DECISION MAKING

INTRODUCTION
• Many times, engineer manager will be confronted
by situations where he will have to choose from
among various options.
• A major blunder in decision making may be
sufficient to cause the destruction of any
organization.
• Good decisions will provide the right environment for
continuous growth and success of any organized
effort.
 DECISION-MAKING AS A
MANAGEMENT RESPONSIBILITY
• It is a responsibility of the engineer manager.
• Delaney concludes that the type of managers
who cannot or do not want to make decisions
are dangerous and “should be removed from
their position as soon as possible.”
• Higher Management level = more
complicated decision-making
 WHAT IS DECISION-MAKING?

• “the process of identifying and choosing

alternative courses of action in a manner
appropriate to the demands of the situation.”
• “heart of all the management functions.”
 THE DECISION MAKING PROCESS
• Diagnose problem
• Analyze environment
• Articulate problem or opportunity
• Develop viable alternatives
• Evaluate alternatives
• Make a choice
• Implement decision
• Evaluate and adapt decision results
 DIAGNOSE PROBLEM

• If the manager fails in this aspect, it is almost

impossible to succeed in the subsequent steps.
• “tantamount to having the problem half-solved”
• Problem – exists when there is a difference between
an actual situation and a desired situation
 ANALYZE THE ENVIRONMENT
• Identification of constraints.
• Internal Limitations:
• Limited funds available for the purchase of the equipment.
• Limited training on the part of employees.
• Ill-designed facilities.

• External Limitations:
• Patents are controlled by other organizations.
• A very limited market for the company’s products and services exists
• Strict enforcement of local zoning regulations.
 DEVELOP VIABLE ALTERNATIVES
• Prepare a list of alternative solutions.
• Determine the viability of each solutions.
• Revise the list by striking out those which are not viable.
 CONTINUATION…
• Improve the capacity of the firm by hiring more workers and building
additional facilities.
• Secure the services of subcontractors.
• Buy the needed additional output from another firm.
• Stop serving some of the company’s customers.
• Delay servicing some clients.
 EVALUATE ALTERNATIVES
• Proper evaluation makes choosing the right solution less difficult.
• “each alternative must be analyzed and evaluated in terms of its value, cost
and risk characteristics”
 MAKE A CHOICE

• “process of selecting among alternatives

representing potential solutions to a problem”
• “particular effort should be made to identify all
significant consequences of each choice”
 IMPLEMENT DECISION

• Refers to carrying out the decision so that the

objectives sought will be achieved.
 EVALUATE AND ADAPT DECISION
RESULTS
• Ensure results and to provide information for future decisions
• Feedback – process which requires checking at stage of the process to
assure that the alternatives generated, the criteria used in evaluation, and
the solution selected for implementation are in keeping with the goals and
objectives.
• Control – actions made to ensure that activities performed math the desired
activities or goals that have been set.
 APPROACHES IN SOLVING
PROBLEMS
• Qualitative Evaluation – using intuition and subjective judgment.
• The problem is fairly simple.
• The problem is familiar
• The costs involved are not great
• Immediate decisions are needed.

• Quantitative Evaluation – refers to the evaluation of alternatives using any

technique in a group classified as rational and analytical.