Unit # 4

Decision Making Process

Instructor Name
Dr. Asrar Ahmed
Problem

 Problems a perceived discrepancy between the current state of affairs and some desired
state, i.e.
 What is and what should be?
 e.g. Job on daily wage ⇒ current state of affairs; Regular job ⇒ desired state.
Decision

 “A decision can be defined as a course of action consciously chosen from two or more
possible alternatives”.
 • S.P. Robbins defines decision as “choices made among from two or more alternatives
developed from data”.
DECISION MAKING PROCESS

1.Identification of Problem
2. Identification of Decision Criteria
3. Allocation of Weights to Criteria
4. Development of Alternatives
5. Evaluation of Alternatives
6. Finalizing the Decision
Step 1 IDENTIFICATION OF PROBLEM

 Problem doesn’t come flashing “ I am the problem, pick me up.” It is something which
happens suddenly, and it is something which really needs your time to identify it. Without
identifying the problem you will never be able to reach the right decision.
 • The problem is mostly subjective in nature, i.e. one person looks into it as a problem, on
the other side, other people don’t find it as a problem.
 • If you don’t identify the right problem, you are in a deep problem.
A PRACTICAL DECISION MAKING
PROBLEM
 Haroon wants to leave his private banking job and shift to another job.
 Haroon is single, 26 years old, completed his MS Finance, and joined as a Customer
Relation Officer in the bank 2 years ago.
 The problem is defined as:
 Job is boring
 No interest.
 Joined due to family pressure.
Step 2 IDENTIFICATION OF DECISION
CRITERIA
 • Job Security
 • Interest in job
 • Salary hike
 • No Reallocation (He doesn’t want to leave his city).
 • He wants to change his profile
Step 3 ALLOCATION OF WEIGHTS TO
CRITERIA
 Criteria Weights
 Job Security 10
 Interest in job 8
 Salary Hike 9
 No Reallocation 6
 Change in Profile 7
 Step 4 DEVELOPMENT OF
ALTERNATIVES
 Once you have identified the problem, you have also looked into the criteria and allocated the weights, now
you have to look into the alternatives.
• Applying through portal
• Finding reference through friends
• Three job offers in hand:
(a) One as a business associate in a consulting firm.
(b) One as a faculty to a university
(c) One as a manager to a 4 star hotel.
Step 5 EVALUATION OF ALTERNATIVES
Step 6 FINALIZING DECISION

 What should be Haroon’s choice?

 As Haroon has family pressure he should go for "Business associate in a consulting firm”
as he will get
 1. job security
 2. salary hike
 3. reallocation
Thus, Haroon has to choose for a business associate in a consulting firm, just because he had
given highest weight to job security and then salary hike which is carried in by first option Job.
This decision is based on rationality as job security is more important for him and he is getting
high salary
Class Activity

How do I decide for myself in a certain circumstance?

By utilize the decision-making processes Steps.