What is Decision Making?

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What is Decision Making?

• Business Management
• Chapter 8.1

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Decision Making

• Hundreds of decisions each day
• Varying levels of importance
• Varying degrees of difficulty

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Ways to Make Decisions

• Two basic ways
• Intuitively
• Rationally

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Intuitive Decision Making

• Decisions based on intuition or hunches
• Rely on experience / knowledge rather than
  statistical data
• Can go against traditional approaches
• Often used when time plays a factor

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Rational Decision Making

• Decisions based on factual information and
  logical reasoning
• More scientific than intuitive
• Relies on quick and effective gathering and
  analysis of information
• Many sources are often consulted

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Brainstorm

• Think of a decision you made today that was
  intuitive
• Think of a decision you made today that was
  rational

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Six Steps to Rational Decisions

1. Recognizing the need for a decision
2. Determining how to make a decision
3. Gathering information to help
4. Identifying possible alternatives
5. Evaluating each alternative
6. Selecting the best alternative

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Risk, Timing, Values

• The risk associated with actions can factor into
  the choice
• The time frame for making the decision can factor
  into the choice
• The personal values of the decision maker can
  factor into the choice

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Considerations

• Managers position in the company
• The companys corporate culture
• The employees the manager supervises
• Resources available to the manager

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Real World Examples

• What factors and considerations go into deciding
  whether or not to cancel school for a snow day?
• What factors and considerations go into deciding
  whether or not to press charges against a kid
  shoplifting at your store?

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Participation in Decision Making

• Two heads are better than one.
• Managers rely on input of team
• Many companies use team decision making a group
  of individuals with different backgrounds
  assigned to resolve specific problems or issues

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Types of Management Decision Styles

1. Autocratic manager decides alone
2. Semi-autocratic employee input, but manager
   decides
3. Leading manager uses input to lead to decision
4. Collaborative freely share and discuss possible
   solutions manager picks
5. Accomodating freely share and discuss solutions
   before choosing one

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Self-Reflection

• Which management decision style do you think is
  most effective?
• If you were the manager, which decision style do
  you think you would use most often?
• Are there times when different styles are more
  appropriate than others?