Definition Decision : a choice made from among available alternatives Decision making: The process of identifying and choosing

ng alternative courses of action. Types of decisions Programmed decisions Repetitive and routine Fairly structured (not necessarily simple) Non-programmed decisions Non-routine Unfamiliar circumstances General Decision Making Styles Decision making style reflects the combination of how an individual perceives and responds to information. Dimensions of DM styles 1. Value orientation : Reflects the extent to which a person focuses on either task and technical concerns or people and social concerns when making decisions. 2. Tolerance for ambiguity: Indicates the extent to which a person has a high need for structure or control in his or her life.

How to use knowledge of DM styles It helps you to understand yourself To increase your ability to influence others by being aware of styles. It gives you an awareness of how people can take the same information and yet arrive at different decisions by using a variety of decision making strategies. Rational Decision Making also called classical model Explains how managers should make decisions Assumptions 1. Complete information, no uncertainty 2. Logical, unemotional analysis 3. Best decision for the organization

Non-rational Decision Making (1) Explain how managers do make decisions DM is nearly always uncertain and risky, making it difficult for managers to make optimum decisions. Models: 1. Bounded rationality & the satisficing model: The ability of decision makers to be rational is limited by numerous constraints 2. The incremental model: Managers take small, short-term steps to overcome a problem gradually, rather than steps that will accomplish a long-term solution. Non-rational Decision Making (2) The coalitional model Lets negotiate a solution Managers band together in groups favoring different alternatives, and the groups bargain, negotiate, and compromise on a particular problem The Garbage-can model Anything Goes Some conditions push managers make virtually random decisions The intuition model What experience tell me Managers quickly sizing up a situation and making a decision based on his or her experience or practice

Steps in practical decision making Identify the problem or opportunityDetermining the actual versus the desirable Think Up alternative solutions Both the obvious and creative solutions Evaluate alternative & select a solution (Ethics, Feasibility, & Effectiveness) Implement & Evaluate the solution chosen

Group Decision Making

What managers need to know about Groups & Decision Making They are less efficient groups take longer to make decisions There size affects decision quality The larger group, the lower the qualty of decision They may be too confident Groups are more cinfident about their judgment Knowledge counts accuracy is higher when group members know a good deal with the issues, group leader has ability ti weight members opinions