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Managing and Decision-Making - Coggle Diagram
Managing and Decision-Making
Decision Making Process
Identifying a Problem
A discrepancy between an existing and desired state of affairs
Identifying Decision Criteria
Criteria that define what is relevant in the decision
Allocating Weights to the Criteria
The decision maker must weight the items in order to give them the correct priority in the decision
Developing Alternatives
Decision maker to list viable alternatives to resolve the problem
Analysing Alternatives
Decision maker must critically analyse each one
Strengths and weaknesses
Appraising each one against the criteria
Selecting an Alternative
Choosing the best amongst those considered
Choose the one that generated the best results
Implementing the alternative
Decision into action
Conveying the decision to those affected by it
Reassess the environment
Evaluating Decision Effectiveness
Evaluating the outcome of the decision to see if the problem had been resolved
Making Decisions
Rational Decision Making
Described choices that are consistent and value constraints
Assumption of Rationality
This behaviour implies that people would rather take actions that benefit
Bounded Rationality
Behaviour that is rational within the parameters of a simplified decision-making process that is limited/bounded by an individual's ability to process information
Satisficing
Acceptance of solutions that are 'good enough'
Escalation of Commitment
An increased commitment to a previous decision despite evidence that it may be wrong
Intuitive Decision Making
A subconscious process of making decisions on the basis of experience, feelings and accumulated judgement
Decision-Making Conditions
Certainty
a manager can make accurate decisions because the outcome of every alternative is known
Uncertainty
a manager has neither certainty nor reasonable probability
Risk
a manager can estimate the likelihood of certain outcomes
Types of Problems and Decisions
Structured Problems
Straight forward, familar and easily defined problems
Programmed Decision
A repetitive decision that can be handled by routined approach
Procedure
A series of interrelated sequential steps that a manager can use to respond to a structured problem
Rule
An explicit statement that tells a manager what they can and cannot do
Policy
A guideline that establishes parameters for making decisions
Unstructured Problems
Problems that are new or unusual and for which information is ambiguous or incomplete
Non-Programmed Decisions
Unique decisions that require custom-made solutions
Effective Decision-Making
Understand cultural differences
Create standards for good decision making
Know when it is time to call it quits