Decision Making Process for Organizational Goals

Decision Making

Definition

Decision making is the process of selecting a course of action from multiple alternatives to achieve organizational goals.

Types of Decisions

• Programmed Decisions: Routine, repetitive, and well-structured decisions that can be handled by standard procedures.
• Non-Programmed Decisions: Unique, complex, and unstructured decisions that require creative problem-solving.

Decision-Making Process

1. Problem Identification: Recognize a problem or opportunity that requires a decision.
2. Information Gathering: Collect relevant data and information to inform the decision.
3. Alternative Generation: Develop a range of possible solutions or alternatives.
4. Alternative Evaluation: Evaluate the pros and cons of each alternative.
5. Choice: Select the best alternative.
6. Implementation: Put the chosen alternative into action.
7. Review and Feedback: Monitor and evaluate the outcome of the decision.

Decision-Making Models

• Rational Model: A systematic, step-by-step approach to decision making, based on objective analysis and evaluation of alternatives.
• Behavioral Model: A more realistic approach that recognizes the limitations and biases of human decision makers.
• Participative Model: Involves multiple stakeholders in the decision-making process to increase commitment and ownership.

Decision-Making Biases

• Confirmation Bias: The tendency to seek out information that confirms existing beliefs.
• Anchoring Bias: The tendency to rely too heavily on the first piece of information encountered.
• Availability Heuristic: The tendency to overestimate the importance of information that is readily available.

Effective Decision Making

• Clearly Define the Problem: Ensure a thorough understanding of the issue to be addressed.
• Gather Relevant Information: Collect accurate and unbiased data to inform the decision.
• Evaluate Alternatives Objectively: Avoid biases and consider multiple perspectives.
• Consider Long-Term Consequences: Think beyond immediate needs and consider the long-term implications of the decision.

Decision Making

Definition

• Decision making is the process of selecting a course of action from multiple alternatives to achieve organizational goals.

Types of Decisions

• Programmed Decisions: routine, repetitive, and well-structured decisions handled by standard procedures.
• Non-Programmed Decisions: unique, complex, and unstructured decisions requiring creative problem-solving.

Decision-Making Process

• Problem Identification: recognize a problem or opportunity requiring a decision.
• Information Gathering: collect relevant data to inform the decision.
• Alternative Generation: develop a range of possible solutions.
• Alternative Evaluation: evaluate pros and cons of each alternative.
• Choice: select the best alternative.
• Implementation: put the chosen alternative into action.
• Review and Feedback: monitor and evaluate the outcome.

Decision-Making Models

• Rational Model: systematic, step-by-step approach to decision making based on objective analysis.
• Behavioral Model: recognizes limitations and biases of human decision makers.
• Participative Model: involves multiple stakeholders to increase commitment and ownership.

Decision-Making Biases

• Confirmation Bias: tendency to seek out information confirming existing beliefs.
• Anchoring Bias: tendency to rely too heavily on the first piece of information.
• Availability Heuristic: tendency to overestimate importance of readily available information.

Effective Decision Making

• Clearly Define the Problem: ensure thorough understanding of the issue.
• Gather Relevant Information: collect accurate and unbiased data.
• Evaluate Alternatives Objectively: avoid biases, consider multiple perspectives.
• Consider Long-Term Consequences: think beyond immediate needs, consider long-term implications.