Ch. 4 Decision Making Flashcards
Decision-Making Process
- Logical, stepwise approach that is used to make a choice between options, to solve a problem, or to resolve a dilemma
- Decisions usually made at the time they are needed
Contingency Planning
Making a decision in advance (in anticipation of need, e.g. disaster plan) so it can be implemented in a timely manner
Steps in the decision-making process
- Problem Identification
- Establishment of decision-making criteria
- Weighting of the criteria
- Identifying alternatives
- Analyzing alternatives
- Making the decision
- Implementing the decision
- Evaluating the outcome
Problem Identification
- Finding a problem and acknowledging it exists
- Urgency - a manager must feel the need to deal with it
- Resources must be sufficient to solve the problem (if the resources are inadequate, there is no decision to be made)
Problem
- The difference between what is and what should be
- May be negative or positive
Establishment of Decision-Making Criteria
Determining which factors will have the most relevance in solving the problem
- All significant criteria should be listed (e.g. price of the item required, regulations, expert opinion)
- Insignificant criteria should be eliminated (e.g. color of the packing material)
Weighting of the criteria
Assigning each criteria a weight (usually from 1-10) based on the importance of that criteria
- More important factors carry a heavier weight than the less important factors
- All relevant factors should be assigned a weight
- Helps quantify decision-making process
Identifying alternatives
Creating a list of different ways to solve the problem (different options available)
- Multiple alternatives should be listed (could be a tangible items, menus, work processes, staffing)
Analyzing alternatives
Each alternative should be measured against the same standards, using the relevant criteria that have been established
- Measurement should be done using objective evidence
Making the decision
Choosing which of the alternatives will best solve the problem, based on the analysis of alternatives that was done (easier if the choices are limited than if there are a wide range of options)
Implementing the decision
Act of carrying out the decision that has been made
- If the implementation is multi-faceted, this step will take planning and organizing
- Communication with staff is essential
- Implementation will determine how the change is viewed
Evaluating the outcome
Receiving feedback about the decision: was it effective, efficient, appropriate, adequate?
Types of Decisions
- Programmed decisions
- Programmable decisions
- Non-programmed decisions
Programmed decisions
- Made routinely, relying on precedent, (information can be applied from previous similar situations)
- Frequently used with structured problems (routine and predictable, e.g. purchasing office supplies)
- Frontline managers tend to make mostly programmed decisions
Programmable decisions
Decisions of the routine type which may become programed decisions in the future
- The organization is in a “start-up” mode so there is no precedent
- The manager is new to the job and has not made such decisions in the past