Loading
Notes
Study Reminders
Support
Text Version

Decision Making in Management - Lesson Summary

Set your study reminders

We will email you at these times to remind you to study.
  • Monday

    -

    7am

    +

    Tuesday

    -

    7am

    +

    Wednesday

    -

    7am

    +

    Thursday

    -

    7am

    +

    Friday

    -

    7am

    +

    Saturday

    -

    7am

    +

    Sunday

    -

    7am

    +

The key points from this module are:
The term decision making is referred to as the process of identifying problems and opportunities and then resolving them from a set of alternative courses of actions.
Managers have to make decisions on different aspects. These can be classified as ;
Strategic decisions, tactical decisions, operational decisions

Certain conditions influence the decision-making process, these are;
certainty, risk, uncertainty, ambiguity, corporate culture

There are four types of decision-making models, they are:
Classical model, Administrative model, Behavioural model, Political model

The choice of a model mostly depends on the personal preference of management and the extent of the influence of the conditions by certainty, uncertainty, risk and ambiguity
Herbert Simon has contributed to our better understanding of the decision-making process related to behavioural models. He has shown that human beings go through three essential stages in the act of solving problems.
1st stage that of intelligence/search for problems
2nd stage that of design/ alternative solutions
3rd stage that of choice / analyse alternative and choose one

There are two types of decision-making styles intuitive and rational

Managers/decision-makers tend to be rational human beings so that they assume to be balanced thinkers.

Lombardo, J and Scalia, S Classified four styles of decision making, they are directive, analytical, conceptual and behavioural.

Cognitive biases are decision making errors that we are prone to make and that have been repeatedly verified in laboratory settings or controlled experiments with human decision-makers.

Ethics are a set of moral principles that guide a person's behaviour. These morals are shaped by social norms, cultural practices and religious influences.

There are certain limitations of decision making, these are:
Time-consuming, compromised decisions, subjective decisions, biased decisions, Limited analysis, Uncontrollable environmental Factors, uncertain future, Responsibility is diluted

In an organisation, a group work process is followed to understand how an organization's members work together and get things done by a group.
Different types of groups include
Formal group, command group, power group, committees, informal group.
The stages of group development are as follows:
Forming
Storming
Norming
Performing
Adjourning

In the individual decision, certain limitations are depending upon which group decision making seemed to be a more accepted process in management practice. The comparison may be in light of the following
Framing effects
Reliance on heuristics reliance on heuristics
Inherent biases
Organisational constraints