PRESENTATION

on

Decision Making
at
WAPDA Engineering
Academy
Faisalabad

Prepared by:
Muhammad Khalid Mumtaz
APS, WAPDA, Mangla
2
 Learning Objectives

• What is Decision Making

• Who Makes Decisions in Organizations
• What is Decision Making Process
• What are Decision Making Models
 What is Decision Making
• Decision making is the process of
making choices by identifying a
decision, gathering information and
assessing alternative resolutions.

In simple words we can define it as

• A choice from two or more alternatives
 Types of Decisions
Programmed Decision –
A simple, routine matter for which a
Manager has an established decision rule

Non-programmed Decision –
A new, complex decision that requires a
creative solution.
Who Makes Decisions
• Top Managers
– Responsible for making decisions about the direction of the
organization and establishing policies and philosophies that
effect all organizational members .
– Examples; President, Chief Executive Officer, Chief Operating
Officer, Vice-President
• Middle Managers ( btw the lowest and top levels)
– Manage the activities of other managers and non managerial
employees and translating the goals set by top managers to
specific details that First Line Managers can understand.
– Examples; Sr. Managers, Managers, Deputy Managers
• First-line Managers
– Responsible for directing the day to day activities of non-
managerial employees
– Examples; Assistant Managers, Supervisors.
 Decision Making Process
• Identification of a problem
• Identification of Decision Criteria
• Allocation of weights to Criteria
• Development of Alternatives
• Analysis of Alternatives
• Selection of an Alternative
• Implementation of the Alternative
• Evaluation of the Decision Effectiveness
 Step 1: Identify the decision

• We realize that we need to make a decision.

• Try to clearly define the nature of the decision
that needs to be taken.
• This first step is very important.
 Step 2:
Gather relevant information
• Collect some pertinent information before making a
decision:
• what information is needed, the best sources of
information, and how to get it.
• This step involves both internal and external sources.
• Some information is internal: one can get it through
a process of self-assessment.
• Other information is external: find it online, in books,
from other people, and from other sources.
 Step 3:
Identify the alternatives
• As we collect information, we will probably
identify several possible paths of action, or
alternatives.
• One can also use imagination and additional
information to construct new alternatives.
• In this step, one should list all possible and
desirable alternatives.
 Step 4:
Weigh the evidence
• Visualize what it would be like if we carried out each
of the alternatives to the end.
• Evaluate whether the need identified in Step 1 would
be met or resolved through the use of each
alternative.
• As we go through this difficult internal process, we’ll
begin to favour certain alternatives: those that seem
to have a higher potential for reaching our goal.
• Finally, place the alternatives in a priority order, based
upon your own value system.
 Step 5:
Choose among alternatives
• Once we have weighed all the evidence, we
are ready to select the alternative that seems
to be the best one.
• We may even choose a combination of
alternatives.
• Our choice in Step 5 may very likely be the
same or similar to the alternative we placed at
the top of list at the end of Step 4.
 Step 6: Take action
• We are now ready to take some positive
action by beginning to implement the
alternative we selected in Step 5.
 Step 7:
Review your decision & its consequences

• In this final step, consider the results of the

decision and evaluate whether or not it has
resolved the need, identified in Step 1.
• If the decision has not met the identified
need, we may want to repeat certain steps
of the process to make a new decision.
• For example, we might want to gather
more detailed and different information or
explore additional alternatives.
 Models of Decision-Making
Effective decision

a timely decision
that meets a desired objective and is acceptable
Rational Modelto
those individuals affected
by it Bounded Rationality
Model

Garbage Can Model

 Rationality - a logical,
step-by-step approach
Rational Model to decision making, with a
thorough analysis of
alternatives and their
consequences

1. The outcome will be completely rational

2. The decision maker uses a consistent system
of preferences to choose the best
alternative
3. The decision maker is aware of all alternatives
4. The decision maker can calculate the
probability of success for each alternative
 Bounded Rationality - a
Bounded Rationality theory that suggests that
there are limits upon how
Model rational a decision maker
can actually be

1. Managers suggest the first satisfactory alternative

2. Managers recognize that their conception of the world is
simple
3. Managers are comfortable in making decisions without
determining all the alternatives
4. Managers make decisions by rules of thumb or heuristics
 Garbage Can Model
Solutions

Problems Choice
Garbage Can Model - opportunities

a theory that contends Participants

that decisions in
organizations are
random and unsystematic
 Participative Decision Making
• Organizational Foundations
– Participative, supportive organizational culture
– Team-oriented work design
• Individual Pre-requisites
– Capability to become psychologically involved
in participative activities
– Motivation to act autonomously
– Capacity to see the relevance of participation
so that brainstorming is meaningful.
Thank You

24