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Decision making process:

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Recognizing and Defining the Decision Situation:
Following Up and Evaluating the Results:
Evaluating Alternatives:
Identifying Alternatives:
Selecting the Best Alternative:
Implementing the Chosen Alternative:

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Decision making is a critical management skill because ...

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A person's ability to think in the abstact, to diagnose and analyze various situations, and to see beyond the present situation.

Help managers lead, motivate, communicate with, and get along with their subordinates.

It affects all of the functions of management.

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Decision-making skills:

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Help managers lead, motivate, communicate with, and get along with their subordinates.

Help managers define problems or opportunities, and to select the best course of action.

Allow managers to perform specialized tasks.

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First, managers must make both problem decisions and opportunity decisions.: Opportunity decisions:

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There is a specific problem that must be resolved.

There is no specific problem but rather an opportunity present itself.

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Second, the decisions that managers make are either programmed decisions or non-programmed decisions.: Non-programmed decisions:

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Those that are made frequently and are highly structured.

Those that are made infrequently and are poorly structured.

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In the condtion of Uncertainty:

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The manager does not know all of the possible alternatives or the outcomes associated with each alternative.

The alternatives may be known, but their costs are simply probablilities rather than certainties.

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Second, the decisions that managers make are either programmed decisions or non-programmed decisions.: Programmed decisions:

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Those that are made infrequently and are poorly structured.

Those that are made frequently and are highly structured.

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Third, managers make decisions under several different risk condtions.: In the condition of Certainty:

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The manager knows what alternatives are available and what conditions are associated with each alternative.

Those that are made infrequently and are poorly structured.

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Recognizing and Defining the Decision Situation:

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Recognizing and Defining the Decision Situation:
Identifying Alternatives:
Evaluating Alternatives:
Selecting the Best Alternative:
Implementing the Chosen Alternative:
Following Up and Evaluating the Results:

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Alter an alternative has been selected, managers have to implement it.
Possible alternatives courses of effective action.
Choosing the best available alternative is a key activity in decision making.
The final step in the decision-making process requires managers to:
They must be thoroughly evalued to increase the chance that the alternative finally chosen will be successful.
Recognizing that a decision is necessary.

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Steps in the rational decision-making process:

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Recognizing and defining the decision situation.
Evaluating alternatives
Following up and evaluating the results
Implenting the chosen alternative
Indentifying alternatives
Selecting the best alternative

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Managers must deal with three basic decision characterisitics:

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The decisions that managers make are either programmed decisions or non-programmed decisions.
Managers must make both problem decisions and opportunity decisions.
Managers make decisions under several different risk condtions.

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Steps in the rational decision-making process:

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Step 1: Recognizing and defining the decision situation.
Step 2: Indentifying alternatives
Step 3: Evaluating alternatives
Step 4: Selecting the best alternative
Step 5: Implenting the chosen alternative
Step 6: Following up and evaluating the results

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Detail: Some stimulus indicates that a decision must be made. The stimulus may be positive or negative.
Detail: Each alternative is evaluated to determine its satisfactoriness, and its consequences.
Detail: Both obvious and creative alternatives are desired. In general, the more important the decision, the more alternatives should be generated.
Detail: Consider all situational factors and choose the alternative that best fits the manager's situation.
Detail: At some time in the future, the manager should ascertain the extent to which the alternative chosen in step 4 and implemented in step 5 has worked.
Detail: The chosen alternative is implemented into the organizational system.

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In the condtion of Risk:

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The manager knows what alternatives are available and what conditions are associated with each alternative.

The alternatives may be known, but their costs are simply probablilities rather than certainties.

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Basic Decision Chracterisitics: First, managers must make both problem decisions and opportunity decisions.

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Problem decisions:
Opportunity decisions:

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There is no specific problem but rather an opportunity present itself.
There is a specific problem that must be resolved.

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First, managers must make both problem decisions and opportunity decisions: Problem decisions:

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There is a specific problem that must be resolved.

There is no specific problem but rather an opportunity present itself.