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Decision Making

MS 204/U1/L2/Ashima

Decision-making
As defined by Baker , efficient
decision-making involves a series of
steps that require the input of
information at different stages of the
process, as well as a process for
feedback.
MS 204/U1/L2/Ashima

Decisions
Made up of a composite of information,
data, facts and belief.
Data by itself does not constitute useful
information unless it is analyzed and
processed.

MS 204/U1/L2/Ashima

Decision ( Restrictions)
Is only as good as the data that informed it
Is only as good as the system which exists
to implement
Is only good if you have the means to
implement it
Is only good if other people understand it
and what it means

MS 204/U1/L2/Ashima

Types of Decisions

Organizational decision making


process of identifying and solving
problems
1. Problem Identification
2. Problem Solution

Programmed Decisions repetitive and


well defined
Nonprogrammed Decisions novel and
poorly defined
MS 204/U1/L2/Ashima

Decision Making in Todays


Environment

MS 204/U1/L2/Ashima

Systems
A SYSTEM is a collection of objects such as
people, resources, concepts, and
procedures intended to perform an
identifiable function or to serve a goal

System Levels (Hierarchy): All systems are


subsystems interconnected through
interfaces

MS 204/U1/L2/Ashima

The Structure of a
System
Three Distinct Parts of Systems
Inputs
Processes
Outputs

Systems
Are surrounded by an environment
Frequently include a feedback mechanism
A human, the decision maker, is usually considered part of
the system

MS 204/U1/L2/Ashima

System
Environment

Output(s)

Input(s)
Processes

Feedback

MS 204/U1/L2/Ashima

Boundary

Environmental Elements Can Be

Social
Political
Legal
Physical
Economical
Often Other Systems

MS 204/U1/L2/Ashima

Closed and Open Systems


A Closed System is totally independent of other
systems and subsystems
An Open System is very dependent on its
environment

MS 204/U1/L2/Ashima

Three Phase Decision-making Process


(Simon Model)

Intelligence
searching for conditions that call for
decisions

Design
inventing, developing, and analyzing
possible courses of action

Choice
selecting a course of action from those
available

Management Science
Scientific approach to automate
managerial decision making
1. Define problem
2. Classify problem
3. Construct mathematical model
4. Find and evaluate potential solutions
5. Choose and recommend a solution

Decision Making Process

MS 204/U1/L2/Ashima

Decision Making Process


Intelligence searching for conditions in
the environment that call for decisions
Design inventing, developing, and analyzing poss
ible courses of action
Choice selecting a course of
action from those available
Implementation implementing
the selected course of action
Monitoring checking the consequences of
the decision made after implementation
MS 204/U1/L2/Ashima

Thank You!!
Queries??

MS 204/U1/L2/Ashima

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