SDDS software Lecture 4 top eror highkll

busines model ai , ml opps , dev op s

1. Making Decision Managers as Decision Makers

2. DECISION Decision: A choice among two or more alternatives. For instance, top-level managers make decisions about their organization’s goals, where to locate manufacturing facilities, or what new markets to move into. Middle and lower-level managers make decisions about production schedules, product quality problems, pay raises, and employee discipline. Making decisions isn’t something that just managers do; all organizational members make decisions that affect their jobs and the organization they work for. But our focus in this chapter is on how managers make decisions

3. The Decision-Making Process

4. Decision-Making Process Step 1: Identifying a Problem Problem: An obstacle that makes it difficult to achieve a desired goal or purpose. Characteristics of Problem: In the real world, most problems don’t come with neon signs flashing “problem.” Managers also have to be cautious not to confuse problems with symptoms of the problem. Problem identification is subjective. A manager who resolves the wrong problem perfectly is likely to perform just as poorly as the manager who doesn’t even recognize a problem and does nothing.

5. Decision-Making Process Step 2: Identifying Decision Criteria Once a manager has identified a problem, he or she must identify the decision criteria that are important or relevant to resolving the problem. Every decision maker has criteria guiding his or her decisions even if they’re not explicitly stated. Cost that will be incurred (Investments required). Risks likely to be encountered (Chance of failure). Outcomes that are desired (Growth of the firm).

6. Decision-Making Process Step 3: Allocating Weights to the Criteria: If the relevant criteria aren’t equally important, the decision maker must weight the items in order to give them the correct priority in the decision. Assigning the weight to each item. Places the item in the correct priority order of their importance.

7. Decision-Making Process

8. Decision-Making Process Alternatives are listed (without evaluation) that can resolve the problem.

9. Decision-Making Process Step 5: Analyzing Alternatives. Appraising each alternative’s strengths and weaknesses. An alternative’s appraisal is based on its ability to resolve the issues identified in step 2 and step 3. Keep in mind that these data represent an assessment of the eight alternatives using the decision criteria, but not the weighting. The total score for each alternative, then, is the sum of its weighted criteria. Sometimes a decision maker might be able to skip this step. If one alternative scores highest on every criterion, you wouldn’t need to consider the weights because that alternative would already be the top choice. Or if the weights were all equal, you could evaluate an alternative merely by summing up the assessed values for each one.

10. Decision-Making Process Step 6: Selecting an Alternative Choosing the best alternative. The sixth step in the decision-making process is choosing the best alternative or the one that generated the highest total in Step 5.

11. Decision-Making Process Step 7: Implementing the Alternative Putting the chosen alternative into action. The decision into action by conveying it to those affected and getting their commitment to it.

12. Decision-Making Process Step 8: Evaluating Decision Effectiveness The last step in the decision-making process involves evaluating the outcome or result of the decision to see whether the problem was resolved. If the evaluation shows that the problem still exists, then the manager needs to assess what went wrong. The answers might lead you to redo an earlier step or might even require starting the whole process over.

13. Managers Making Decision

14. Managers Making Decision Rationality Decision Making: Describes choices that are logical and consistent and maximize value. A rational decision maker would be fully objective and logical. The problem faced would be unambiguous, and the decision maker would have a clear and specific goal and know all possible alternatives and consequences. Finally, making decisions rationally would consistently lead to selecting the alternative that maximizes the likelihood of achieving that goal.

15. Managers Making Decision Bounded Rationality: Decision making that’s rational, but limited (bounded) by an individual’s ability to process information. Managers satisfice, rather than maximize. That is, they accept solutions that are “good enough.” They’re being rational within the limits (bounds) of their ability to process information.

16. Managers Making Decision The Role of Intuition: It’s making decisions on the basis of experience, feelings, and accumulated judgment. Researchers studying managers’ use of intuitive decision making have identified five different aspects of intuition. Intuitive decision making can complement both rational and bounded rational decision making

17. What is intuition?

18. Managers Making Decision “That’s the premise behind evidence-based management ( EBMgt ), which is the “systematic use of the best available evidence to improve management practice.” Evidence means information, facts, data supporting, a claim, assumption or hypothesis. “Any decision-making process is likely to be enhanced through the use of relevant and reliable evidence, whether it’s buying someone a birthday present or wondering which new washing machine to buy.”