ASSIGNMENT

BY: HARIS MASHOOD L1F10MBBF2016

Principles of Management

Managers as Decision Makers

CHAPTER-3

Decision
Making a choice from two or more alternatives.

Why Decision-making

Decision Making
Administrative process based on decision making , decision making is based on choice whereas choice is based on alternatives.
Administrative process Decision Making Choice

Best Alternatives

The Decision-Making Process

 Identifying a problem.  Identification of Decision Criteria.  Allocating weights to the criteria.  Developing alternatives.  Analyzing the alternatives, that can resolve the problem.  Selecting from alternatives.  Implementing the selected alternative.  Evaluating the decisions effectiveness.

The Decision Making Process

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Step 1: Identifying the Problem

Problem
A discrepancy between an existing and desired state of affairs.

The decision making process begins by determining that a problem exists: that is, there is an unsatisfactory condition. This is frequently expressed as a disparity between what is and what should be. Whether a decision is necessary or not depends on the administrators perception. What one person sees as a problem another may see as perfectly acceptable state of affairs. So, the decision process begins with administrators recognition that there is a gap between what is desired and what actually is. e.g. Purchase a new Laptop

Step 2: Identifying Decision Criteria Decision Criteria

Criteria that define what's important or relevant in resolving problem.
Costs that will be incurred (investments required) Risks likely to be encountered (chance of failure) Outcomes that are desired (growth of the firm)

Important Criteria
Criterion
Carrying Weight Warranty Battery life Display Quality Memory and Storage

Step 3: Allocating Weights to the Criteria

Assigning a weight to each item places the items in the correct priority order of their importance in the decision making process.(110)

Weights for Laptop (1-10)

Criterion
Memory and Storage Battery life Carrying Weight Warranty Display Quality

Weight
10 8 6 4 3

Step 4: Developing Alternatives

Identifying viable alternatives
 Alternatives are listed (without evaluation) that can resolve the problem.

Toshiba protg s100 Dell inspiron 700m HP Pavilion zd8000 Apple iBook Soney vaio VGN-FS790 Gateway NX850X Toshiba QomioG15-AV501 Lenovo ThinkPad R52

Step 5: Analyzing Alternatives

Appraising each alternatives strengths and weaknesses
 An alternatives appraisal is based on its ability to resolve the issues identified in steps 2 and 3.

Assessed Values of Laptop Computers Using Decision Criteria

Step 6: Selecting an Alternative

Choosing the best alternative
 The alternative with the highest total weight is chosen.

The final step in decision making process takes place when all the alternatives have been enumerated and evaluated against the decision criteria. This final step is the selection of the best alternative which has quantitatively been determined.

Evaluation of Laptop Alternatives Against Weighted Criteria

Step 7: Implementing the Alternative

Putting the chosen alternative into action.
 Conveying the decision to and gaining commitment from those who will carry out the decision.

Step 8: Evaluating the Decisions Effectiveness

The soundness of the decision is judged by its outcomes.
 How effectively was the problem resolved by outcomes resulting from the chosen alternatives?  If the problem was not resolved, what went wrong?