Decision Making

Describe how decision making is important to organizational success.

     Effective managers make decisions that reinforce organizational objectives thereby improving performance through better allocation of resources, including people, materials, and capital. In making programmed decisions, which are well defined, a manager may rely on policies, procedures, or rules that lead to predictable results. Unprogrammed decisions depend on individual managers' judgment, experience, and creativity.

Explain the concepts of certainty, risk, and uncertainty in decision making. Then, discuss the Delphi technique for creative problem solving.

     Certainty is a condition of knowing the results of a decision before the decision is made. Risk is the situation of not being certain about the outcome of a decision, but having enough information to sense probabilities. Under conditions of uncertainty, managers have too little information to make an evaluation or to generate probabilities of risk.

Describe decision&-making processes in brainstorming and nominal groups.

     Brainstorming and nominal group techniques help managers search for optimal solutions in situations where few rational models apply. Brainstorming is a group process without leadership or structure; participants enjoy the freedom of exploring solutions to problems without the restrictions of rules or procedures.

     The nominal group technique (NGT) provides a structure to group interaction so that individual suggestions are prominently displayed discussed, and rank&-ordered by voting; the process is repeated until a viable solution gains acceptance by the majority of group members. The Delphi technique is a survey method of polling selected panel members on well&-defined problems. Delphi participants do not come together in personal meetings, and panel members can participate on a global basis with anonymity.

Explain the role of management science techniques for decision making.

     Management science is concerned with quantitative modeling of complex problems and solutions. Management science tools include a broad range of new computer&-based applications that simplify management decision making.

Define and discuss a rational decision&-making process.

     Rational decision making follows an eight&-step process designed to provide managers with a method for unraveling complex problems in a systematic manner. The process begins with uncovering cause&-and&-effect relationships to diagnose a problem and concludes with obtaining feedback on  performance results to make adjustments and to guide future activities.

Explore guidelines for making effective decisions as managers.

     Using information effectively is one way to reduce confusion and improve decisions because it is the quality of timely information that help; managers make good decisions, not the amount of information brought to bear on a problem. Managers can also improve their systems of decision making to achieve greater employee involvement.