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Decision Making & Problem Solving

The document discusses various aspects of decision making and problem solving. It describes different types of decisions as programmed or unprogrammed. The decision making process involves recognizing the problem, identifying objectives, gathering data, evaluating alternatives, selecting an action, implementing it, and following up. Models of decision making discussed include the rational model, bounded rationality model, and garbage can model. Problem solving involves categorizing problems, gathering opinions, focusing on controllable elements, generating solutions, and evaluating decisions.

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20 views

Decision Making & Problem Solving

The document discusses various aspects of decision making and problem solving. It describes different types of decisions as programmed or unprogrammed. The decision making process involves recognizing the problem, identifying objectives, gathering data, evaluating alternatives, selecting an action, implementing it, and following up. Models of decision making discussed include the rational model, bounded rationality model, and garbage can model. Problem solving involves categorizing problems, gathering opinions, focusing on controllable elements, generating solutions, and evaluating decisions.

Uploaded by

waleed_dar
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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DECISION MAKING

&
PROBLEM SOLVING
TYPES OF DECISION:

• People can face situations which require different forms of


decisions to be made:
• Routine matters for which you have an established rule are called
“PROGRAMMED DECISIONS”
• Decisions that require creative solutions are called
“UNPROGRAMMED DECISONS”.
THE DECISION MAKING PROCESS:

• The process of decision making involves a series of steps:


• RECOGNITOION OF THE PROBLEM
• IDENTIFY THE OBJECTIVE OF THE PROBLEM
• GATHER & EVALUATE DATA & DIAGNOSE THE SITUATION
• LIST & EVALUATE ALTERNATIVES
• SELECT THE BEST COURSE OF ACTION
• IMPLEMENT THE DECISION
• GATHER FEEDBACK
• FOLLOW UP
• Decision making can be stressful. At times you take decisions
with significant risk & uncertainty, & often without full
information.
• Sometimes you have to trust or rely on others for making
decision, but the responsibility is ultimately yours.
• There are situations that require painful decisions to be made.
MODELS OF DECISION MAKING:

• Rational model:
• This model has the following assumptions:
• The outcome will be completely rational
• The decision maker has a consistent system of preferences, which is used to
choose the best alternative
• The decision maker is aware of all the possible alternatives
• The decision maker can calculate the probability of success for each
alternative.
• According to the rational model, the decision maker will strive
to optimize, that is, to select the best possible alternative.
BOUNDED RATIONALITY MODEL:

• According to Herbert Simon, there are limits on how rational a


decision maker can actually be. His theory rests on the idea
that there are constraints that force a person to be less than
completely rational.
ASSUMPTIONS OF THE MODEL:

• Managers select the first alternative that is satisfactory


• Managers recognize that their conception of the world is
simple.
• Managers are comfortable making decisions without
determining all the alternatives
• Managers make decisions by rules of thumb, or heuristics.
• Heuristics are short cuts which have been developed to save
mental energy. They are rule of thumb that allow a person to
make decisions based on what has worked in the past.
• One of the reasons why a person faces limits to the rationality
is that he must make decisions under risk & time pressure.
• The situation can be highly uncertain, with possibility of
success unknown.
GARBAGE CAN MODEL:

• According to the model, the decisions are random &


unsystematic.
• According to this model, the organization is like a garbage can
in which problems, solutions, participant & choices are
floating around randomly.
• If these 4 factors happen to connect, a decision is made.
DECISION MAKING & RISK:

• People differ in their willingness to take risk.


• Risk aversion: people who experience this choose options that entail
fewer risks, preferring familiarity & certainty.
• Risk takers: accept greater potential for loss in decisions, tolerate greater
uncertainty, & are more likely to make risky decisions.
PROBLEM SOLVING:

• The first step in problem solving is to categorize your


problem.

• Categorizing problems help you see their nature, in terms of


seriousness & how long it will take to solve them.
TYPES OF PROBLEMS:

• Factual: factual problems have answers that are right


or wrong. And you have to find the right answer.
• Operational: these problems are related to the
systems, work processes, & technology.
• Tactical: these problems are often knotty, & require a
great deal of analysis.
• Strategic: these involve decisions of the highest order.
They are about organization’s broadest goals.
• People: people problems are often easy & quick to
solve.
SUPERFICIAL SOLUTIONS ARE
NO SOLUTIONS:
• Any problem is usually a symptom of something deeper. And
a quick fix may not address the real situation.
• Superficial solutions barely address a problem, therefore the
problem is bound to recur.
PUT THE PROBLEM IN QUESTION
FORM:
• Putting problems in question form can help you get beyond the
symptoms your are faced with.
• It also helps you in establishing a cause & effect relationship
between the situation & its reasons.
GATHER OPINIONS:

• Gather information from those who understand the


situation best. Or who are the closest to the problem.
• Asking them about the root cause of the problem can
provide you with helpful information.
• Also talk to people who are remotely connected with
the situation--- people in other parts of the
organization, or outside the organization
FOCUS ON ELEMENTS YOU CAN
CONTROL:
• When defining the decision to be made, take stock of its
elements & focus on those you can control.
• For e.g. if you are having trouble in selling a product, you can
control its price, & marketing methods. But you can’t control
people’s reaction to the product or their taste & preference.
GENERATING POTENTIAL
SOLUTIONS:
• The following things should be kept in mind while generating
solutions to the problem
• Your strengths & weaknesses

• The resources you have (money, time, people, technology)


BRAINSTORM:

• Its one of the most common methods for generating


alternatives.
• Studies have shown that groups come up with better
solutions than if you work alone.
• You have to follow certain guidelines while
brainstorming:
• Forbid critical comments
• Set a time limit
• Invite people from different fields
• Analyze afterwards
EVALUATE DECISIONS:

• Listen to your intuition: you know things that haven’t reached


your conscious mind. Your brain picks up evidence & signals
from a variety of sources & wants you to be aware of its
knowledge & conclusions.
• List the pros & cons
• Set & weigh criteria

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