DECISION-MAKING

ENGINEERING MANAGEMENT
 Overview:
The engineer, manager’s decision-making skills
will be very crucial to his success as a
professional. A major blunder in decision-making
may be sufficient to cause the destruction of any
organization.

Good decisions, on the other hand, will provide

the right environment forcontinuous growth and
success of any organized effort.
DECISION-MAKING AS A MANAGEMENT
RESPONSIBILITY
Decision-making is a responsibility of the engineer
manager. It is understandable for managers to make
wrong decisions at times. The wise manager will correct
them as soon as they are identified.
The bigger issue is the manager who cannot or do not
want to make decisions. This type of managers are
dangerous and “should be removed from their positions
as soon as possible.” 
Management must strive to choose a decision option as
correctly as possible. Since they have that power, they are
responsible for whatever outcome their decisions bring.
The higher the management level is, the bigger and the
more complicated the decision-making becomes.
WHAT IS DECISION-MAKING?
Decision-making may be defined as “the process of
identifying and choosing alternative courses of
action in a manner appropriate to the demands of the
situation.”
that the engineer manager must adapt a certain
procedure designed to determine the best option
available to solve certain problems.
Decisions are made at various management levels
(i.e., top, middle. And lower levels) and atvarious
management functions (i.e., planning, organizing,
directing, and controlling). Decision-making,
according to Nickels and others, “is the heart of all
the management functions.
THE DECISION-MAKING PROCESS
Rational decision-making is a process involving the
following steps:

1. Diagnose the problem

2. Analyze the environment
3. Articulate problem or opportunity
4. Develop viable alternative
5. Evaluate alternatives
6. Make a choice
7. Implement decision
8. Evaluate and adapt decision results
Diagnose Problem
If a manager wants to make an intelligent
decision, his first move must be to identify the
problem.

If the manager fails in this aspect, it is almost

impossible to succeed in the subsequent
steps. An expert once said, “identification of
the problem is tantamount to having the
problem half-solved.” 
 Analyze the environment
The objective of environmental analysis is the identification of
constraints, which may be spelled out as either internal
or external limitations.

Examples of internal limitations are as follows:

1. Limited funds available for the purchase of equipment

2.Limited training on the part of employees
3. Ill-designed facilities

Examples of external limitations are as follows:

1. Patents are controlled by other organizations
2. A very limited market for the company’s product and services
exists.
3. Strict enforcement of local zoning regulations.
Analyze the environment
When decisions are to be made, the internal and
external limitations must be considered. It maybe
costly, later on, to alter a decision because of a
constraint that has not been previouslyidentified.

Components of the Environment.

The environment consists of two major concerns:
1. Internal
2. External
Analyze the environment
Analyze the environment
Develop Viable Alternatives
Oftentimes, Problems may be solved by any of the
solutions offered. The best among the alternative
solutions must be considered by the
management. This is made possible by using a
procedure with the following steps:

1. Prepare a list of alternative solutions

2. Determine the viability of each solutions
3. Revise the list by striking out those which are
not viable
 Develop Viable Alternatives
To illustrate: 
An engineering firm has a problem of increasing its
output by 30%. This is the result of new agreement
between the firm and one of its clients. The list of
solutions prepared by the engineering manager shows
the following alternative courses of action:
1. Improve the capacity of the firm by hiring more
workers and building additional facilities;
2. Secure the services of subcontractors
3. Buy the needed additional output from another firm
4. Stop serving some of the company’s customers
5. Delay servicing some clients
Evaluate Alternatives
After determining the viability of the alternatives
and a revised list has been made, an evaluationof
the remaining alternatives is necessary. This is
important because the next step involvesmaking a
choice. Proper evaluation makes choosing the
right solution less difficult.

How the alternatives will be evaluated will depend

on the nature of the problem, the objectives of the
firm, and the nature of alternatives presented,
“each alternative must be analyzed and evaluated
in terms of its value, cost, and risk characteristics.”
Evaluate Alternatives
Make a Choice
Choice-making refers to the process of selecting
among alternatives representing potential solutions
to a problem. At this point, particular effort should
be made to identify all significant consequences of
each choice.
After the alternatives have been evaluated, the
decision-maker must now be ready to make a choice.
This is the point where he must be convinced that all
the previous steps were correctly undertaken.
To make the selection process easier, the alternatives
can be ranked from the best to worst on the basis of
some factors like benefit, cost, or risk.
Implement decision
Implementation refers to carrying out the
decision so that they objectives sought will be
achieved. To make implementation effective, a
plan must be devised.

At this stage, the resources must be made

available so that the decision may be properly
implemented. Those who will be involved in
implementation, must understand and accept
the solution.
Evaluate and Adapt Decision Results
In implementing the decision, the results expected may or
may not happen. It is therefore, important for the
manager to use control and feedback mechanisms to
ensure results and to provide information for future
decisions.(Feedback refers to the process which requires
checking at each stage of the process to assure that the
alternatives generated, Control refers to actions made to
ensure that activities performed match the desired
activities or goals that have been set.

In this last stage of the decision-making process, the

engineer manager will find out whether or not the desired
result is achieved. If the desired result is achieved, one
may assume that thedecision made was good. If it was not
achieved, Ferrell further analysis is necessary.