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Transcript of Decision Making Dr Vasuprada Kartic NAC Batch IX PGDCPM.
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Decision Making
Dr Vasuprada Kartic
NAC Batch IX PGDCPM
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What is decision-making?
The word decision is defined as:
“A choice between two or more alternatives”.
Thus decision-making can be defined as:
“the selection of a course of action from among alternatives ”.
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Decision-making Process Identifying a problem Identifying decision criteria Allocating weights to criteria (prioritizing) Developing alternatives Analyzing alternatives Selecting an alternative Implementing the alternative Evaluation (of decision effectiveness)
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Identifying Decision Criteria
The word criteria, is defined as “a standard by which something can be judged”.
A decision criteria therefore, is the basis of a decision, which outlines the relevant and important factors for a decision. And implicitly, it also defines what is not important.
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Decision Criteria: Example
In the above-cited scenario, the decision criteria may include the following factors: Relevant qualifications Leadership skills Communication skills Planning and analytical skills Professional experience
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Allocating Weights to Criteria
The next step in the decision making process is prioritization.
Prioritization is achieved by assigning quantitative weights to each criteria element.
The weightage defines the relative significance of each element.
An area of higher importance and significance to the desired state is given a higher weight
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Developing Alternatives
Involves defining the possible alternatives (or choices) that would resolve the problem.
In our case, the alternatives would be a list of candidates or job applicants.
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Analyzing Alternatives Alternatives are rated and analyzed
on the basis of the criteria
The rating can be based on a specified scale, say 1 – 5 etc.
Rating may be subjective in nature and thus,may depend on the judgment of the individual(s)
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Selecting an alternative Involves choosing the best alternative,
based on the above rating and analysis
Generally implies selecting the alternative with the highest score.
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Implementing the Alternative
Putting the decision into action
Involves clear communication of the decision to all concerned and obtaining their commitment
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Evaluation Evaluation forms an integral part of any
process Involves a rational and practical study of the
outcome based on the desired goal and criteria
Involves assessing the effectiveness and efficiency of the outcome (or the entire process)
In case of any undesired results, each step of the process is carefully reviewed to trace the root causes
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Decision-making Models
Model
“A simplified representation or description of a system or complex entity”
Examples
A model of a building
A globe (Earth model)
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Rational/Bounded Rational
So Rational and Bounded Rational Models are cognitive models that describe how managers make rational decisions
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Intuition
An unconscious process of making decisions on the basis of experience and judgment
Involves gut feeling
May also have rational basis
The “feeling” arises from past experience and knowledge
Involves quicker response
Does not involve systematic analysis
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Decision Types
In general, there are two kinds of decisions. these are either
Programmed decisions
Non-programmed decisions
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Programmed Decisions A decision that is repetitive and
routine A definite method for its solution can
be established Does not have to be treated a new
each time it occurs Procedures are often already laid
out Examples:
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Non-programmed Decisions
A decision that is novel (new or unique) or Ill structured
No established methods exist, because it has never occurred before or because
It is too complex
It is based on individual’s ability.
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Non-programmed Decisions
Organizational Levels
Nature ofProblems
Nature ofDecision-making
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Decision Styles Decision-making, though a rational
process does include some subjective elements
Thus in real organizational settings, the quality of decision does depend on the ability, style and approach of the manager
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Decision Styles: Directive
Directive
Represents low tolerance for ambiguity and uncertainty
Reflects rational thinking of the manager
Such decision styles are more suitable for routine procedural tasks
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Decision Styles: Analytic
Analytic
Analytical style is also a rational style of thinking
Involves a very high tolerance for ambiguity and uncertainty
Such managers generally seek detailed information before making a decision
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Decision Styles: Behavioural
Behavioural
Represents a creative way of thinking
Involves a low tolerance for ambiguity or uncertainty
Managers with a behavioural style introduce “new” ways of doing things
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Decision Styles: Conceptual
Conceptual Conceptual style also reflects a
creative and intuitive way of thinking Conceptual style managers have a very
broad vision and generally look at numerous alternatives for decision-making
Focused on the long run and often result in creative outcomes or alternatives
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Vroom and Yetton Model
Vroom and Yetton have identified five decision styles for managers, and are classified as follows:
Autocratic
AI
The decision is made individually, using the information available to the individual only
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Vroom and Yetton ModelAII The manager obtains information from
subordinates and himself makes the decision
May or may not share with subordinates, the purpose of questions or the nature of problem
Subordinates do not play any role in problem definition or selection of alternatives
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Vroom and Yetton Model
Consultative
CI The manager shares the problem with
relevant subordinates individually Getting their input individually and
not as a group. The manager then makes the decision independently, and may or may not be influenced by the subordinates’ suggestions
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Vroom and Yetton Model
The problem is shared to subordinates in a group
Their ideas and suggestions are sought in a group meeting
The decision is then made by the manager which
May or may not reflect the subordinates’ influence
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Group decision
The problem is shared to subordinates as a group
Alternatives are generated and evaluated collectively
Effort is made to reach a consensus
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GI (Contd.)
The decision is made collectively and the manager functions as a coordinator
Does not “press” the group in adopting the manager’s “solution”
The manager is willing to accept and implement the decision of the group
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Group Decision-making
The factors requiring group decisions include:
Involving sensitive issues
High cost alternatives
Involving very high risk factor
Strategic impact
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Group Decisions: Advantages
Acceptance of group members Coordination is easier Communication is easier Existence of large alternatives More information can be processed Diversity of experience and
perspectives
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Group Decisions: Disadvantages
Take longer time
Group can be indecisive
Groups can compromise
Groups can be dominated
Groups can “play games”
Victim to Groupthink
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Situational Factors for Individual Decision-making
Short time
Unimportant to group
Dominate the decision
Destructive conflict
Members hesitant
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Situational Factors for Individual Decision-making
Confidential data
Incapability of members
Manager’s dominance
Indirect effect on group members
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Situational Factors for Group Decision-making
Need for innovation and creativity
Data collection
Importance of acceptance
Importance of solution
Complex problem
Democratic process
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Improving Group Decision-making
Brainstorming
Nominal group techniques
Electronic meeting
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Dr Vasuprada Kartic
THANKS YOU!!!