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decision making, project management in decision making, project management decisions
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Page 1
Decision Making An essence to problem solving
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Decision Making
• “ the process of responding to a problem by searching and selecting a solution or course of action”.
• There are basically two kinds of decision that are called upon to make:
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Types of Problems and Decisions• Structured problems
* Involve clear goals.*Are familiar (have occurred
before)*Are easily and completely
defined- information about the problem is available and complete.
• Programmed decision *A repetitive decision the can be handled by a
routine approach.
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• 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* Decision that are unique and non-recurring.* Decision that generate unique responses.
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Vitals of Decision making process
• Policy• a general guideline for making a decision about a
problem.• Procedure
* A series of interrelated steps that decision maker can use to respond ( applying a policy) to a problem.
• Rule* an explicit statement that limits what can or cannot be done.
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The Decision-Making Process
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.
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Decision Making Process
• Identifying Problem• Identifying Decision Criteria• Allocating Weights to the Criteria• Developing Alternatives• Analyzing Alternatives• Select Alternatives.• Implement Alternatives.• Evaluating decision’s effectiveness.
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Step 1: Identifying the Problem
* A problem becomes a problem when someone becomes aware of it.* there is always a pressure to solve the problem.* the person must have the authority, information, or resources needed to solve the problem.
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Step 2: Identify the Decision Criteria
• Decision criteria are factors that are important ( relevant) to resolving the problem.* Costs that will be incurred (investment required).* Risks likely to be encountered ( chance of failure).* Outcomes that are desired ( growth of the firm).
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Step 3: Allocating Weights to the Criteria
• Decision criteria is of equal importance:* Assigning a weight to each item.* Places the items in the correct priority order of their importance in the decision making process.
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Step 4: Developing Alternatives
• Identifying viable alternatives.* Alternatives are listed ( without evaluation) that can resolve the problem.
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Step 5 :Analyzing alternatives
• Appraising each alternative’s strengths and weaknesses* An alternative’s appraisal is based on its ability to resolve the issues identified
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Step 6: Selecting the alternative
• Choosing the best alternative
* The alternative with the highest total weight is chosen.
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Step 7: Implementing the Alternative
• Putting the decision to and gaining comment from those whose will carry out the decision.
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Step 8: Evaluating the decision’s 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 resolve, what went wrong?
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Intuition
* It is making decisions on the basis of experience, feelings, and accumulated judgment.
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Decision Making Conditions
• Certainty* A situation in which someone can make an accurate decision because the outcome of every alternative choice is known.
• Risk* A situation in which the someone is able to estimate the likelihood (probability) of outcomes that result from the choice of particular alternatives.
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• Uncertainty* limited information prevents estimation of outcome probabilities for alternatives associated with the problem and may force to rely on intuition, hunches, and “gut feelings”. # Maximax: The optimistic person’s choice to maximize the maximum outcome. # Maximin: The pessimistic person’s choice to maximize the minimum outcome.
# Minimax: The choice to minimize maximum regret.
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Types of Decision Makers
* Directive # Use minimal information and consider few alternatives.* Analytic # Make careful decisions in unique situations.* Conceptual # Maintain a broad outlook and consider many alternatives in making decisions.* Behavioral # Avoid conflict by working well with others and being receptive to suggestions.
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Scanning the situation—identifying a signal that a decision should be made.
Classify the decision as routine, apply the appropriate decision rule; as non-programmed, begin comprehensive problem solving.
Monitor and follow-up as necessary.
Rational (Logical) Decision Model Steps
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Trends in Decision Making
– The pace of decision making is accelerating: more decisions to make and have less time to make them.
• Complex streams of decisions• Sources of decision complexity• Perceptual and behavioral decision traps
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– Multiple criteria to be satisfied by a decision.– Intangibles that often determine decision
alternatives.– Risk and uncertainty about decision alternatives.– Long-term implications of the effects of the
choice of a particular alternative.– Interdisciplinary input increases the number of
persons to be consulted before a decision is made.
Dealing with Complex Streams of Decisions
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– Pooled decision making increases the number of persons playing a part in the decision process.
– Value judgments by differing participants in the process create disagreement over whether a decision is right or wrong, good or bad, and ethical or unethical.
– Unintended consequences occur because the results of purposeful actions cannot always be predicted.
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Guidelines for effectivedecision making
Categorical interpretation- the problem should be defined properly.
Application of limiting factor- limiting factor should be taken into account in order to analyze
Adequate information- more quantity of reliable information leads to effective decision making.
Considering other views- various views at the same point are taken into account for quality decision.
Timeliness- decision should be ,made at proper time to meet the competitive advantages.
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Techniques improving decision making
Brainstorming – idea generation for decision making.
Nominal group technique (NGT)- problem outlined, presentation of solution in written form, discussion over written solutions, and final decision.
Delphi technique- decision made on the basis of questionnaire filled by the respondents.
Consensus mapping- decision made on the basis of the report presented by the representative of each group after
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