MAKING DECISIONS

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MAKING DECISIONS

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Objective

• To be able to
• Explain and apply organisational decision
  processes

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Activity

• Identify three decisions you are involved in.
• Write down how one of these decisions is made.

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Decision-making Process

1. Formulate the problem
2. Construct a model to represent the problem
3. Use the model to generate the solution

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Models

• Rational decision-making
• Limited rationality model
• Logical incrementalism
• Emergent decisions

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Rational decision-making

• Define the decision
• Establish the objectives
• Classify the objectives (must/want)
• Define the musts (objective measurement)
• Define the wants (weighting)
• Generate alternatives
• Test alternatives against musts
• Score remaining alternatives against wants
• Select best alternative

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Limited rationality model

• Search for a solution
• Stop when a feasible solution is obtained
• Used for
• Higher level decisions
• Conflicting objectives
• Incomplete information
• Qualitative factors

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Logical incrementalism

• Follow-up to limited rationality decision
• Refine decision as you proceed

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Emergent decisions

• Piecemeal and unstructured
• Decision-making is a continuing process
• Suitable for higher level decisions

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Preparing for decision-making

• List alternatives
• Details about alternatives
• List advantages/disadvantages of alternatives
• List criteria for making decision
• Analyse advantages/disadvantages
• Draw conclusions from analysis
• Analyse risks
• Plan implementation
• Identify obstacles to implementation
• Make recommendation

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Preparing for decision-making

• List alternatives
• Details about alternatives
• List advantages/disadvantages of alternatives
• List criteria for making decision
• Analyse advantages/disadvantages
• Draw conclusions from analysis
• Analyse risks
• Plan implementation
• Identify obstacles to implementation
• Make recommendation

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