IBM: Managerial Decision Making
Transcript of IBM: Managerial Decision Making
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MANAGERIAL DECISION MAKING
MADE BY: ARSHIA TAHIR BS-III
DECISION MAKING
1)CATEGORIES OF
DECISIONS Programm
ed & non-programm
ed
2)DECSION MAKING
SITUATIONS certainty,
risk,uncertainty, ambiguity3) STEPS
IN DECISION MAKING
4) DECISION MAKING MODELS
Classical,adminitrative
,political
5) DECISION MAKING STYLES
Directive, analytical, conceptua
l, behavioral
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OVERVIEW OF MANAGERIAL DECISION MAKING
6) PARTICIPATION IN
DEICISON MAKING
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DECISION. DECISION MAKING. CATEGORIES OF
DECISIONS. SITUATIONS OF DECISION
MAKING
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DECISIONChoice made from
available alternatives.
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DECISION MAKING
Process of identifying
problems and opportunities and resolving
them.Decision making is not easy
It must be done amid • ever-changing factors • unclear information • conflicting points of view
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CATEGORIES OF DEICISONS
PROGRAMMED DECISIONS
• Involve problems or situations that have occurred often.
• Circumstances and solutions are predictable.
• Decisions are made in response to recurring organizational problems.
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• Made in response to problems that have unique circumstances.
• May provide unpredictable results.
• Situations that have never occurred before.
NON-PROGRAMMED DECISIONS
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SITUATIONS OF DECISION MAKING
DECISION MAKING UNDER CERTAINTY
DEICISON MAKING UNDER RISK
DEICISION MAKING UNDER UNCETAINTY
DECISION MAKING UNDER AMBIGUITY
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CERTAINTY RISK UNCERTAINTY AMBIGUITY
All information is available
Decision has clear-cut goals.
Managers know which goals they want to achieve.
Most difficult decision situation.
Good information is available.
Information about future alternatives and events is incomplete.
Goals to be achieved or problems to be solved is unclear.
Future outcomes associated with each alternative are subject to chance
Managers may have to come up with creative goals and alternatives.
Alternatives are difficult to define.
Information about outcome is unavailable. 7
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STEPS IN
DECISION MAKING PROCESS
PRESENTED BY: FARZANA NIAZI
MADE BY: ARSHIA TAHIR BS-III
DECISION
MAKING PROCES
S
1) IDENTIFY A PROBLEM
OR OPPORTUNI
TY 2) GATHERING INFORMATI
ON
3)ANALYZE THE
SITUATION
4)DEVELOP
OPTIONS5)
EVALUATION OF
ALTERNATIVES
6) SELECT THE BEST
ALTERNATIVE
7) ACT ON THE
DECISION
8) EVALUAT
E THE RESULTS
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Identifying the purpose of decision is based on following reasons:
1) What exactly is the
problem?
2) How the
problem should
be solved?
3) Who are the affected parties of the
problem?
4) Does the
problem have a
deadline or a
specific time-line?
The problem and the opportunity is thoroughly analyzed.
IDENTIFY A PROBLEM OR OPPORTUNITY
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2) GATHERING INFORMATION
what is relevant and what is not relevant to the decision?What do you need to know before you can make a decision, or that will help you make the right one?
Who knows, who can help, who has the power, and influence to make this happen ( or to stop it)?
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3)ANALYZE THE SITUATION
What alternative courses of action may be available to you?
What different interpretations of the data may be possible?
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4) DEVELOP OPTIONS
List down all the ideas/options and be creative and positive.
Ask ‘WHAT IF’ questions.
Generate all possible solutions to the problems.
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5) EVALUATION OF ALTERNATIVES• What criteria should you use to
evaluate?• Evaluate for feasibility, acceptability,
and desirability.• Which alternative will best achieve
your objectives?6) SELECT THE BEST ALTERNATIVEExplore the provisional best alternative for future possible adverse consequences.What problem might it create?What are the risks of making this decision?
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7) EXECUTE DECISIONConvert your decision into a plan or a sequence of activities. Is the decision accepted and supported by colleagues?
8) EVALUATE RESULTSEvaluate the outcome of your decision. See whether there is anything you should learn and then correct in future decision making. This is one of the best practices that will improve your decision-making skills. 16
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DECISION MAKING MODELS CLASSICAL MODELADMINISTRATIVE MODELPOLITICAL MODEL
Depends on the manager’s personal preferenceWhether the decision is programmed or non-programmedExtent to which the decision is characterized by certainty, risk, uncertainty, or ambiguity
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THE CLASSICAL/ RATIONAL MODEL
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THE ADMINISTRATIVE/ BOUNDED RATIONALITY MODEL
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POLITICAL MODEL
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When faced with a decision situation, managers
are:
Neither rational
nor objective
or unbiased.
