Oman College of Management and
Technology
Course 803403 – DMT
Topic 1
Introduction
CS/MIS Department
What is Decision Making?
• Decision making can be regarded as the cognitive
process (mental process) resulting in the selection of a
course of action among several alternative scenarios.
• Every decision
final choice.
making
process
produces
• The output can be an action or an opinion of choice.
a
Decision and Decision Making
• Decision is the choice made from available
alternatives
• Decision Making is the process of identifying
problems and opportunities and resolving
them.
3
Example
Categories of Decision
• Decision making is a reasoning or emotional
process which can be rational or irrational, can be
based on explicit assumptions.
• A rational decision is one that is based on facts or
reason rather than emotions or feelings, but is
also optimal for achieving a goal or solving a
problem.
• An irrational decision that describes thinking and
actions that are, or appear to be, less useful, or
more illogical than other more rational
alternatives.
What is the difference?
• The difference between rational and irrational
decisions is the thought process behind the decision.
• Rational decisions are carefully considered and
negative outcomes are weighed.
• Irrational decisions are made in haste and no
outcomes are considered.
Six Steps in the Managerial Decision-Making Process
Evaluation
and
Feedback
Implementation
of Chosen
Alternative
Recognition of
Decision
Requirement
Diagnosis
Decision-Making and Analysis
Process
of Causes
Selection of
Desired
Alternative
Development of
Alternatives
Diagnosis and Analysis of Causes
• Diagnosis = analyze underlying causal factors
associated with the decision situation
• Managers make a mistake if they jump into
generating alternatives without first exploring
the cause of the problem more deeply
8
Underlying Causes - Kepner /Tregoe
• What is the state of disequilibrium affecting us?
• When did it occur?
• Where did it occur?
• How did it occur?
• To whom did it occur?
• What is the urgency of the problem?
• What is the interconnectedness of events?
• What result came from which activity?
9
Selection of Desired Alternatives
• Risk Propensity = willingness to undertake risk
with the opportunity of gaining an increased
payoff
• Implementation = using managerial,
administrative, and persuasive abilities to
translate the chosen alternative into action
10
Decision Styles
• Differences among people with respect to how
they perceive problems and make decisions
• Not all managers make decisions the same
–
–
–
–
11
Directive style
Analytical style
Conceptual style
Behavioral style
Personal Decision Framework
Situation:
· Programmed/nonprogrammed
· Classical, administrative,
political
· Decision steps
12
Personal Decision Style:
·Directive
·Analytical
·Conceptual
·Behavioral
Decision Choice:
·Best Solution to
Problem
Directive Style
• People who prefer simple, clear-cut solutions
to problems
• Make decisions quickly
• May consider only one or two alternatives
• Efficient and rational
• Prefer rules or procedures
13
Analytical Style
• Complex solutions based on as much data as
they can gather
• Carefully consider alternatives
• Base decision on objective, rational data from
management control systems and other
sources
• Search for best possible decision based on
information available
14
Conceptual Style
• Consider a broad amount of information
• More socially oriented than analytical style
• Like to talk to others about the problem and possible
solutions
• Consider many broad alternatives
• Relay on information from people and systems
• Solve problems creatively
15
Behavioral Style
• Have a deep concern for others as individuals
• Like to talk to people one-on-one
• Understand their feelings about the problem and the
effect of a given decision upon them
• Concerned with the personal development of others
• May make decisions to help others achieve their goals
16
Participation in Decision
Making
Vroom-Jago Model
• Helps gauge the appropriate amount of
participation for subordinates in process
● Leader Participation Styles
Five levels of subordinate participation in decision making
ranging from highly autocratic to highly democratic
17
Participation in Decision
Making
Vroom-Jago
Model
⌦Diagnostic Questions
Decision participation depends on the
responses to seven diagnostic questions about
● the problem
● the required level of decision quality
● the importance of having subordinates commit to
the decision
18
Seven Leader Diagnostic Questions
How significant is the decision?
How important is subordinate commitment?
What is the level of the leader’s expertise?
If the leader were to make the decision alone at what level
would subordinates be committed to the decision?
What level is the subordinate’s support for the team or
organization’s objectives?
What is the member’s level of knowledge or expertise relative to
the problem?
How skilled or committed are group members to working
together?
19
New Decision Approaches
for Turbulent Times
New Decision
Approaches for
Turbulent
Times
20
Decision Making in Today’s
Environment
21
Individual Decision Making
• Rational approach – ideal method for how
managers should make decisions
• Bounded rationality perspective – how
decisions are made under severe time and
resource constraints
22
Steps in the Rational Approach
23
Bounded Rationality Perspective
• There is a limit to how rational managers can
be—time and resource constraints
– Nonprogrammed decisions
• Constraints and Tradeoffs
– Constraints impinge the decision maker
• The Role of Intuition
– Experience and judgment rather than logic
24
Constraints and Tradeoffs
During Nonprogrammed Decision Making
25