Systematic Decision Making

Jan T.L. Yap

Decision Making

A decision is about making

choices;
It is the cut off point at which you
stop the process of thinking and
begin the process of action;
There are many types of decisions
including:
Yes or no decisions,
Choose from a list,
Creative.
Making Decisions

If a decision is a cut off point when

the thinking process stops, then
.
Clearly the quality of thinking
determines the quality of
decisions.
But what is involved in the
thinking process?
There are many ways to make
decisions and all manners of
decisions to be made;
Three types of Decisions
1. Routine decisions: when problems are relatively well defined
and common and when established rules, policies, and
procedures can be used to solve them. E.g. shortage of
application forms or client assessment forms;
2. Adaptive decisions: are decisions made when problems and
alternative solutions are somewhat unusual and only partially
understood. E.g. changing working time , work pattern or
methods of assignment;
3. Innovative decisions: are decisions made when problems are
unusual and unclear and creative solutions are necessary.
Food for Thought: Think about it!

What would be your approach to the 3 types of

decisions?
How would you go about making a
Routine decision? Who would you involve?
Would you delegate the decision making?
Adaptive decision? Would you pass it on to your boss?
Would you consult a colleague or an outside
Innovative decision? expert?
Would you ask your team members for their
input?
What process would you use?
Would you insist on what you believe is the
best decision or discard yours in favour of
what the team decides?
Evaluating Options

Generating several options will normally

help you to select the one that will best
help you achieve your decisions
objectives.
The time and effort spent generating
options depends on the importance of
the decision being made.
Options can be generated by:
Research
Informal discussion
Brainstorming
Meetings
Evaluating Options

There is not an optimum number of

options for making an effective
decision;
Sometimes a decision is simply
just yes or no or a choice between
two things.
Factors affecting decision making
1. Experience and knowledge;

2. Creating thinking;

3. Conceptual thinking;
4. Pressure and Stress;

5. Interpersonal conflict;

6. Time available, money, energy

Factors affecting decision making

7. Routine versus non routine decision;

8. Risk associated with the decision;

9. Critical nature of work;

10. Written guidelines;
Factors affecting decision making

11. Organizations attitude toward decision

making;

12. Amount and kind of information available;

13. Degree of acceptance of decision and
support;

14. Managers personal ability.

Ingredients for Good Decision
Making

Follow a systematic process:

This process is usually similar to the problem solving process;
Involve your team;
Delegate:
Usually routine decisions can be delegated;
Brainstorm:
This gives you a variety of alternatives to a decision;
Be creative;
Be objective:
Dont be emotionally attached to a particular decision even
when it may not be the best.
Characteristics of an effective
decision making process

Conducted in a systematic, comprehensive

way of thinking;
The consequences of the implemented
decision are identified;
They result in positive outcomes with minimal
negative consequences;
Are based on a "Goal-oriented" analysis of
the situation, its problems, and their optional
solutions.
The decision making process

1) Define the problem

Formulate the problem as accurate as possible;

2) Gather information: from where?

) Stakeholders: Individuals, groups or communities
that are affected by the problem or its solution.
) Facts & data acquired from
Research,
Results from experimentation and studies,
Interviews of "experts" and trusted sources,
Observed events, past or present, either personally
observed.
The decision making process

3) Develop and Weigh Options

Look at the situation in different ways; find a new
perspective that hasnt thought of before. Once you
have listed or mapped options, be open to their
possibilities;
After listing possible options, evaluate them without
prejudice, no matter how appealing or distasteful;
Consider all criteria. While a particular decision may
solve the problem, it may not work if
resources aren't available,
people won't accept it, or
it causes new problems.
The decision making process

4) Select the best options

Don't consider any option as "perfect solution." If there were,
there probably wouldn't be a problem in the first place;
Consider your intuition, or inner feelings in deciding on a
course of action;
Return to a trusted outsider: Is there something you missed?
Does he/she see a problem with your solution?

5) Implement the decision

until it is acted on, a decision is only a good intention;

6) Monitor progress.
Decision-Making
Conditions
Decision Making Under Certainty
A condition in which the decision maker knows with
reasonable certainty what the alternatives are and what
conditions are associated with each option.
Decision Making Under Risk
A condition in which the availability of each alternative
and its potential payoffs and costs are all associated
with risks.
Decision Making Under Uncertainty
A condition in which the decision maker does not know
all the options, the risks associated with each, or the
consequences of each option.
Decision-Making
Conditions
The decision
maker faces
conditions of...

Certainty Risk Uncertainty

Level of ambiguity and chances of making a bad decision

Lower Moderate Higher

Behavioral Aspects of
Decision Making
Ethics and Decision Making
Individual ethics (personal beliefs about right
and wrong behavior) combine with the
organizations ethics to create managerial
ethics;
Components of managerial ethics:
Relationships of the firm to employees,
Employees to the firm,
The firm to other economic agents.
Questions &
Discussions