Learning Ojectives

• learn what is decision and decision stages .

• Distinguish between DM and Problem Solving

• Difference between Programmed and non programmed decision .

• List Six C’S Rule

• Explain Decision Making Process

• The13 steps before making effective decisions

• Summery

Decision Making

• Managers & Decision Makers

• To be a good Manger , You Must be a good Decision Maker.

• Herbert Siomon , a Nobel Prize winner , has described the Manger’s Decision Process into three stages

a) Intelligence b) Design and c) Choice

• Different between Decision Making and Problem Solving

• Programmed versus None Programmed Decision

Decision Making

Six C's of Decision Making

1. Construct. 2. Compile. 3. Collect. 4. Compare. 5. Consider. 6. Commit.

Construct a clear picture of precisely what must be decided.

Compile a list of requirements that must be met.

Collect information on alternatives that meet the requirements.

Six C's of Decision Making

Compare alternatives that meet the requirements.

Consider the "what might go wrong" factor with each alternative.

Commit to a decision and follow through with it.

Six C's of Decision Making

6

Six Steps in the Managerial Decision-Making Process

Evaluationand

Feedback

DetermineRequirements

Define the Problem

Establish GoalsIdentify Alternatives

Select Decision

Making ToolDecision-Making

Process

Decision Making Process

Step1 : Define The Problem

The Goal is to express the issue in a clear problem statement that describes both the initial conditions and the desired conditions .

Step 2 : Determine Requirements

Requirements are conditions that any acceptable solution to the problem must meet .

Step 3 : Establish Goals

Goals Go beyond the minimum essential must have ( Requirements )

to Wants and Desires .

Step 4 : Identify Alternatives

Alternatives offer different approaches for changing the initial condition into the desired condition

Decision Making Process

Step 5 : Select a decision making tool

There are several tools for selecting a decision , Please see below

• Pros and Cons Analysis• Kepner-Tregoe Decision Analysis (K-T)• Analytic Hierarchy Process (AHP)• Multi-Attribute Utility Theory Analysis (MAUT)• Cost Benefit Analysis (CBA)• Custom Tailored Tools

5.1 Pros and Cons Analysis

Pros and Cons Analysis is a qualitative comparison method in which good things (pros) and bad things (cons) are identified about each alternative. Lists of the pros and cons, based on the input of subject matter experts, are compared one to another for each alternative.

5.2 Kepner-Tregoe (K-T) Decision Analysis

K-T is a quantitative comparison method in which a team of experts numerically score criteria and alternatives based on individual judgments/assessments. The size of the team needed tends to be inversely proportional to the quality of the data available – the more intangible and qualitative the data, the greater the number of people that should be involved.

5.3 Analytic Hierarchy Process (AHP)

AHP is a quantitative comparison method used to select a preferred alternative by using pair-wise comparisons of the alternatives based on their relative performance against the criteria.

The basis of this technique is that humans are more capable of making relative judgments than absolute judgments.

5.4 Multi-Attribute Utility Theory (MAUT)

MAUT is a quantitative comparison method usedto combine dissimilar measures of costs, risks, andbenefits, along with individual and stakeholderpreferences, into high-level, aggregated preferences.The foundation of MAUT is the use of utilityfunctions.

5.5 Cost-Benefit Analysis

Cost-Benefit Analysis is “a systematic quantitative method of assessing the desirability of government projects or policies when it is important to take a long view of future effects and a broad view of possible side effects.” CBA is a good approach when the primarybasis for making decisions is the monetaryCost vs. monetary benefit of the alternatives.

5.6 Custom Tailored Tools

Customized tools may be needed to help understand complex behavior within a system. Very complex methods can be used to give straightforward results.

Step 6 : Evaluation and Feed Back

• the solution should be checked to ensure that it truly solves the problem identified.

• Compare the original problem statement to the goals and requirements.

• A final solution should fulfill the desired state, meet requirements, And best achieve the goals within the values of the decision makers.

• Once the preferred alternative has been validated, the decision-making support staff can present it as a recommendation to the decision-maker(s).

• A final report to the decision maker(s) must be written documenting the decision process, recommending the final solution.

Decision Levels

Three levels of decision have been identified:

1. Strategic.

Strategic decisions are the highest level. Here a decision concerns general direction, long term goals, philosophies and values .

2. Tactical.

Tactical decisions support strategic decisions. They tend to be medium range, medium significance, with moderate consequences.

3. Operational.

These are every day decisions, used to support tactical decisions. They are often made with little thought and are structured. Their impact is immediate, short term, short range, and usually low cost.

The following 13 tips are designed to help you make powerful and effective decisions.

1) There is no right or wrong when you are making a decision.

2) Never make a snap decision about anything.

3) Make written notes when you are making a decision - perform a SWOT analysis if you have to.

4) Avoid allowing your decisions to stack up.

5) If your decision is going to affect other people then talk to them.

6) When you've made a decision, stick to it.

7) When you have made your decision, and before you take any action on it, think about what will happen if you take this course of action .

8) When you have made a decision, commit yourself to it 100% and don't let the what if's bother you.

9) Visualize the outcome of your decision .

10) Believe in yourself

11) Before you make any decision, review the facts that you have relating to the decision.

12) Base your decisions on what feels right to you

13) Look at the objective of the decision.

These 13 steps will help you to make more effective decisions. Every day you are faced with decisions from small ones, such as what to eat for breakfast, to larger ones. Making effective decisions will help you to enjoy life more.

Related Quotes

“Be sure you are right -- then go ahead.” Davy Crocket.

“Doing what's right isn't hard -- Knowing what's right is.” Lyndon B. Johnson.

Summary

• The goal of this presentation to help decision-makers and their decision support staffs choose and document the best alternative in a clear and transparent fashion.

• The decision-making Process described in this presentation are readily applicable to a wide range of decisions

• The 6 c’s Rule and The 13 steps for more effective decisions .