Engage in
colliation
buildingIt
resembles the real
environment in which managers operate.
Useful in making
non-program
med decisions.
Decisions are comple
x
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CLASSICAL MODEL
Clear-cut problems and goals.
Conditions of certainty.
Full information about alternatives and their outcomes.
Rational choice by individual for maximizing outcomes.
ADMINITRATIVE MODELVague(unclear) problems and goals. Conditions of
uncertainty.
Limited information about alternatives and their outcomes.
Satisficing choice for resolving problems using intuition(gut feeling).
POLITICAL MODEL
Conflicting goals.
Conditions of uncertainty and ambiguity(unclear).
Inconsistent (conflicting) viewpoints
Bargaining(negotiate) and discussion making among colliation members.
CHARACTERISTICS OF MODELS
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DIRECTIVE STYLEANALYTICAL STYLECONCEPTUAL STYLEBEHAVIORAL STYLE
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Decision Style: Differences among people with respect to how they perceive problems and make decisionsNot all managers make decisions the same.
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PERSONAL DECISION FRAMEWORKSITUATION: PROGRAM
MED NON-
PROGRAMMED
CLASSICALADMINISTR
ATIVE POLITICAL DECISION
STEPS
PERSONAL DECISION
STYLE: DIRECTIVE ANALYTICA
L CONCEPTU
ALBEHAVIORA
L
DECISION CHOICE:
BEST SOLUTION
TO THE PROBLEM.
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DIRECTIVE STYLE
Leader is aggressive(forceful)/ autocratic in nature.The leader does not ask for any suggestions or ideas from outside sources.They rely on their own internal information, knowledge, experience and judgment.Consider few alternatives.The leader is also completely responsible for the good or bad outcome as a result of the decision. Employees have low abilities.Relies heavily on rules.
Leader maintains total control and ownership of the decision.
Good verbal communicator.
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Leader is innovative and likes to analyze large amounts of data before making a decision.
They are adaptable and can function well even under unique or challenging situations. An analytic decision maker wants to use direct observation, data, and facts when coming to a decision. They probably enjoy solving problems.
The decision-making style is due to uncertainty, and lack of information.
ANALYTICAL STYLE
Use great care in alternatives and analysis i.e.: What if ?
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CONCEPTUAL STYLEConceptual style decision makers like to look at problems from an artistic angle.They are extremely creative and like to look for solutions that are outside the box. They are achievement oriented and like to think far into the future when making important decisions. This kind of decision making is for a long term, and subjected to changes.Look at many alternatives.Will take risks and try to make decisions that take a broad vision in problem solving.Employees have high abilities.When leader is achievement-oriented, the employees also have high achievement motivation.
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Behavioral decision makers like working with a group, democratic in nature.
Very interested in making sure that everyone works well together and avoids conflict.
Together they attempt to settle differences and negotiate a solution that is acceptable to all parties.
He makes decision based on what feels right, and what will motivate the team members to perform( interesting and unstressed tasks) The decision is communicated clearly and leaves no room for doubt.Prefer meetings.
BEHAVIORAL STYLE
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PARTICIPATION IN DECISION MAKING
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Helps gauge the appropriate amount of participation for subordinates in process
●Leader Participation StylesFive levels of subordinate participation in decision making ranging from highly autocratic to highly democratic.
PARTICIPATION IN DECISION MAKINGVroom-Jago
Model
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SEVEN LEADERSHIP DIAGNOSTIC QUESTIONS
How significant is the decision?
How important is subordinate commitment?
What is the level of the leader’s expertise?If the leader were to make the decision alone at what level would subordinates be committed to the decision?What level is the subordinate’s support for the team or organization’s objectives?What relative t is the member’s level of knowledge or expertise to the problem?How skilled or committed are group members to working together?
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Diagnostic QuestionsDecision participation depends on the responses to seven diagnostic questions about
●the problem ●the required level of decision quality
●the importance of having subordinates commit to the decision
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NEW APPROA
CHES FOR
TURBULENT TIMES
BRAIN STORMING
ENGAGE IN
RIGOROUS
LEARN;
DON’T PUNIS
H
KNOW WHEN
TO BELL
PRACTISE THE FIVE WAYS
NEW APPROACHES FOR TURBULENT TIMES
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