By: Qadeer AhmedBS(CIS)2008-12

Presentation Layout

• Definition• The nature of managerial decision making• Types of problems decision makers face• Differences in decision making situations• Models of decision making• Steps in an effective decision making process• Overcoming barriers to effective decision making• Managing diversity: group decision making• Summary and Conclusions

Definition

• The act of making up your mind about something, or a position or opinion or judgment reached after consideration.

• The process of selecting from several choices, products or ideas, and taking action.

Four Functions of Management

• An effective decision making includes following four steps

Four Functions of ManagementFour Functions of Management

PlanningChoose Goals

OrganizingWorking together

Leading Coordinate

ControllingMonitor & measure

1-8

Types of problems decision makers face

• Managerial decision making typically centers on three types of problems:Crisis

A crisis problem is a serious difficulty requiring immediate action.

Non-CrisisA non-crisis problem is an issue that requires resolution but does

not simultaneously have the importance and immediacy characteristics of a crisis.

Opportunity Problems.An opportunity problem is a situation that offers strong potential for

significant organizational gain if appropriate actions are taken.

Differences in decision making situations

• There are two situation Programmed Decision Making

Programmed Decisions are those made in routine, repetitive, well-structured situations through the use of predetermined decision rules.

Non-Programmed Decision Making

Non-programmed Decisions are those for which predetermined decision rules are impractical because the situations are novel and/or relatively ill structured.

Top Managers

Middle Managers

First-line Managers

Non-management

Three Levels of ManagementThree Levels of Management1-14

Three Levels of Management

Comparison of Decision making situation and management levels

Three Stages of the Planning ProcessThree Stages of the Planning ProcessDetermining the Organization’s

mission and goals(Define the business)

Strategy formulation(Analyze current situation &

develop strategies)

Strategy Implementation(Allocate resources & responsibilities

to achieve strategies)

Models of decision making

• Rational ModelMost popular type of modelBased around a cognitive judgment

Pros and cons of various options

• Non-Rational ModelsSatisficing ModelIncremental ModelGarbage-Can Model

Models of decision making cont….

• Satisficing Model Managers seek alternatives

One that looks satisfactory Not seeking the optimal decision.

• Incremental ModelManagers make the smallest response possible This reduce the problem to at least a tolerable

level.

Models of decision making cont….

• Garbage-Can Model Managers behave in virtually a random pattern

Steps in an effective decision making process

• Four steps for effective decision making

Overcoming barriers to effective decision making

• Means of overcoming D.M. barriersAccepting the problem challengeSearching for sufficient AlternativesRecognizing common Decision Making BiasesAvoiding the Decision Escalation Phenomenon

Managing diversity

• Group Decision MakingDecision Making by more than one personUsually followed in organizationsIt has some advantages and some disadvantages

Outlines

• Definition• The nature of managerial decision making• Types of problems decision makers face• Differences in decision making situations• Models of decision making• Steps in an effective decision making process• Overcoming barriers to effective decision

making• Managing diversity: group decision making

Summary and Conclusions

• Decision making is the process through which managers identify organizational problems and attempt to resolve them.

• There are three types of Problems Managers face• Situation differ in Decision Making Process• Managers follow different types of models during

decision making• Managing diversity

Questions????

Thanksfor your patience