Intelligence computer software is helping
managers and other decision makers to be more
effective and efficient. Several diverse industries such as energy,
health care, transportation, and
telecommunications are relying on applied intelligence software to help
make decisions by
computers that were previously left to humans. Can any thing ever
replace the decision-making
process utilized by humans? In this session ,
we’ll look at the decision
making process and see that
there is nothing that will ever replace the manager’s need to make
decisions. Making good
decisions is something that every manager strives to do because the
overall quality of managerial
decisions has a major influence on organizational success or failure.
Decision making is part of all four managerial
functions. In performing these functions, managers are often
called decision makers.
THE DECISION-MAKING PROCESS:
a choice made from two or more alternatives. The decision-making process is defined as a
set of different steps that begins with identifying a problem and
decision criteria and allocating weights to
those criteria; moves to developing, analyzing, and selecting an
alternative that can resolve the problem;
implements the alternative; and concludes with evaluating the decision’s
Models of decision making can be either descriptive or normative.
decision-making models attempt to
prescribe how managers actually do make decisions.
decision-making models attempt to
prescribe how managers should process.
a. Following the prescription should lead to a more effective
b. The models usually incorporate four steps.
Steps in an effective decision-making process
A. The first step is to identify
problem, i.e., discrepancies between a
current state or condition and what is desired.
1. The scanning state involves monitoring the work situation for
circumstances that may signal the emergence of a problem.
2. The categorization stage entails attempting to understand and verify
there is some type of discrepancy between a current state and what is
3. The diagnosis stage involves gathering additional information and
the nature and the causes of the problem.
B. The generation of alternative solutions
step is facilitated by using the four
associated with brainstorming.
1. Don’t criticize ideas while generating possible solutions
2. Freewheel, i.e., offer even seemingly wild and outrageous ideas in an
trigger more usable ideas from others.
3. Offer as many ideas as possible to increase the probability of coming
up with an
4. Combine and improve on ideas that have been offered.
C. The choice of an alternative
step comes only after the alternatives are
systematically according to six general criteria:
1. Feasibility is the extent to which an alternative can be accomplished
organizational constraints, such as time, budgets, technology, and
2. Quality is the extend to which an alternative effectively solves the
3. Acceptability is the degree to which the decision makers and others
who will be
affected by the implementation of the alternative are willing to support
4. Costs are the resource levels
required and the extent to which the alternative is
likely to have undesirable side effects.br>
5. Reversibility is the extent to which the alternative can be reversed,
if at all.
6. The ethics criterion refers to the extent to which an alternative is
the social responsibilities of the organization and with ethical
D. Finally, the
implementing and monitoring the chosen
solution step must be planned to
avoid failure of the entire effort.
1. Implementation requires careful planning.
a. The amount of planning depends upon whether the projected changes are
minor or major.
b. Irreversible changes require a great deal of planning.
2. Implementation requires sensitivity to those involved in or affected
a. Affected individuals are more likely to support a decision when they
able to participate in its implementation.
b. If Participation is not feasible, individuals should be kept informed
3. Monitoring is necessary to ensure that things are progressing as
planned and that
the problem that triggered the planning process has been resolved.
Decision Making Situation:
Decision-making situations differ according to
the types of problems that must be handled.
Certainty is a situation in which a
manager can make accurate decisions because the outcome of every
alternative is known. However, this isn’t characteristic of most
Uncertainty is a condition in which the
decision maker chooses a course of action without complete
knowledge of the consequences that will follow implementation.
Risk is the possibility that a chosen
action could lead to losses rather than the intended results.
a. Uncertainty is seen as the reason
why situation is risky.
b. A rapidly changing environment is a
major cause of uncertainty.