QTĐC lesson 2 decision making

LESSON • Describe the decision-making process • Explain the four ways managers make decisions • Classify decisions and decision-making conditions • Describe different decision-making styles and discuss how biases affect decision making • Identify effective decision-making techniques Lesson - By LHK Giang Jens Martensson 01 Lesson - By LHK Giang Jens Martensson 02 DECISION Decision – a choice from two or more alternatives Lesson - By LHK Giang Jens Martensson 02 THE NATURE OF MANAGERIAL DECISION MAKING Decision making - The process by which managers respond to opportunities and threats by analyzing options and making decisions about goals and courses of action + Decisions in response to opportunities - occurs when managers respond to ways to improve organizational performance + Decisions in response to threats - occurs when managers are impacted by adverse events to the organization Lesson - By LHK Giang Jens Martensson 03 THE NATURE OF MANAGERIAL DECISION MAKING “Whatever a manager does, he does through making decisions.” P F Drucker Lesson - By LHK Giang Jens Martensson 03 THE NATURE OF MANAGERIAL DECISION MAKING PLANNING ORGANIZING LEADING CONTROLLING Lesson - By LHK Giang Jens Martensson 03 THE NATURE OF MANAGERIAL DECISION MAKING Finding… …right answer …right question Lesson - By LHK Giang Jens Martensson 04 DECISION-MAKING PROCESS Lesson - By LHK Giang Jens Martensson 05 STEP 1: IDENTIFY A PROBLEM Problem is an obstacle that makes it difficult to achieve a desired goal or purpose Problem VS Lesson - By LHK Giang Symptom of problem 10Jens Martensson 06 STRUCTURED – UNSTRUCTURED PROBLEMS Structured problems Unstructured problems • New or unusual • Ambiguous • Incomplete information • Straightforward • Familiar • Easily defined Lesson - By LHK Giang 21Jens Martensson 18 PROGRAMMED - NONPROGRAMMED DECISIONS Programmed decisions - a repetitive decision that can be handled by a routine approach Non-programmed decisions Unique and nonrecurring decisions that require a custom-made solution Lesson - By LHK Giang 22Jens Martensson 19 PROGRAMMED - NONPROGRAMMED DECISIONS ❑ Programmed decisions are based on: • Procedure: A series of sequential steps used to respond to a well-structured problem • Rule: An explicit statement that tells managers what can or cannot be done • Policy: A guideline for making decisions Lesson - By LHK Giang 23Jens Martensson 20 RELATIONSHIP OF PROBLEMS, DECISIONS, AND LEVEL Lesson - By LHK Giang 24Jens Martensson 21 PROGRAMMED VERSUS NONPROGRAMMED DECISIONS … … … … … … … Lesson - By LHK Giang 25Jens Martensson 22 DECISION-MAKING CONDITIONS • Certainty – a situation in which a manager can make accurate decisions because all outcomes are known • Risk – a situation in which the decision maker is able to estimate the likelihood of certain outcomes • Uncertainty – a situation in which a decision maker has neither certainty nor reasonable probability estimates available Lesson - By LHK Giang 26Jens Martensson 23 INDIVIDUAL/ GROUP DECISION-MAKING Individual decisionmaking Discussion: Pros and cons Lesson - By LHK Giang Group decisionmaking 27Jens Martensson 23 INDIVIDUAL DECISION MAKING - PROS AND CONS ADVANTAGES DISADVANTAGES • Time and cost saving • Limit of information and knowledge • High level of responsibility • Avoid conflict • May not consider many aspects of the problem • Less dominated by various people • Less alternatives • No democracy • The solution is usually not widely accepted Lesson - By LHK Giang 28Jens Martensson 25 GROUP DECISION-MAKING ADVANTAGES DISADVANTAGES • More complete information • Time-consuming • Diversity of experience • Pressure to conform • Domination by a few • Generation of more alternatives • Solutions more likely to be accepted by those concerned Lesson - By LHK Giang 29Jens Martensson 26 TECHNIQUES OF GROUP DECISION-MAKING • Brainstorming • Nominal Group Technique • Delphi Technique Lesson - By LHK Giang 30Jens Martensson 27 DECISION TREE Lesson - By LHK Giang 31Jens Martensson 31 DECISION TREE Decision node States of nature node Lesson - By LHK Giang 32Jens Martensson 31 DECISION TREE Draw a decision tree for the following information: Possibility (j) Option (i) High demand (j=1) Low demand (j=2) Large factory (i=1) 200.000 -180.000 Small factory (i=2) 100.000 -20.000 0,5 0,5 Probability Lesson - By LHK Giang 33Jens Martensson 31 DECISION TREE 10.000 Small factory 40.000 High (0.5) 200.000 Low (0.5) -180.000 High (0.5) 100.000 Low (0.5) -20.000 0 Lesson - By LHK Giang 34Jens Martensson 32 THANK YOU!!! ... Lesson - By LHK Giang 26 Jens Martensson 23 INDIVIDUAL/ GROUP DECISION- MAKING Individual decisionmaking Discussion: Pros and cons Lesson - By LHK Giang Group decisionmaking 27 Jens Martensson 23 ... for making decisions Lesson - By LHK Giang 23 Jens Martensson 20 RELATIONSHIP OF PROBLEMS, DECISIONS, AND LEVEL Lesson - By LHK Giang 24 Jens Martensson 21 PROGRAMMED VERSUS NONPROGRAMMED DECISIONS... how biases affect decision making • Identify effective decision- making techniques Lesson - By LHK Giang Jens Martensson 01 Lesson - By LHK Giang Jens Martensson 02 DECISION Decision – a choice