ibm: managerial decision making

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MANAGERIAL DECISION MAKING

MADE BY: ARSHIA TAHIR BS-III

DECISION MAKING

1)CATEGORIES OF

DECISIONS Programm

ed & non-programm

ed

2)DECSION MAKING

SITUATIONS certainty,

risk,uncertainty, ambiguity3) STEPS

IN DECISION MAKING

4) DECISION MAKING MODELS

Classical,adminitrative

,political

5) DECISION MAKING STYLES

Directive, analytical, conceptua

l, behavioral

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OVERVIEW OF MANAGERIAL DECISION MAKING

6) PARTICIPATION IN

DEICISON MAKING

MADE BY: ARSHIA TAHIR BS-III 3

DECISION. DECISION MAKING. CATEGORIES OF

DECISIONS. SITUATIONS OF DECISION

MAKING


DECISIONChoice made from

available alternatives.

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DECISION MAKING

Process of identifying

problems and opportunities and resolving

them.Decision making is not easy

It must be done amid • ever-changing factors • unclear information • conflicting points of view


CATEGORIES OF DEICISONS

PROGRAMMED DECISIONS

• Involve problems or situations that have occurred often.

• Circumstances and solutions are predictable.

• Decisions are made in response to recurring organizational problems.

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• Made in response to problems that have unique circumstances.

• May provide unpredictable results.

• Situations that have never occurred before.

NON-PROGRAMMED DECISIONS


SITUATIONS OF DECISION MAKING

DECISION MAKING UNDER CERTAINTY

DEICISON MAKING UNDER RISK

DEICISION MAKING UNDER UNCETAINTY

DECISION MAKING UNDER AMBIGUITY


CERTAINTY RISK UNCERTAINTY AMBIGUITY

All information is available

Decision has clear-cut goals.

Managers know which goals they want to achieve.

Most difficult decision situation.

Good information is available.

Information about future alternatives and events is incomplete.

Goals to be achieved or problems to be solved is unclear.

Future outcomes associated with each alternative are subject to chance

Managers may have to come up with creative goals and alternatives.

Alternatives are difficult to define.

Information about outcome is unavailable. 7


STEPS IN

DECISION MAKING PROCESS

PRESENTED BY: FARZANA NIAZI


DECISION

MAKING PROCES

S

1) IDENTIFY A PROBLEM

OR OPPORTUNI

TY 2) GATHERING INFORMATI

ON

3)ANALYZE THE

SITUATION

4)DEVELOP

OPTIONS5)

EVALUATION OF

ALTERNATIVES

6) SELECT THE BEST

ALTERNATIVE

7) ACT ON THE

DECISION

8) EVALUAT

E THE RESULTS

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Identifying the purpose of decision is based on following reasons:

1) What exactly is the

problem?

2) How the

problem should

be solved?

3) Who are the affected parties of the

problem?

4) Does the

problem have a

deadline or a

specific time-line?

The problem and the opportunity is thoroughly analyzed.

IDENTIFY A PROBLEM OR OPPORTUNITY

1

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2) GATHERING INFORMATION

what is relevant and what is not relevant to the decision?What do you need to know before you can make a decision, or that will help you make the right one?

Who knows, who can help, who has the power, and influence to make this happen ( or to stop it)?

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3)ANALYZE THE SITUATION

What alternative courses of action may be available to you?

What different interpretations of the data may be possible?


4) DEVELOP OPTIONS

List down all the ideas/options and be creative and positive.

Ask ‘WHAT IF’ questions.

Generate all possible solutions to the problems.


5) EVALUATION OF ALTERNATIVES• What criteria should you use to

evaluate?• Evaluate for feasibility, acceptability,

and desirability.• Which alternative will best achieve

your objectives?6) SELECT THE BEST ALTERNATIVEExplore the provisional best alternative for future possible adverse consequences.What problem might it create?What are the risks of making this decision?

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7) EXECUTE DECISIONConvert your decision into a plan or a sequence of activities. Is the decision accepted and supported by colleagues?

8) EVALUATE RESULTSEvaluate the outcome of your decision. See whether there is anything you should learn and then correct in future decision making. This is one of the best practices that will improve your decision-making skills. 16


DECISION MAKING MODELS CLASSICAL MODELADMINISTRATIVE MODELPOLITICAL MODEL

Depends on the manager’s personal preferenceWhether the decision is programmed or non-programmedExtent to which the decision is characterized by certainty, risk, uncertainty, or ambiguity


THE CLASSICAL/ RATIONAL MODEL

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THE ADMINISTRATIVE/ BOUNDED RATIONALITY MODEL

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POLITICAL MODEL

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When faced with a decision situation, managers

are:

Neither rational

nor objective

or unbiased.

