Unit 2:individual decision making

• The purpose of this unit is to equip students

with a theoretical knowledge of different
perspectives on how individuals(public
managers)make decisions by analysing
decision making models, techniques and
styles
 Specific learning outcomes
• Describe the rational decision making models
and its assumptions (8) :-pg. 18
• How do a manager go about in handling the
well structured problems and programmes
decision making? (20)
• Explain Ill-structured problems and
programme decision making. (20) pg 21
• Describe the conditions under which decision
are made (10)pg23
• Explain decision making styles (12)pg25
 1.Introduction
• As you will have noticed, the title of this unit is
selected fundamentals of decision making
• Wherever you are be at school or at work ,you
will need to make a number of decisions on a
daily basis. Some decisions will be easy to make if
all facts are at your disposal while others will be
complex
• Nevertheless you are following a particular
sequence when you are to make a decision
• It is important to realise that there are different
types of decisions to be made
Rational decision making(based on
assumptions)
• Rational decision making :can be defined as a process of
making logically and sound decision
• In this model individuals should follow eight steps when
making a decision which are
1. Problem formulation
2. Identification of decision criteria
3. Allocation of decision criteria
4. Development of alternatives
5. Analysis of an alternatives
6. Selection of alternatives
7. Implementation of alternatives
8. evaluation
The rational decision making model
involves the following assumptions
1. Problem clarity-
2. Known options
3. Clear preferences
4. Constant preferences
5. No time or constraints
6. Maximum payoff
Bounded rational decision making
model(accurate)
• A rational decision making model is one that
achieves the maximum social gain.
• It means that government or public managers
should make decisions which result in gains to
society which exceeds its benefits.
• The bounded rational is more accurate
description of how most decisions in
organisations are actually made
 Intuitive decision making
• Intuitive decision making has recently came out
of closet and into responsibility.
• There is a growing recognition that rational
decision making has been over emphasised and
that, in certain instances, relying on intuition can
improve decision making
• What is it?
• Can be defined as an unconscious process of
making decisions because of experience and
accumulated
• judgement
 Types of problems and decisions
• Public managers will be faced with different
types of problems and decisions and
depending on the nature of problem
• We can distinguish between well-structured
problems and programmed decisions and on
the other hand ill structured problems and
non programmed decisions
Well structured problems sand
programmed decisions
• Programmed decisions are standing decisions,
which exist to give public manager guidance in
the making of repetitive and routine decisions
• Well structured problems are straight forward,
familiar, easily defined problems
• In handling well structured problems, the
manager uses programmed decision's, standard,
procedures, methods, rules and policy represent
examples of programmed decisions
 Examples of programmed decisions
• Procedures : a procedure is a series of
consecutive steps created for realisation of
certain task
• Methods :complex tasks can be subdivided in to
procedures .
• Rules: are clear statements of what should be
done and should not be done.
• Policy : policy comprises vague guidelines for
decision making, it allows public manager to use
discretions without been subjected to certain
restrictions
Ill-structured problems and non
programmed decision making
• Sometimes situations involves ill-structured
problems that are new. information about
such problems is ambiguous or incomplete
• Public managers rely on non programmed
decision making in order to develop unique
solutions
• Requires large measure of creativity and
greater measure of discretions must be made
• Include budgets , strategies , programmes,
 Non programmed decisions
• Programmes: a programme comprises on a
number of steps for the achievement of
objectives
• Strategies : strategies are drawn up in reaction
to or in considerations of the actions of other
people
• Budget : the budget is the best known non-
programmed plan. Is a plan expressed in
numerical terms.
 Decision making conditions
• By identifying the type of decision, as well as
the conditions under which a decision is made
• Public managers should be in position to make
a better decisions
• And these conditions are certainty, risk,
objective probability, subjective probability
and uncertainty
 Condition of decision making
• Certainty :- a decision is made under
conditions of certainty when the available
options and the benefits or cost associated
with each are known
• There is perfect knowledge about available
options and their consequences
• Risk :-options are known but outcomes are
uncertain, there is no definite results
• Objective probability:- is based in historical
evidence and it is based on hard facts
• Public managers cannot be sure of certain events
will occur, but examining past records they can
determine the outcomes (risk is involved)
• Subjective probability:-uses discretion and no
knowing exactly the outcomes
• Uncertainty :- occurs when future is unknown
and the probability of its occurrence
• Conceptual style:- very broad and consider many
alternatives, focus is long range and very in
finding creative solutions to the problems.
• Behavioural style:- characterise decision makers
who work well with others
• Concerned with achievement of their employees,
they are receptive to suggestions from others
and heavily rely on meeting for communication.
 Decision making styles
• Public mangers have different styles when it
comes to problem solving and decision making
• There are three types of managers 1. problem
avoiders 2. problem solvers 3. problem seekers
• People differ along two dimensions: their way of
thinking, some of us tend to be rational and
logical in the way we think or process information
• Some people are intuitive and creative, they
perceive something as whole.
 Decision making styles
• Directive style:- people using the directive style
have low tolerance for ambiguity and seek
rationality. They are efficient and logical.
• This form of decision making relies on a rational
and autocratic style that results in the employee
using his own knowledge, experience and
judgment to choose the best alternative.
• Analytical style:-desire for more information,
managers with style are careful decision makers,
they can cope or adapt to new situations
• Conceptual style: individuals with conceptual
style tend to be very broad in their outlook
and considers many alternatives.
• Their focus is long range and they are very
good at finding creative solutions to the
problem.
• Behavioural style: this characterises the
decision maker who well with others. They are
receptive to suggestions from others and rely
heavily on meetings for communications. They
 Conclusion
• It is important to note that in this chapter we
discussed the most fundamental aspects of
decision making.
• In this chapter different aspects are discussed
such as the rational decision making model,
decision making- styles and types of decisions.