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Learning Objectives Define decision making. Describe how critical thinking skills are used in decision making. State how decisions relate to problem solving. Describe each step in the decision- making process.

© 2006 Thomson-Wadsworth Learning Objectives Differentiate between structured and unstructured problems, and between programmed and non-programmed decisions. Describe the different styles used by managers for decision making. Discuss how ambiguity, rationality, and intuition influence decision making.

© 2006 Thomson-Wadsworth Learning Objectives Identify the relationship between decision making and risk. List the advantages and disadvantages of group decision making.

© 2006 Thomson-Wadsworth The Process of Making Decisions Decision-Making Process –The logical, stepwise approach that is used to make a choice between options, to solve a problem, or to resolve a dilemma. Contingency Planning –Anticipation of the need to make a decision some time in the future and making the decision in advance so that it can be implemented in a timely manner at the time it is needed.

© 2006 Thomson-Wadsworth The Process of Making Decisions

© 2006 Thomson-Wadsworth The Process of Making Decisions Problem Identification –The first step in the decision-making process; the act of finding a problem and acknowledging that it exists. –Problem - A difference between what is and what should be. –ex: nutrient analysis software in clinical nutrition dept. needs upgrade

© 2006 Thomson-Wadsworth The Process of Making Decisions Criteria for decision making –Establish Decision-Making Criteria - The second step in the decision-making process; determining which factors will have the most relevance in solving a given problem. –ex: list required and desired specs. for nutrient analysis software

© 2006 Thomson-Wadsworth The Process of Making Decisions Weighting criteria –Weighting the Decision-Making Criteria - The third step in the decision-making process; assigning each established criterion a ranking in terms of importance to the decision that is to be made. –ex: Table

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The Process of Making Decisions Developing alternatives –Identify the Alternatives - The fourth step in the decision-making process; the act of determining the different options available to solve the problem at hand. –ex: research available software packages

© 2006 Thomson-Wadsworth The Process of Making Decisions Analysis of alternatives –Analyze the Alternatives - The fifth step in the decision-making process; the process of comparing and examining the alternatives available by measuring them against the same standards, using only relevant criteria. –ex: quantified analysis in Table

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The Process of Making Decisions Choosing an alternative –Making the Decision - The sixth step in the decision-making process; involves choosing which alternative(s) will best solve the problem based on the analysis that has been done. –ex: choose software package to purchase (Option C from Table 4.3)

© 2006 Thomson-Wadsworth The Process of Making Decisions Implementing the decision –Implement the Decision - The seventh step in the decision-making process; the act of carrying out the decision that has been made; often involves communicating exactly what is to happen based on the decision. –ex: purchase and install software, train dietitians to use it, enter data, etc.

© 2006 Thomson-Wadsworth The Process of Making Decisions Evaluation –The eighth and last step of the decision-making process; receiving feedback about the decision that has been implemented –Was it effective, efficient, appropriate, and adequate? –ex: Did the software upgrade improve efficiency, quality patient service, etc.?

© 2006 Thomson-Wadsworth Types of Decisions Structured problems and programmed decisions –Structured Problem - A discrepancy between what is and what should be that is both routine and predictable. –Programmed Decisions - Decisions that are made routinely, often relying on precedent, in which information can be transferred from one similar situation to the next; usually used to solve structured problems.

© 2006 Thomson-Wadsworth Types of Decisions Structured problems and programmed decisions –Programmable Decisions - Decisions that, though not yet programmed, are of the routine type that can be programmed.

© 2006 Thomson-Wadsworth Types of Decisions Unstructured problems and nonprogrammed decisions –Unstructured Problem - A discrepancy between what is and what should be that is new, unusual, and often unpredictable. –Nonprogrammed Decisions - Decisions that are used to resolve unstructured problems; these decisions require much research and thought.

© 2006 Thomson-Wadsworth Types of Decisions Unstructured problems and nonprogrammed decisions –Institutional Memory - The historical precedent of an organization that can be used in the decision-making process.

