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BY
SIYACHI IYER
A process by which a course of action is selected as the way to deal with a specific problem. or
The process of responding to a problem by searching for and selecting a solution or course of action that will create value for organizational stakeholders.
Problem solving and decision making are Inter-related. Problem-solving provides the basis for decision-making.
Decision-making is done at all levels and precedes every managerial function.
Managers must engage in problem-finding process.
Both problems and opportunities require decision-making.
There are basically two kinds of decision that managers called upon to make:
1- Programmed decision A repetitive decision the can be handled by a
routine approach. 2- Non-programmed decisions Decision that are unique and nonrecurring. Decision that generate unique responses.
Structured problems: Involved goals that clear. Are familiar(have occurred before) Are easily and completely defined-
information about the problem is available and complete.
Unstructured problems: Problems that are new or unusual and for
which information is ambiguous or incomplete.
Problems that will require custom-made solutions.
Charecteristics Programmed decisions
Non programmed decisions
Types of problems Structured Unstructured
Managerial level Lower level Upper level
Frequency repetitive new
Information Readily available Ambiguous or incomplete
Time frame for solution
short Relatively long
Solution relies on Procedures, rules & polices
Judgment & creativity.
Define the problem
Evaluate alternatives
Implement the chosen alternative
Gather facts and develop alternatives
Select the best alternative
Follow up and evaluate the chosen alternative
Identify a problem and decision criteria and allocating weights to the criteria.
Developing, analyzing, and selecting an alternative that can resolve the problem.
Implemented and selected alternatives.
Evaluating the decision’s effectiveness.
features certainty risk uncertainty
1.Availability of information about future
Complete information is available
Information is available but may be incomplete
No information is available
2. Degree of reliability of information
high moderate low
3.Degree of predictability about future
high moderate low
4.Knowledge of probability of outcomes of decisions
known fairly known Not known
Dimensions of decision-making styles Ways of thinking Rational , orderly, and consistent. Intuitive, creative, and unique.
Tolerance of ambiguity Low tolerance: require consistency and
order. High tolerance: multiple thoughts
simultaneously
It focuses on what is important
It is logical and consistent.
It acknowledges both subjective and objective thinking and blends analytical with intuitive thinking.
It requires only as much information and analysis as is necessary to resolve a particular dilemma.
It encourages and guides the gathering of relevant information and informed opinion.
It is straight forward, reliable, easy to use, and flexible.
THANK YOU