MGT162 : Chapter 3

CHAPTER 3 : THE NATURE OF DECISION MAKING

Definition 

Decision making is the process through which managers and leaders identify and resolve problems and capitalized on opportunities.

Types of Decision Making

1. Programmed decision

Decision that have occurred in the past and the response is routine. For example, student registration.

2. Non-programmed decision

Decision made in response to situations that are unique, unstructured and poorly defined. For example, handling disasters.

Types of condition under decision making

1. Certainty

2. Risk

3. Uncertainty 

Rationale of decision making

1. Gained all information needed

2. Objectives are known and list all of alternatives to choose

3. Need to be rational and logical

4. Act in the best interests

5. Overcome ethical dilemmas 

7 Step in Decision Making Process

1. Identify opportunities and diagnose problems

2. Identify objectives 

3. Generate alternatives 

4. Evaluate alternatives 

5. Reaching decision

6. Choose implementation strategies 

7. Monitor and evaluate feedback

Advantages and disadvantages of Group Decision Making 

Advantages

1. More experiences

2. More informations

3. Viewed from different perspectives 

4. Higher satisfaction 

5. Greater acceptance 

Disadvantages 

1. More time needed

2. Dominated by an individual or subgroup

3. Authoritative leader

4. Group think

5. Less concerned with the group’s goals

5 Technique

1. Brainstorming 

- Encourage group members to generate more ideas as many as possible without evaluate them until later

2. Nominal Group Technique 

- Use one ore more small group to generate ideas and evaluate alternatives resolutions

3. Delphi Technique 

- Decision making carried out without the members having to meet face to face

4. Devil’s advocacy approch

- An individual or subgroup appointed to critique a proposed course of action

5. Dialectical inquiry

- Involves approching a decision from two opposite points and structuring a debate between conflicting views

Implications in decision making

1. Able to recognize problem quickly

2. Create awareness and understanding

3. Able to differentiate between strategic and operational decisions 

4. Be familiar with the framework

5. Equipped with all technique that aid in decision making