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DECISION-MAKING

Individuals, corporations, and governments

make important decisions every day. To mak

e the best decisions, they need to accurately

weigh the relative benefits and costs of vario

us alternatives.

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PROBLEM DEFINITION

Take time to properly define the problem.

What is the issue to be covered?

What is the problem?What decisions need to be taken?

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PROBLEM

DEFINITION

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1) Does a problem

exist?

2) Can anything be doneabout it?

3) Does the client have

the power?

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Pitfalls in public policy problem definition:

1) accepting the client's definition of the

problem

2) looking only for the simple and obvious

3) thinking that any and all problems needa public solution

4) confusing the need for short- versus

long-term solutions5) confusing the values of individuals

versus collectivities

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DEVELOPING PROBLEM STATEMENTS

1) think about the problem

2) delineate the boundaries of the

problem

3) develop a fact base

4) list goals and objectives for policy

solutions

5) identify the policy envelope (keyplayers)

6) develop preliminary costs and

benefits

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BACK-OF-THE-ENVELOPE CALCULATIONS

dimensions of the problem and potential solutions

1) How many people are we talking about?

2) What is the likely cost per unit of service?

3) How much of the target population can weserve?

4) How much do we have available to spend?

5) Will more staff be needed?

6) Will this impact the budget/tax rate?7) What are the trends in this area?

8) What will happen if we do nothing?

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The information for doing back-of-

the-envelope calculations can come

from:

1) reference works

2) experts

3) past studies or quick research

4) informed guesses, extrapolation,

rules of thumb, estimation,

parallel reasoning, triangulation,

etc.

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Setting Goals

Clarify goalsResolve conflicting goalsFocus on the central, critical factors

Is it important? Is it unusual? Can it besolved?

Identify who is concerned, and why?

What power do concerned parties have?Make a quick estimate of resources

required to deal with the problem

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A fish-bone diagram will sometimes help in understanding

the complex inter-linkages that create a particular 'problem'.

For each of the causes or its effects, make a list of

information or data that will be required, and clarify how that

information will lead to a better decision.

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PROBLEM TREE

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GATHERING AND ANALYZING INFORMATION

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Information youdon't know you

don't have

Information youdon't know you

have

Information youknow you don't

have

Information youknow you have

Four states of information possession

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GENERATING ALTERNATIVES

AND SELECTION CRITERIA

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TYPES OF ALTERNATIVES

Incremental

Branching

Innovative

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DECIDING

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Decision-making as Problem-solving?

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A Developmental Problem Solving Process

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Decision analysis

A structured way of thinking

about how the action taken in thecurrent decision would lead to a

result

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Alternatives

Are the courses of action that one might take

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Uncertainties

These are those uncontrollable

elements that we sometimes callluck. The chance of an event

happening or not happening

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Outcome

Is the result of the decisionsituation and is measured on the

scale of the decision maker'svalues.

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Option

An option is an alternative

that permits a futuredecision following revelation

of information.

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Forecasts

Predictions of the future, to

guide choice of alternatives.

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Trade-offs

Are judgments about how much a

person is willing to sacrifice on onevalue in order to receive more of

another.

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Risk

Is the possibility of an undesirable result.

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Risk tolerance

Is a technical term describing the

decision maker's attitude toward risk.