College of Education

School of Continuing and Distance Education2014/2015 – 2016/2017

INFS 212

Principles of Management

Session 6 – Decision making

Lecturer: Dr. Emmanuel Adjei Department of Information StudiesContact Information: eadjei@ug.edu.gh

Session Overview

As individuals we are constantly faced by situations which require usto make decisions many times during the course of the day. We haveto answer questions such as when to get up in the morning, what towear, what to eat, what profession to pursue, when to go on leave,how many children to have, ect. Probably we are not conscious ofthese questions although we answer them and pass day-to-dayschedule. When you raise such questions and answer them you areengaged in decision-making. Everyday a number of major, minor andall sorts of decisions are being made in organisations. We mustrecognise the fact that the effectiveness and the efficiency of thedecision-making process of the individual supervisor has a greatimpact on the organisation.

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Session Objectives

Objectives

At the end of this Session, you should be to

• Define and explain decision-making

• Discuss the type of decisions

• Explain the steps in the decision-making process

• Identify some of the errors in decision making

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Session Outline

The key topics to be covered in the session are as follows:

• Topic One: Explaining Decision Making

• Topic Two: Types of Decisions

• Topic Three: Rational Decision Making

• Topic Four: Decision Making Conditions

• Topic Five: Errors in Decision Making

• Topic Six: Information and Decision Making

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Reading List

1. Robbins, S.P. & DeCenzo D.A. (2008) Fundamentals of

Management: Essential concepts and applications,

(Sixth Edition), Pearson, Prentice Hall: Upper

Saddle River, NJ. (Read Chapter 3, pages 70-77)

2. Chandan JS (2002). Management: Concepts and

Strategies. New Delhi, Vikas Publishing House, PVT Ltd

(Read Chapter 6, pages 125-145).

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EXPLAINING DECISION MAKING

Topic One

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Explaining Decision Making

Decisions and Decision Making

• Decision = choice made from available alternatives

• Decision Making = process of identifying problems and opportunities and resolving them

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Explaining Decision Making

TYPES OF DECISIONS

Topic Two

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Types of Decisions

Programmed decision:A decision that is fairly structured or recurs (occurs again)

with some frequency (or both).

Non-programmed decision:A decision that is relatively unstructured and occurs much

less often than a PROGRAMMED DECISION.

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Topic Three

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RATIONAL DECISION MAKING

Rational Decision Making

Rational Decision Making (Logical)

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C. GOKUL AP / EEE . Principles of management

Rational Decision Making

Rational Decision Making

1. Recognise the need for a decision

Managers recognise the need for a decision in the form of a problem or opportunity.

2.Definition of the problem

A problem is the gap between present and the desired state of affairs on the subject matter of the decision. The problem, once isolated must be defined and formulated.

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Rational Decision Making

2. Definition of the problem

• Collect data

• Diagnose and analyse the problem

• Find the root cause of the problem

• Identify resources and constrants

• Develop criteria for successful solution

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Rational Decision Making

3.Search and develop alternatives

The alternative course of action can be developed by

collecting more information, thinking creatively, consulting

experts and undertaking research.

4.Evaluate Alternatives

After identifying alternative courses of action, they

must be compared and evaluated. This step determines

the relative cost of each alternative.

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Rational Decision Making

5.Implement chosen alternative

• The decision taken by the management will not serve the purpose if it is not executed properly.

6.Learn from feedback

• Feedback is important because decision making is a continuous and never ending process

• Feedback information is very much useful in taking the corrective measures and in taking right decisions in the future

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DECISION MAKING CONDITIONS

Topic Four

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Decision Making Conditions

Decision-Making Conditions

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Certainty Risk Uncertainty

Level of ambiguity and chances of making a bad decision

Lower Moderate Higher

The decisionmaker faces

conditions of:

C. GOKUL AP / EEE . Principles of management

Decision Making Conditions

1.Certainty:

A condition in which the decision maker knows with reasonable certainty what the alternatives are and what conditions are associated with each alternative.

2. Risk:

A condition in which the availability of each alternative and its potential payoffs and costs are all associated with probability estimates.

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Decision Making Conditions

3. Uncertainty

A condition in which the decision maker does not know all the alternatives, the risks associated with each, or the likely consequences of each alternative.

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Errors in Decision Making

• Some researchers have pointed out some areas where some common mistakes are made that affect the decision making process as well as the efficiency of decisions. Some of these limitations and drawbacks are:– Indecisiveness

– Postponing the decision until the last minute

– Failure to identify the root cause of the problem

– Failure to assess the reliability of information sources

– Inappropriate method of analyzing the information collected

– Fear of implementing the decision and follow-up

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INFORMATION AND DECISION-MAKING

Topic Six

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Information and Decision-making

• Internal and external information of a wide variety, relevant to situation

• Investigation of internal resources and potential external sources

• Information on likely outcomes of a number of different solutions

• To identify and analyse a problem or opportunity

• To appraise available resources

• To compare alternative solutions and select optimum solution

Decision-Making

Purpose Source

Summary

• Decision making is at the core of everything managers

do. Consequently their success depends on their

decision-making skills.

• The decisions that managers make vary greatly.

Programmed decisions are repetitive and based

solely on objective data, whereas non-programmed

decisions involve new situations where there are no

“hard” data.

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Summary

• Decision making is s systematic process with six steps: Formulating

goals, evaluating the decision situation, analyzing alternatives,

selecting one alternative from those available, implementing the

decision, evaluating the results and following up.

• The responsibility for making decisions usually rests with one

person, nevertheless most managers consult other people before

making a decision.

• Poor decisions primarily result from unforeseen changes. In some

instances, though, ineffective decisions result from unreliable

information, failure to analyze alternatives fully, total reliance on

intuition, and fear of disastrous results.

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Sample Question for Consideration

1. Discuss briefly the steps in the process of rational

decision making process.

2. What are some of the common errors committed in

decision making and how these errors can be

avoided.

3. Identify and explain the three conditions under which

decisions are made.

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References

1. Robbins, S.P. & DeCenzo D.A. (2008) Fundamentals of

Management: Essential concepts and applications,

(Sixth Edition), Pearson, Prentice Hall: Upper Saddle

River, NJ. (Read Chapter 4, pages 98-117)

2. Chandan JS (2002). Management: Concepts and

Strategies. New Delhi, Vikas Publishing House, PVT Ltd

(Read Chapter 8, pages 171-197).

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