chapter 06 decision making by koontz

8/13/2019 Chapter 06 Decision Making by Koontz

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Decision MaPresented By: Sajjad Ahmad Qadri

Minhaj University, Lahore

ESSENTIALS OF M

Sixth Edit

Weihrich and


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After studying this chapter, you understand

1.

2.

3.

4.

Decision making as a rational process.

The

The

The

development of alternative courses of action

selection from among alternatives.

differences between programmed andnonprogrammed decisions.

Decisions made under conditions of certainty,

uncertainty, and risk.

The importance of creativity and innovation in

managing.

The major principles, or guides, for planning

5.

6.

7.

2004 H. Weihrich Chap. 6. Decision Making


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Decision Making

Decision making is defined as theselection of a course of action from

among alternatives



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Decision Making Process

1.

2.

3.

Premising,

Identifying alternatives,

Evaluating alternatives in terms

goal sought, andof the

4. Choosing an alternative,making a decision

that is,



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Limited, or "Bounded," Rationality

Limitations of information, time, andcertainty limit rationality, even though a

manager tries earnestly to be

completely rational

Satisficing is picking a course of actionthat isunder

satisfactory or good enoughthe circumstances



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Development of Alternatives and theLimiting Factor

A limiting factor is something thatstands in the way of accomplishing a

desired objective

The principle of the limiting factor:

recognizing and overcoming thosefactors that stand critically in the way

By

of

a goal, theaction can

2004 H. Weihrich

best alternative course ofbe selected

Chap. 6. Decision Making


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Quantitative and Qualitative Factors

Quantitative factors are factors thatcan be measured in numerical terms

Qualitative, or intangible, factorsare

those that are

numerically

difficult to measure



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Marginal Analysis

Marginal analysis is to compareadditional revenues and the additional

outputcost arising from increasing



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Cost Effectiveness Analysis

Cost effectiveness analysisseeks thebest ratio of benefit and cost



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Selecting an Alternative: ThreeApproaches

When selecting from amongmanagers can use:

alternatives,

1.

2.

3.

Experience,

Experimentation, and

Research and analysis.



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Programmed And NonprogrammedDecisions

Programmed decisions are used forstructured or routine work

Nonprogrammed decisions are used

for unstructured, novel, andsituations of a nonrecurring ill-definednature



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Creativity and Innovation

Creativity refers to the abilitypower to develop new ideas

and

Innovationmeans the use of new ideas



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The Creative Process The creative process is seldom simple and

linear It generally consists of four

interacting phases:

Unconscious scanning

Intuition

Insight

overlapping and

1.

2.

3.

4. Logical formulation or verification



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Rules for Brainstorming

1.

2.

No ideas are criticized

The more radical the ideas are, the

better

3. The quantity of ideastressed

production is

4. The improvementencouraged

of ideas by others is


chapter 06 decision making by koontz

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