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CHAPTER 3 : THE NATURE OF DECISION MAKING - Coggle Diagram
CHAPTER 3 : THE NATURE OF DECISION MAKING
Definition
The process through which managers identify and resolve problems and capitalize on opportunities
The process by which a course of action is selected as the way to deal with a specific problem
Types of decision making
Program
A repetitive decision that can be handled by a routine approach
Example: Rules & regulations
It is structured
Non- program
Non-routine decision making that occurs in response to unusual, unpredictable opportunities and treat
Example: Government’s decision to prevent H1N1 by stopped all the travelling outside country
Deals with unique, unusual or exceptional problem. It is unstructured and requires higher level management
Types of condition under decision making
Uncertainty
A condition under which there is not full knowledge of the problem and reasonable probabilities for alternative outcomes cannot be determined
Risk
Refer to future conditions that are not always known in advance
Decision maker is able to estimate the likelihood of certain outcome based on personal experience or secondary information
Some information is available, but it is not enough to answer all questions about the outcomes
Certainty
Decision maker know exactly what will happen and able to predict the outcome precisely
Ambiguity
Means the goals to be achieved or problem to be solved is unclear, alternatives are difficult to define and information about outcomes is not available
The rationale of decision making
Develop alternatives
Seek creative alternatives
Do not evaluate yet
Evaluate alternative and select the best one
Evaluate alternative: Time required, costs involved, risk involved, benefits or advantages & limitation
Select the best alternative
Investigate the situation
Identify decision objectives
Diagnose causes
Define problem
Implement and monitor
Plan implementation- review the plan periodically
Monitor implementation & make necessary adjustment
Group decision making techniques
Nominal Group Technique ( NGT )
A structured process designed to stimulate creative group decision-making in which agreement is lacking or the members have incomplete knowledge concerning the nature of the problem
Delphi Technique
An approach that uses the experts to make predictions and forecasts about future events without meeting face-to-face
Brainstorming
A technique used to enhance creativity that encourages group members to generate as many novel ideas as possible on a given topic without evaluating them