1. The Decision-Making Process

2. The Decision Making Process
Step Six
Evaluate the results
Step Five
Decide and Act
Step Four
Identify your values
Step Three
Consider the consequences
Step Two
Explore the alternatives
Step One
Define the Problem

3. Step One
Define the Problem

4. Step One—Define the problem
a situation that raises a question in one’s mind or causes a person to be uncertain
Problems often demand decision or action taking
You MUST define the problem in order to make a decision that will lead to its solution

5. Step One—Define the problem
Scarcity
Condition of not being able to have everything we want
Results when our wants exceed our ability to satisfy them
Unlimited wants; limited resources
Examples:
Natural resources
Time
Skill
Knowledge
Tools
Materials, etc.

6. Explore the alternatives
Step Two
Explore the alternatives

7. Step Two—Explore the alternatives
Choice
A decision, the act of deciding
Could be many choices or only two or three
Alternative
One of two or more options that can be selected
Important: consider ALL the alternatives in making a decision

8. Consider the Consequences
Step Three
Consider the Consequences

9. Step Three— Consider the Consequences
Incentive
Something that encourages or persuades a person to act
Also called advantage or “pros”
Example: high pay is usually a job incentive
Disincentive
Something that discourages or dissuades a person from acting
Also called disadvantage or “cons”
Example: midnight to 7 a.m. shift
Suggestion
If possible, write down choices and list advantages and disadvantages
Be sure of your choices before the next step

10. Step Four
Identify your Values

11. Step Four—identify your values
Difficult step
Select from your choices—the one YOU believe will be the best for you and your interests at this particular time
Value
Something a person considers important which is supported by a set of beliefs
Noneconomic (doesn’t involve money)
Values and beliefs influence our decisions

12. Step Four—identify your values
All choices we make result in benefits and costs
Benefits/Cost Analysis
Rational comparison of the value gained (benefit) and the value of what must be given up (cost) when a choice is made
Opportunity Cost
The highest valued alternative that must be given up when another option is chosen
Two alternatives; choose one, opportunity cost is the one given up (not sum of ALL other alternatives)

13. Decide & Act on Your Choice
Step Five
Decide & Act on Your Choice

14. Step Five—Act on Your Choice
Take action step
Enjoy your choice!

15. Step Six
Evaluate the results

16. Step Six Was your decision a good one?
Did your decision give you satisfaction?
What was right about it?
What was wrong about it?
Did you evaluate your choices thoroughly?
If you had to do it over again, would you make the same choice?
Did you miss a choice that might have been a better alternative?
Learn from your decisions!

17. Summary

18. Summary Situations occur in life that require decision making
Often, those decision are related to SCARCITY
Usually, there is more than one ALTERNATIVE to choose from
There is usually more than one VALUE to guide your decision

19. Summary You have the power to make choices in scarcity situations
our values influence our choices
Each of us has different INCENTIVES and DISINCENTIVES that influence our actions