Summing up: Decision making As a Manager’s Job

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Decision making As a Manager’s Job

Eight steps of decision making: any choice or decision, while being taken, consists of the following stages

  • Identification of problem
  • Identifying criteria of decision to be made
  • Ranking of criteria according to weight
  • Developing alternatives
  • Analyzing the formed alternatives
  • Selection of the optimum alternative
  • Implementation
  • Feedback and evaluation of effectiveness

Four ways of thinking styles

  • Rationality: simple problems, predefined goals, and the development of alternatives is not required.
  • Bounded rationality: choosing the best outcome from the available limited information.
  • Intuition: use of gut feelings, hunches and inner feelings to reach a decision
  • Evidence-based management: using the best available information to make a decision.

Types of decisions and decision-making conditions

  • Programmed decisions: routine simple decisions with a fixed course of actions like protocols, rules etc that need no analysis and formulation of alternatives.
  • Non-programmed decisions: unique, unstructured decisions tailor-made to suit each unique problem.
  • Certainty: when all the outcomes are known.
  • Risk: when some outcomes are known and manager has to make probabilistic analysis to weigh the risks in each alternative.
  • Uncertainty: when none of the outcomes are known and guesswork has to be employed.

Different styles of decision-making and role of Bias

  • Linear thinking: analytical and minute interpretation of available information for decision-making purposes.
  • Non-linear thinking: intuitive and unorthodox approach towards the problem for decision-making purposes.
  • Bias: any prejudice among the manager which hinders their ability to objectively make a decision. Examples include overconfidence, anchoring, selective perception etc.

Techniques to make effective decisions

  • Prioritize the important aspects.
  • Be consistent and apply logic.
  • Don’t use excess information than that required.
  • Encourage feedback and informed opinions for better evaluation.
  • Should be flexible and easy to implement.
  • Combine the best of both intuition and analysis.
  • Develop your own unique style of thinking.

Decision making As a Manager's Job



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