CHAPTER 3

DECISION MAKING

Lecturer: Do Huong Giang (PhD)

Email: huonggiang@ftu.edu.vn
Mobile: 0936861192
2 09/24/23
3.1. Decision making concept
3.2. Decision making process
3.3. Types of problems and types of decisions
in management
3.4. Decision making in management functions

3 09/24/23
 Q: When do we need to make
a decision?

4 09/24/23
 3.1. Decision making concept
Decision-making is the process of
analyzing and choosing between two or
more alternatives of action or solution to a
problem.
Q: What is the problem? What is your
problem right now?
5 09/24/23
 Problem?
Problem: The discrepancy between existing and a
desired state of affairs
- For managers:
• Awareness of discrepancy
• Pressure to act
• Sufficient resources to do something
- Warning signals
Deviation from previous achievements
Deviation from the plans

6 09/24/23
 3.2. Decision making process

7 09/24/23
8 09/24/23
9 09/24/23
Exhibit 6–2 Criteria and Weights for Computer Replacement Decision

Criterion Weight
Memory and Storage 10
Battery life 8
Carrying Weight 6
Warranty 4
Display Quality 3

6–10 © 2007 Prentice Hall, Inc. All rights

reserved.
11 09/24/23
12 09/24/23
 Exhibit 6–3 Assessed Values of Laptop Computers Using
Decision Criteria

Weight 10 8 6 4 3

Step 6: Selecting an alternative

Q: How can we chose the best alternative from this table? How can we
calculate them?
14 09/24/23
Exhibit 6–4 Evaluation of Laptop Alternatives Against
Weighted Criteria

Q: If there are 2 options with the highest total score, which one would
you choose?

6–15 © 2007 Prentice Hall, Inc. All rights

reserved.
16 09/24/23
17 09/24/23
Exhibit 6–1
The Decision-Making Process

6–18 © 2007 Prentice Hall, Inc. All rights

reserved.
3.3. Types of Problems and Decisions
Structured Problems
Involve goals that clear.

Are familiar (have occurred before).

Are easily and completely defined—information

about the problem is available and complete.
Programmed Decision
A repetitive decision that can be handled by a
routine approach.

6–19 © 2007 Prentice Hall, Inc. All rights

reserved.
Types of Programmed Decisions
Policy

A general guideline for making a decision about a structured

problem.
Procedure

A series of interrelated steps that a manager can use to respond

(applying a policy) to a structured problem.
Rule

An explicit statement that limits what a manager or employee can

or cannot do.

6–20 © 2007 Prentice Hall, Inc. All rights

reserved.
3.3. Types of Problems and Decisions
Unstructured Problems
Problems that are new or unusual and for which
information is ambiguous or incomplete.
Problems that will require custom-made solutions.

Non-programmed Decisions
Decisions that are unique and nonrecurring.

Decisions that generate unique responses.

6–21 © 2007 Prentice Hall, Inc. All rights

reserved.
Exhibit 6–8 Programmed versus Nonprogrammed Decisions

6–22 © 2007 Prentice Hall, Inc. All rights

reserved.
3.4. Decisions in the Management Functions

6–23 © 2007 Prentice Hall, Inc. All rights

reserved.