© 2006 Thomson-Wadsworth Types of Decisions Managerial levels and decision making –Type of decision made by a manager correlates with his/her management level –Most nonprogrammed decisions are made by upper-level managers

© 2006 Thomson-Wadsworth Decision-Making Styles Problem Avoider –A decision-making style in which the person does not recognize a problem or chooses to avoid it; one who may make the choice not to make a decision.

© 2006 Thomson-Wadsworth Decision-Making Styles Problem Solver –A decision-making style in which the person recognizes existing problems and deals with them in a timely manner. –Reactive - A characteristic of a problem solver who acts on problems after they have become obvious. Problem Seeker –A decision-making style in which the person is proactive and deals with potential problems before they become obvious.

© 2006 Thomson-Wadsworth Decision-Making Styles Ambiguity versus rationality –Directive Decision Maker - A type of decision maker characterized by being efficient and logical, requiring little information to make a decision, looking at few alternatives, and exhibiting a low tolerance for ambiguity. –Conceptual Decision Maker - A type of decision maker characterized by being open to new ideas, looking at many alternatives, having a high tolerance for ambiguity, and relying on instinct versus logic and reason.

© 2006 Thomson-Wadsworth Decision-Making Styles Ambiguity versus rationality –Analytic Decision Maker - A type of decision maker who enjoys solving problems, likes to seek alternatives and information, can tolerate ambiguity, and applies a rational, methodical approach to solve problems. –Behavioral Decision Maker - A type of decision maker who uses intuition, feelings, and perceptions versus actual data, and who dislikes ambiguity.

© 2006 Thomson-Wadsworth Risk in Decision Making Certainty –A situation in which the outcome of a decision is known and expected. Risk –The unknown or uncertain factors or outcomes involved in making a decision. Uncertainty –A situation in which the outcomes of a decision cannot be predicted with any degree of accuracy.

© 2006 Thomson-Wadsworth Group Decision Making Accommodation –A situation in which members of a group feel that they have to accept the position of the dominant member of the group. De Facto Decisions –Decisions that are made passively with no obvious objections expressed.

© 2006 Thomson-Wadsworth Group Decision Making Groupthink –A characteristic of groups that evolves when the cohesiveness of the group becomes more important than the problem that needs to be solved. –In this situation, members feel loyal to each other and may not want to jeopardize this unity by expressing opposing opinions.

© 2006 Thomson-Wadsworth Group Decision Making Risk in group decision making –Shared risk = more willingness to take risks. –Information pool is larger. Maximizing group decision making –Brainstorming - The informal process of tackling a given problem by contributing as many ideas as possible without analysis or criticism.

© 2006 Thomson-Wadsworth Group Decision Making Maximizing group decision making –Nominal Group Technique – A methodical, rational approach to making a group decision in which each member contributes ideas, and alternatives are ranked to deduce a sensible, fair decision. –Delphi Technique - An approach to coming up with a group decision similar to the nominal group technique except that members do not meet but instead communicate and analyze ideas through written communication until consensus is reached.

© 2006 Thomson-Wadsworth Conclusion Decision making is an eight-step process that includes problem identification, establishment and weighting of criteria, development and analysis of alternatives, making the decision, implementing it, and following up. Structured problems require programmed or programmable decisions; unstructured problems require nonprogrammed decisions.

© 2006 Thomson-Wadsworth Conclusion Different levels of managers tend to make different types of decisions. Managers develop personal decision- making styles that can be described using one or more of the following terms: avoidance, reactive, proactive, directive, conceptual, analytic, and behavioral.

© 2006 Thomson-Wadsworth Conclusion There are distinct advantages and disadvantages to group decision making; techniques are available to maximize the group decision- making process.

© 2006 Thomson-Wadsworth Reality Check—Decision Clusters Many decisions may cluster around a particular problem Making one decision may trigger a series of other decisions ex: Reduce spending on oral and enteral supplements in a small community hospital/skilled nursing facility.