© 2014 wheresjenny.com Decision making and steps involved in it DECISIONMAKING & STEPS INVOLVED IN IT

© 2014 wheresjenny.com Decision making and steps involved in it What is Decision Making? Decision-making is an essential aspect of modern management. It is a primary function of management. Decision-making is the key part of manager's activities. Decisions are important as they determine both managerial and organizational actions. A decision may be defined as "a course of action which is consciously chosen from among a set of alternatives to achieve a desired result.”

© 2014 wheresjenny.com Decision making and steps involved in it Advantages of Decision Making

© 2014 wheresjenny.com Decision making and steps involved in it Steps In Decision Making 1) 2)3) 4) 5) 6) 7)

© 2014 wheresjenny.com Decision making and steps involved in it For accurate/rational decision-making attention should be given to the following points:  Identification of a wide range of alternative courses of action i.e., decisions..  A careful consideration of the costs and risks of both positive and negative consequences that could follow from each alternation.  Efforts should be made to search for new information relevant to further evaluation of the alternatives.  Re-examination of the positive and negative effects of all known alternatives before making a final selection  Arrangements should be made for implementing the chosen course of action  Efforts should be made to introduce creativity and rationality in the final decision taken.

© 2014 wheresjenny.com Decision making and steps involved in it Select the most suitable answer for each questions 1. Decisions fall into two categories: A)programmed and non-programmed B)everyday and crisis C)large and small D)production and administrative 2. Which of the following is not a step in the decision-making process? A)evaluate and choose an alternative B)identify the problem C)seek expert assistance D)generate alternative solutions 3. The possibility that a chosen action could lead to losses rather than the results intended is A)Uncertainty B)bad decision-making C)risk D)unfortunate 4. When individuals deny the importance of a danger or an opportunity they are exhibiting A)Complacency B)ignorance C)defensive avoidance D)satisfy 5. A difficulty serious enough to require immediate action is A)an opportunity problem B)a drastic problem C)an impact problem D)a crisis problem

© 2014 wheresjenny.com Decision making and steps involved in it 6. The cognitive process of developing an idea, commodity or discovery viewed as novel by its creator or a target audience is A)product development B)market research C)creativity D)cognitive thinking 7. Which of the following is not an advantage of group decision-making? A)Groupthink B)greater acceptance of decisions C)increased number of alternatives considered D)more information and knowledge focused on the issue 8. Biases in decision-making can include all of the following except A)Framing B)selectivity C)representativeness D)anchoring 9. The belief that managers behave randomly in making non-programmed decisions is the A)incremental model B)bounded-rationality model C)satisfying model D)rubbish-bin model 10. The belief that a manager's ability to make perfectly rational decisions is limited by cognitive capacity and time constraints is A)rational decision-making B)bounded rationality C)satisfying D)non-rational decision- making

© 2014 wheresjenny.com Decision making and steps involved in it Say True or false 1. The decision-making process starts with gathering information. 2. Procrastination is an example of an economic influence on decision making. 3. Higher interest rates result in higher costs of borrowing money 4. Rising prices causing lower buying power is referred to as an inflation risk. 5. Interest earned on savings may be referred to as the “time value of money.”

© 2014 wheresjenny.com Decision making and steps involved in it Multiple choice 1. The final step of the decision-making process is: A. evaluating the results. B. gathering information. C. identifying the problem. D. selecting the best course of action 2. Changes in the buying power of the dollar are measured by: A. the unemployment rate. B. the money supply. C. the consumer price index. D. interest rates. 3. Consumer spending is likely to rise when: A. unemployment is high. B. interest rates are low. C. taxes rise. D. people are putting more money into savings accounts

© 2014 wheresjenny.com Decision making and steps involved in it 4. Investments that may be difficult to convert to cash quickly have a high ____________ risk. A. inflation B. economic C. income D. liquidity 5. What a person gives up when making a decision is commonly called: A. the time value of money. B. a personal risk. C. an opportunity cost. D. spontaneity.