FHBM1114 MANAGEMENTTOPIC 5 : INDIVIDUAL & GROUP DECISION MAKING

PRESENTED BY :CHIA WEY JIAN

LEE YU SENGTEY SHU SHAN

WONG CHUN MENG

Meaning of Decision Making :Decision • is a choice made between two or more available

alternatives.

Decision making • is the process of choose the best alternative

for reaching objectives.

Types of DecisionsProgrammed Decisions : • Routine and repetitive• Eg : habit, clerical routine work

Non-programmed Decisions :• Non-routine, unfamiliar circumstances, unique• Eg : judgement, creativity

Decision Making Styles• are differences among people with respect to how they perceive

problems and make decisions

Directive Style• Action-oriented, focus on facts• Efficient and logical• Making fast decision

Analytical Style• Careful, like lots of information and alternative choices• Consider more information• Take longer to make decisions• Able to cope changing situations

Conceptual Style• Rely on intuition and have a long-term perspective• tend to focus on people or social• Very broad out look• Focus on long run• Good at finding creative solutions

Behavioral Style• Most people-oriented• Work well with others• Receptive to suggestions• Prefer verbal to written information• Avoid conflict, concern others

Knowing Your Decision Making Style

•Make adjustments to the situation and results.

•Helps understand yourself.

•Able to influence others by being aware of styles.

• Prove yourself to be a valuable asset as a leader.

Rational Decision Making

•Multi-step process for making choices between alternatives.

• Explains how managers should make decisions.

•Assumes managers will make logical decisions that will be

optimum in furthering the organization’s best interests.

• Four steps associated.

Step 1: Identify the Problem and Opportunity

• Problems or difficulties that inhibit the achievement of goals.

•Opportunities: situation that present possibilities for

exceeding existing goals.

•Diagnosis : analysing the underlying causes.

Step 2: Think Up Alternative Solutions

•After identified problem and opportunity, need to come up

with alternative solutions.

• For a programmed decision- easy and obvious.

• For a non-programmed decision- more creative, more better.

Step 3: Evaluate Alternatives & Select a Solution

•Not only according to cost and quality, but according to the

following question :

1. Is it ethical?

2. Is it feasible?

3. Is it ultimately effective?

Step 4: Implement & Evaluate the Solution Chosen

• Successful Implementation:

1. Plan Carefully.

2. Be Sensitive to those affected.

• Evaluation – follow up and evaluate the result

4 Possibilities if the solution is not working?

i •Give it more time

ii •Change it slightly

iii •Try another alternative

iv •Start over

Reason that Hindrances of Perfectly Rational Decision Making

Complexity

Limitation of Time & Money

Imperfect Information

Abundantly of Information

Different priorities

Conflicting goals

5 Advantages of Group Decision Making

Greater pool of knowledge

Different Perspectives

Intellectual Stimulation

Better understanding of decision rationale

Deeper commitment towards the decision

4 Disadvantages of Group Decision

Dominate & Intimidate

Groupthink

SatisficingGoal

Displacement

Group decision making are less efficient• Need a lot of time to make decision• Time pressures or serious effect of a decision• Use less information and fewer communication

channels• Probability of a bad decision increase

Group size affects the decision quality• Larger group, lower quality of the decision

They may be too confident• More confident about their judgement and

choices liability because it can lead to groupthink

Knowledge counts• Group members know a good deal about the

relevant issue The group leader has the ability to weight member’s opinion

4 Types of Group Problem Solving Techniques

Brainstorming

Nominal Group

Technique

Delphi Technique

Computer-aided decision

making

BIAS Decision

Overconfident Ignoring the situation

Basing decision on

prior decision belief

Not enough information

THE END