Decision Making Notes

7 steps of the decision-making process

1. Identify the decision.
2. Gather relevant info.
3. Identify the alternatives.
4. Weigh the evidence.
5. Choose among the alternatives.
6. Take action.
7. Review your decision.

Difference between Reactive Management and Proactive

Management
S. No Reactive Management
1. Reactive management
consists of reacting quickly
after the problem occurs, by
treating the symptoms.
2. This type of management is
implemented by reactive
systems, self-adaptive systems, through leadership that
self-organized systems, and
complex adaptive systems.
3. The goal here is to react
quickly and alleviate the effects
of the problem as soon as
possible.
Proactive Management
Proactive management is
a leadership style that
emphasizes strategic
planning and risk
management rather than
taking a reactive approach
to situations and business
goals.
Proactive management can
be applied to any industry
puts an emphasis on
planning and forward
thinking.

1
What is Fault Tree Analysis? (FTA)
Fault tree analysis (FTA) was originally developed in 1962 at Bell
Laboratories by H.A. Watson, under a U.S. Air Force Ballistics
Systems Division contract to evaluate the Minuteman I
Intercontinental Ballistic Missile (ICBM) Launch Control System.
Fault tree analysis (FTA) is a type of failure analysis in which an
undesired state of a system is examined.
This analysis method is mainly used in safety engineering and
reliability engineering to understand how systems can fail, to identify
the best ways to reduce risk and to determine (or get a feeling for)
event rates of a safety accident or a particular system level
(functional) failure.
Fault tree analysis can be used to:
 Understand the logic leading to the top event / undesired state.
 Show compliance with the (input) system safety / reliability
requirements.
 prioritize the contributors leading to the top event- creating the
critical equipment/parts/events lists for different importance
measures
 Monitor and control the safety performance of the complex
system (e.g., is a particular aircraft safe to fly when fuel valve x
malfunctions? For how long is it allowed to fly with the valve
malfunction?).
 Minimize and optimize resources.
 Assist in designing a system. The FTA can be used as a design
tool that helps to create (output / lower level) requirements.
 Function as a diagnostic tool to identify and correct causes of the
top event. It can help with the creation of diagnostic manuals /
processes.

2
Different Methods of Decision Making
One of the methods of decision-making calls upon authoritative
decision making.
Authoritative decision making might be recommended only for team
leaders or project managers who have the required ability to use this
method of devising decisions. Authoritative decision making is used
when a person held responsible has all the knowledge and expertise
to churn out the best possible solution to the problem. In such
conditions the leader is the sole person to make a decision.
Heuristic Decision Making
Heuristics is the process by which humans use mental short cuts to
arrive at decisions. Heuristics are simple strategies that humans,
animals, organizations, and even machines use to quickly form
judgments, make decisions, and find solutions to complex problems.
Often this involves focusing on the most relevant aspects of a problem
or situation to formulate a solution. While heuristic processes are
used to find the answers and solutions that are most likely to work or
be correct, they are not always right or the most accurate. Judgments
and decisions based on heuristics are simply good enough to satisfy a
pressing need in situations of uncertainty, where information is
incomplete. In that sense they can differ from answers given by logic
and probability.
The economist and cognitive psychologist Herbert A. Simon
introduced the concept of heuristics in the 1950s, suggesting there
were limitations to rational decision making. In the 1970s,
psychologists Amos Tversky and Daniel Kahneman added to the field
with their research on cognitive bias. It was their work that
introduced specific heuristic models, a field which has only expanded
since.
While some argue that pure laziness is behind the heuristics process,
others argue that it can be more accurate than decisions based on
every known factor and consequence, the less-is-more effect.

3
Strategic Decision Making
Strategic decision-making is the process of charting a course based on
long-term goals and a longer-term vision. By clarifying your
company's big picture aims, you'll have the opportunity to align your
shorter-term plans with this deeper, broader mission – giving your
operations clarity and consistency.
Strategic decision making aligns short-term objectives with long-term
goals, and a mission that defines your company's big picture purpose.
Shorter term goals are expressed in quantifiable milestones that give
you the capacity to measure your success and your adherence to your
vision.