decision making

Topics: Decision making, Decision theory, Risk Pages: 18 (4837 words) Published: October 31, 2014
Contents
INTRODUCTION4
DECISION MAKING4
Programmed Decisions4
Non-Programmed Decisions5
THE RESPONSIBILITY FOR MAKING DECISIONS5
ELEMENTS OF THE DECISION SITUATION6
- The Decision Maker6
- Goals to be Served6
- Relevant Alternatives6
- Ordering of Alternatives6
- Choice of Alternatives.6
THE RATIONAL MODEL OF DECISION MAKING8
Steps in the Decision Making process8
Identifying an Existing Problem9
Listing Alternative Solutions10
Select the Most Beneficial Of These Alternatives11
Implement the Selected Alternative11
Gathering Problem-Related Feedback12
BOUNDED RATIONALITY12
DECISION MAKING AND INTUITION13
What is Intuition - What is Intuitive Decision Making?14
How Intuition can influence decision making by managers14
PROBABILITY THEORY16
An Intuitive Approach16
RELEVANCE OF PROBABILITY THEORY17
Investment Problem17
Introducing a New Product18
GROUP DECISION MAKING18
Identification of several alternatives19
Knowledge sharing by cross-functional teams19
Implementation effectiveness19
More acceptance of decision20
Piggybacking20
Domination by team members20
Time Consuming21
Free Riders21
Group Think21
Group Decision Making Process21
Nominal Group Technique22
Delphi Technique23
EVALUATING GROUP DECISION MAKING PROCESSES23
What is Risk?23
Strategic risks24
Financial risks24
Legal risks24
Certainty25
Uncertainty25
CONCLUSION26
REFERENCE27
BIBLIOGRAPHY …………………………………………………….………………………………………………............................. 28


INTRODUCTION
Whether we realize it or not, decision-making is a part of our daily lives. Everyday there are decisions to be made. Some of those decisions are minor and some of them are life changing. Some of the decision that has to be made is oftentimes obvious and straightforward, while others have to be critically analyzed to arrive at the best alternative. In a similar way organizations must make decisions on a daily basis. Decision making within in an organization is vital for growth and development and should be done effectively for maximum results. The importance of a good decision is relevant to the any organization’s success, thus it is important to have an effective decision-making process so as to prevent poor decisions from being made. This project will look at Decision Making within the organization and the steps that must be followed in order for the decisions to be effective. DECISION MAKING

A decision is a choice made between two or more available alternatives (Certo, 2012). There are two (2) types of Decisions:
Programmed and;
Non-programmed Decisions
Programmed Decisions

Programmed decisions are decisions that occur often enough in an organization which standardized rules are used to make. They are used in relation to repetitive duties which the organization develop a systematic way of monitoring. These standardized rules can take the form of decision guidelines, standard operation procedures, or checklist. Programmed decisions help to ensure that tasks are performed smoothly and consistently, for example the amount of material to put into a specific product. Non-Programmed Decisions

Non-programmed Decisions are decisions that occur infrequently enough in an organization that standardized rules cannot be used to make them. When making non-programmed decisions managers must rely on their experience and intuition. They must be able to think critically and make decisions based on the facts presented. Decisions about new products or building new manufacturing facilities are examples of non-programmed decisions. THE RESPONSIBILITY FOR MAKING DECISIONS

When decisions are to be made, someone has to make them. Generally, top managers make both non-programmed decisions and risky and uncertain decisions. These are usually broad objectives relating to the direction the organization will take. Middle managers often have the tasks of transforming non-programmed...

Bibliography: DECISION MAKING
A decision is a choice made between two or more available alternatives (Certo, 2012).
ELEMENTS OF THE DECISION SITUATION
There are five elements in the Decision Situation, these elements are very important in the decision making process (Certo, 2012)
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