A decision is a choice made from two or more alternatives. The
decision-making process is defined
as a set of different steps that begins
with identifying a problem and decision
criteria and allocating weights to those
criteria; moves to developing,
analyzing, and selecting an alternative
that can resolve the problem; implements
the alternative; and concludes with
evaluating the decision’s effectiveness.
Models of decision making can be either descriptive or normative.
1. Descriptive decision-making models attempt to prescribe how
managers actually do make decisions.
2. Normative decision-making models attempt to prescribe how
managers should process.
Following the prescription should lead to a more effective
decision making process.
The models usually incorporate four steps.
Steps in an effective decision-making process:
The first step is to identify the
organizational problem, i.e.,
discrepancies between a current state or
condition and what is desired.
The scanning state involves monitoring the work situation for
changing circumstances that may signal
the emergence of a problem.
The categorization stage entails attempting to understand and
verify signs that there is some type of
discrepancy between a current state and
what is desired.
The diagnosis stage involves gathering additional information
and specifying both the nature and the
causes of the problem.
The generation of alternative
solutions step is facilitated by
using the four principles associated
Don’t criticize ideas while generating possible solutions
Freewheel, i.e., offer even seemingly wild and outrageous
ideas in an effort to trigger more
usable ideas from others.
Offer as many ideas as possible to increase the probability
of coming up with an effective solution.
Combine and improve on ideas that have been offered.
The choice of an alternative step
comes only after the alternatives are
evaluated systematically according to
six general criteria:
Feasibility is the extent to which an alternative can be
accomplished within related
organizational constraints, such as
time, budgets, technology, and policies.
Quality is the extend to which an alternative effectively
solves the problem under consideration.
Acceptability is the degree to which the decision makers and
others who will be affected by the
implementation of the alternative are
willing to support it.
Costs are the resource levels required and the extent to
which the alternative is likely to have
undesirable side effects.
Reversibility is the extent to which the alternative can be
reversed, if at all.
The ethics criterion refers to the extent to which an
alternative is compatible with the
social responsibilities of the
organization and with ethical standards.
Finally, the implementing and
monitoring the chosen solution step
must be planned to avoid failure of the
1. Implementation requires careful planning.
The amount of planning depends upon whether the projected
changes are minor or major.
Irreversible changes require a great deal of planning.
2. Implementation requires sensitivity to those involved in or affected
by the implementation.
Affected individuals are more likely to support a decision
when they are able to participate in its
If Participation is not feasible, individuals should be kept
informed of the changes.
Monitoring is necessary to ensure that things are progressing
as planned and that the problem that
triggered the planning process has been
Decision Making Situation:
Decision-making situations differ according to the types of problems that
must be handled.
Certainty is a situation in which a manager can make
accurate decisions because the outcome
of every alternative is known. However,
this isn’t characteristic of most
is a condition in which the decision maker
chooses a course of action without
complete knowledge of the consequences
that will follow implementation.
Risk is the possibility that a chosen action could lead to
losses rather than the intended results.
Uncertainty is seen as the reason why situation is risky.
A rapidly changing environment is a
major cause of uncertainty.