-Making Process Allocation of Development of Problem Identification of Weights to Alternatives Identification Decision Criteria Criteria Acer Compaq “My salespeople Price Reliability 10 Gateway Weight Screen size 8 need new computers ” HP Warranty Warranty 5 Micromedia Screen type Weight 5 NEC Reliability Price 4 Sony Screen size Screen type 3 Toshiba Analysis of Selection of an Implementation Alternatives Alternative of an Alternative Acer Acer Compaq Compaq Evaluation Gateway Gateway Gateway of Decision HP HP Effectiveness Micromedia Micromedia NEC NEC Sony Sony Toshiba Toshiba

18. Decision-Making Conditions •Decision Making Under Certainty •Decision Making Under Risk •Decision Making Under Uncertainty

19. Decision Making Under Certainty A state of certainty exists when a decision maker knows, with reasonable certainty, what the alternatives are and what conditions are associated with each alternative. Very few organizational decisions, however, are made under these conditions. Decision Making Under Risk A state of risk exists when a decision maker makes decisions under a condition in which the availability of each alternative and its potential payoffs and costs are all associated with probability estimate. Decisions such as these are based on past experiences, relevant information, the advice of others and one’s own judgment. Decision is ‘calculated’ on the basis of which alternative has the highest probability of working effectively. [union negotiations, Porsche’s SUV focus vs high-performance sports cars]

20. Decision Making Under Uncertainty A state of uncertainty exists when a decision maker does not know all of the alternatives, the risks associated with each, or the consequences each alternative is likely to have. Most of the major decision making in today’s organizations is done under these conditions. To make effective decisions under these conditions, managers must secure as much relevant information as possible and approach the situation from a logical and rational view. Intuition, judgment and experience always play major roles in the decision-making process under these conditions.

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