33rd BAT, Module I: Organization Behavior 2075/8/14 Basanta Raj Sigdel/ Anita Poudel

Journey of life…

Life is all about choices… Some are easy …… Some are difficult Organizational_ Social Unit

Decision Making Decision Making – a way of life Individual Organizational Role of a decision maker is different in Objective or desired result Situation/Context Time Organizational_ Social Unit

Manager: A decision maker As a Manager, you will manage: Resources Relationship Results

Core Competencies of a Manager Delivering Results Managing Relationship Managing Resources Performing Manager Building Integrity

Decision Making- Essence of Managerial Function Planning Organizing Leading Controlling

“A Decision is a Judgment.” Peter Drucker INTUITION (Gut Feeling – past experience and personal values) REASONING (Facts and Figures) A decision is a Choice between or among various alternatives.

Illuminating the Nation !

What good decision makers do? - HBR They are very clear about the end goal; They think in terms of options or alternatives, often out of box; They seek diverse inputs and look from different angles

Decision Making Tools Problem Restatement technique SWOT analysis/ PEST analysis / Stakeholder analysis Brainstorming/ Delphi Technique / Nominal Group Technique Cause and effect Cost benefit analysis Six Thinking Hats  Problem Restatement Technique  Broaden our perspective of a problem, not to solve it  Help us identify the central issues & alternative solutions  Increase the chance that the outcome our analysis produces will fully, not partially, resolve the problem Decision Making Tools 50. II- SWOT Analysis: 1- Strength 2- Weaknesses 3- Opportunities 4- Threats Decision Making Tools 51. III- Pareto Principle: 80% of unfocussed effort generates only 20% of results. The remaining 80% of results are achieved with only 20% of the effort. Decision Making Tools 52. Decision Making Tools Individual Brainstorming: 1. Tends to develop fewer ideas, but takes each idea further 2. Can be risky for individuals. Valuable but strange suggestions may appear stupid at first sight. Group Brainstorming: 1. It is best for generating many ideas, but can be time consuming 2. Needs formal rules for it to work smoothly( Disagreements) 3. Group brainstorming sessions are usually enjoyable experiences, which are great for creating cohesion in a team IV- Brainstorming: No criticism of ideas, free rein is given to creativity 53. Decision Making Tools V- Cause& Effect VI- Porter’s 5 Forces: 54. VII- Cost Benefit Analysis: Cost/benefit analysis – evaluating quantitatively whether to follow a course of action. Add up the value of the benefits of a course of action and subtract the costs associated with it. Decision Making Tools 55. VII- Six Thinking Hats- Tools/ Framework Creative Positive Objective Feelings Negative Process Avoid confusion Parallel Thinking = cooperation

Six Thinking Hats

A Scenario Budget of Rs. 1 Million has been provisioned in the Rubi Valley Gaunpalika where you are working as Chief Administrative Officer. Different wards have demand of the amount for different needs- capacity building of women, park for senior citizens and additional educational programmes for the children of deprived groups and sports facilities for the youths.

A Scenario You are required to take a decision to allot the amount to ONE of the potential programme. Use six thinking hat tool to reach the decision. (Time 30 Minutes)

Six Cs of Decision making Construct: A clear picture of precisely what must be decided Compile: A list of requirements that must be met Collect: Information on alternatives that meet the requirements

Six Cs of Decision making Compare: Alternatives that meet the requirements Consider: The “what might go wrong” factor with each alternative Commit: To a decision and follow through with it.

Factors affecting decision making Nature of decision (programmed or non- programmed) Personal (values, habits, objectives and cognitive constraints) Psychological (motivation, selective biases) Attitude toward risk and uncertainty Social and Cultural Information inputs

“Maybe pushing on that wall to the left will give some space.” System thinking is crucial “Maybe pushing on that wall to the left will give some space.”

“Oops!”

Let’s remember Decision making is a way of life Multiple realities prevails in decision making. We should take them in perspective. Success of an organization depends on the quality of its decisions System thinking is crucial for making decisions Decisions should be reviewed and learning should be put in practice Decision with INTEGRITY is a must rational: information based; limited information resulted in bounded rationality

Concluding Thought “ I am not a product of my circumstances, I am a product of my Decisions” – Stephen Covey

THANK YOU