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 Management 1-8 Four Functions of Management Planning Choose Goals Controlling Organizing Monitor & measure Working together Leading Coordinate

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-Crisis A 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.

Three Levels of Management 1-14 Three Levels of Management Top Managers Middle Managers First-line Managers Non-management

Three Levels of Management Comparison of Decision making situation and management levels

Three Stages of the Planning Process Determining 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 Model Most popular type of model Based around a cognitive judgment Pros and cons of various options Non-Rational Models Satisficing Model Incremental Model Garbage-Can Model

Models of decision making cont…. Satisficing Model Managers seek alternatives One that looks satisfactory Not seeking the optimal decision. Incremental Model Managers 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. barriers Accepting the problem challenge Searching for sufficient Alternatives Recognizing common Decision Making Biases Avoiding the Decision Escalation Phenomenon

Managing diversity Group Decision Making Decision Making by more than one person Usually followed in organizations It 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