Human Decision Making Process

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Chapter 2

• Human Decision Making Process
• Mallach, 2000

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What is a decision?

• Reasoned choice among alternatives
• Problem solving overall process of closing the
  gap between reality and a more desirable outcome
• Decision statement what we are trying t decide

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Decision Statement, Alternative and Criteria
Fig 2.1
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Three Decision Process

• Invented by Herbert Simon (1960)
• Different people emphasize one phase from another
• Different decision making situations call
  spending more time in one phase or another
• We often bounce back

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Simon (1960)
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Types of decision
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Decision Tree

• Example truck engine decision

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Subjective Utility

• Utility curve defines the relationship between
  the amount of something that the person has and
  its value to person.
• Usually flattens as the amount increase
• Example number of cars
• In contrary savings in bank is quite linear
  (little flattening)

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Utility Curves
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Systematic Decision Making

• Reduce number of alternatives by determining the
  envelopes
• Eliminate alternatives considered inferior to
  another
• Example, choosing an instructor
• The higher, the more desirable

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Fig 2.10 atas
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Criteria

• Lexicographic elimination, starts with the most
  important attribute and keeps the alternative
  with the high score
• Elimination by aspects, compares one attribute at
  a time, and compare it with a minimal standard
• Conjunctive decision making, comparing
  sequentially
• Additive linear model, puts weighs on each
  attribute, and calculates the total score

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Impact of Culture in Decision Making

• The beliefs and behaviors characteristic of a
  particular group
• Who make the decision?
• Japans consensual decision making process vs.
  U.S. individual decision making
• Selecting a project leader in US vs. in Russia
  (team mates opinion matters much)
• US managers decision making framework, vs. French
  managers decision making framework (where are we
  now? What are the future possibilities?)

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Kepner-Tregoe Decision Making Method