Decision Making

DECISON MAKING

* a conscious process of making choices among one or more alternatives with the intention of moving toward some desired state of affairs.

* means to achieve some result or to solve some problem

* outcome of a process influenced by many forces.

The Rational Decision-Making Process

1. Identify the problem or recognize an opportunity. A problem is a deviation between the current and the desired situation – the gap between “what is” and “what ought to be.” An opportunity is deviation between current expectations and a potentially better situation that was not previously expected.

2. Determine the most appropriate decision style. One important issue is wether this a programmed or nonprogrammed decision.

Types of Decision

1. Programmed decisions. If a particular situation occurs often, a routine procedure usually can be worked out for solving it. Thus, decisions are programmed to the extent that problems are repetitive and routine and a definite procedure has been developed for handling them.

2. Nonprgrammed decisions. Decisions are nonprogrammed when they are novel and unstructured. No established procedure exists for handling the problem, either because it has not arisen in exactly the same manner before or because it is complex or extremely important. Such problems deserve special treatment.

3. Develop a list of possible solutions. This step usually begins by searching for ready-made solutions, such as practices that have worked well on similar problems. If an acceptable solution cannot be found, then decision makers design a custom-made solution or modify an existing one.

4. Choosing the best alternatives. In a purely rational process, this would involve identifying all factors against which the alternatives are judged, assigning weights reflecting the importance of those factors, rating each alternative on those factors, and calculating each alternative’s total value from the ratings and factor weights.

5. Implement...