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    INTRODUCTION TO MANAGEMENT Chapter 4

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    INTRODUCTION TO MANAGEMENT Chapter 4

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    32 views9 pages
    INTRODUCTION TO MANAGEMENT chapter 4

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    INTRODUCTION TO MANAGEMENT chapter 4

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    INTRODUCTION TO MANAGEMENT chapter 4

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    32 views9 pages

    INTRODUCTION TO MANAGEMENT Chapter 4

    Uploaded by

    shockerbless
    INTRODUCTION TO MANAGEMENT chapter 4

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    You are on page 1of 9

    Chapter Four

    Managerial
    Decision making
    4.1 meaning of Decision Making

    Decision = choice made from available alternatives


    Decision-making is a conscious choice among the
    given alternatives, followed by action to implement
    a choice.
    There have to be options to choose from; if there are
    not, there is no choice possible and no decision

    Decision making is not easy, b/c it must be done in


    ever-changing factors , unclear information,
    conflicting points of view
    Decision making: the process by which managers
    respond to opportunities and threats by analyzing
    options, and making decisions about goals and
    courses of action.
    6-2 Copyright © 2009 Nelson Education Ltd.
    Decision can be made:
    Decisions in response to
    opportunities
    occurs when managers respond to

    ways to improve organizational


    performance to benefit customers,
    employees, and other stakeholder
    groups
    Decisions in response to threats
    events inside or outside the
    organization are adversely affecting
    7-3
    organizational performance
    4.2 The Process Of Decision Making

    Define the problem.

    Develop potential alternatives.

    Evaluate the alternatives.

    Select the best alternative.

    Implement the decision.

    Establish a control and evaluation system


    6-4 Copyright © 2009 Nelson Education Ltd.
    4.3 Types of Decision Making
    Programmed Decisions:
    Routine, virtually automatic decision
    making that follows established rules or
    guidelines.
    Managers have made the same decision
    many times before
    Little ambiguity involved
    Example: Deciding to reorder office
    supplies.
    Non-programmed Decisions: unusual
    situations that have not been often
    addressed.
    No rules to follow since the decision is
    Decision Making Conditions
    1. Certainty
    • The information is available and is
    considered to be reliable, and we know the
    cause and effect relationships
    • Decisions under certainty are those in
    which the external conditions are identified
    and very predictable; i.e. we are
    reasonably sure what will happen when we
    make a decision.
    • In decision-making under certainty there is
    a little ambiguity and relatively low chance
    6-6
    of making poor/bad decisions
    •
    2. Decision-making under Risk
     In a risk situation, managers may have factual
    information, but it may be incomplete
     A more common decision-making situation is
    under risk.
     There is moderate ambiguity and moderate
    chance of making bad decision.
     tossing a coin, metrology
    Uncertainty
    Under this condition the decision maker does not
    know what all the alternatives are, what the
    probability of each will occur is or what consequence
    each is likely to have.
    This uncertainty comes from the dynamism of
    contemporary organizations and their environment.
    Decision-making under uncertainty is the most
    ambiguous and there is high chance of making poor
    decisions.
     In decision-making under uncertainty, probabilities
    cannot be assigned to surrounding conditions such
    as competition, government regulations,
    technological advances, the overall economy, etc.
     Uncertainty is associated with the consequences of

    6-8
    alternatives, not the alternatives themselves
    Copyright © 2009 Nelson Education Ltd.
    Ex. 4.1 Conditions That Affect the Possibility
    of Decision Failure

    Organizational
    Problem

    Low Possibility of Failure High


    Certainty Risk Uncertainty Ambiguity

    Programmed Nonprogrammed
    Decisions Decisions

    Problem
    Solution
    6-9 Copyright © 2009
    Nelson Education Ltd.

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