Engage in

colliation

buildingIt

resembles the real

environment in which managers operate.

Useful in making

non-program

med decisions.

Decisions are comple

x


CLASSICAL MODEL

Clear-cut problems and goals.

Conditions of certainty.

Full information about alternatives and their outcomes.

Rational choice by individual for maximizing outcomes.

ADMINITRATIVE MODELVague(unclear) problems and goals. Conditions of

uncertainty.

Limited information about alternatives and their outcomes.

Satisficing choice for resolving problems using intuition(gut feeling).

POLITICAL MODEL

Conflicting goals.

Conditions of uncertainty and ambiguity(unclear).

Inconsistent (conflicting) viewpoints

Bargaining(negotiate) and discussion making among colliation members.

CHARACTERISTICS OF MODELS

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DIRECTIVE STYLEANALYTICAL STYLECONCEPTUAL STYLEBEHAVIORAL STYLE


Decision Style: Differences among people with respect to how they perceive problems and make decisionsNot all managers make decisions the same.


PERSONAL DECISION FRAMEWORKSITUATION: PROGRAM

MED NON-

PROGRAMMED

CLASSICALADMINISTR

ATIVE POLITICAL DECISION

STEPS

PERSONAL DECISION

STYLE: DIRECTIVE ANALYTICA

L CONCEPTU

ALBEHAVIORA

L

DECISION CHOICE:

BEST SOLUTION

TO THE PROBLEM.


DIRECTIVE STYLE

Leader is aggressive(forceful)/ autocratic in nature.The leader does not ask for any suggestions or ideas from outside sources.They rely on their own internal information, knowledge, experience and judgment.Consider few alternatives.The leader is also completely responsible for the good or bad outcome as a result of the decision. Employees have low abilities.Relies heavily on rules.

Leader maintains total control and ownership of the decision.

Good verbal communicator.


Leader is innovative and likes to analyze large amounts of data before making a decision.

They are adaptable and can function well even under unique or challenging situations. An analytic decision maker wants to use direct observation, data, and facts when coming to a decision. They probably enjoy solving problems.

The decision-making style is due to uncertainty, and lack of information.

ANALYTICAL STYLE

Use great care in alternatives and analysis i.e.: What if ?


CONCEPTUAL STYLEConceptual style decision makers like to look at problems from an artistic angle.They are extremely creative and like to look for solutions that are outside the box. They are achievement oriented and like to think far into the future when making important decisions. This kind of decision making is for a long term, and subjected to changes.Look at many alternatives.Will take risks and try to make decisions that take a broad vision in problem solving.Employees have high abilities.When leader is achievement-oriented, the employees also have high achievement motivation.


Behavioral decision makers like working with a group, democratic in nature.

Very interested in making sure that everyone works well together and avoids conflict.

Together they attempt to settle differences and negotiate a solution that is acceptable to all parties.

He makes decision based on what feels right, and what will motivate the team members to perform( interesting and unstressed tasks) The decision is communicated clearly and leaves no room for doubt.Prefer meetings.

BEHAVIORAL STYLE


PARTICIPATION IN DECISION MAKING


Helps gauge the appropriate amount of participation for subordinates in process

●Leader Participation StylesFive levels of subordinate participation in decision making ranging from highly autocratic to highly democratic.

PARTICIPATION IN DECISION MAKINGVroom-Jago

Model


SEVEN LEADERSHIP DIAGNOSTIC QUESTIONS

How significant is the decision?

How important is subordinate commitment?

What is the level of the leader’s expertise?If the leader were to make the decision alone at what level would subordinates be committed to the decision?What level is the subordinate’s support for the team or organization’s objectives?What relative t is the member’s level of knowledge or expertise to the problem?How skilled or committed are group members to working together?


Diagnostic QuestionsDecision participation depends on the responses to seven diagnostic questions about

●the problem ●the required level of decision quality

●the importance of having subordinates commit to the decision


NEW APPROA

CHES FOR

TURBULENT TIMES

BRAIN STORMING

ENGAGE IN

RIGOROUS

LEARN;

DON’T PUNIS

H

KNOW WHEN

TO BELL

PRACTISE THE FIVE WAYS

NEW APPROACHES FOR TURBULENT TIMES

ibm: managerial decision making

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