Decision making

Types of decision Programmed decisions Non-programmed decisions

Features of decision types Programmed –Repetitive/routine –For example: processing applications –Procedures: Apply rules Apply policies Use standard procedures Non-programmed –Complex/new –For example: Introduce new product Building new facilities –Procedures: Creative problem solving

Process of decision making 1. Identify problem

Process of decision making 1. Identify problem 2. Develop alternative solutions

Process of decision making 1. Identify problem 2. Develop alternative solutions 3. Evaluate alternative solutions

Process of decision making 1. Identify problem 2. Develop alternative solutions 3. Evaluate alternative solutions 4a. Certainty conditions 4b. Risk conditions 4c. Uncertainty conditions

Process of decision making 1. Identify problem 2. Develop alternative solutions 3. Evaluate alternative solutions 4a. Certainty conditions 4b. Risk conditions 4c. Uncertainty conditions 5. Select alternative

Process of decision making 1. Identify problem 2. Develop alternative solutions 3. Evaluate alternative solutions 4a. Certainty conditions 4b. Risk conditions 4c. Uncertainty conditions 5. Select alternative 6. Implement decision

Process of decision making 1. Identify problem 2. Develop alternative solutions 3. Evaluate alternative solutions 4a. Certainty conditions 4b. Risk conditions 4c. Uncertainty conditions 5. Select alternative 6. Implement decision 7. Evaluate and control

Process of decision making 1. Identify problem 2. Develop alternative solutions 3. Evaluate alternative solutions 4a. Certainty conditions 4b. Risk conditions 4c. Uncertainty conditions 5. Select alternative 6. Implement decision 7. Evaluate and control

Terminology State of nature –Event beyond a manager’s control – that could actually happen Strategies –Describes alternative solutions available to decision-maker