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CRITICAL DECISION-MAKING TECHNIQUES. DECISION MAKING. 1. What is Decision Making?. A. Developing a mtminetmoc to some course of action. 1. What is Decision Making?. A. Developing a commitment to some course of action. B. cshenuh and titiunino. 1. What is Decision Making?.

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CRITICAL DECISION-MAKING TECHNIQUES

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CRITICAL DECISION-MAKING TECHNIQUES


DECISION MAKING


1. What is Decision Making?

A. Developing a mtminetmoc to some course of action


1. What is Decision Making?

A. Developing a commitment to some course of action

B. cshenuh and titiunino


1. What is Decision Making?

A. Developing a commitment to some course of action

B. Hunches and intuition

C. pxereniece


1. What is Decision Making?

A. Developing a commitment to some course of action

B. Hunches and intuition

C. Experience


2. What are the Steps of Decision Making?

A. A stymtcisae approach of problem solving


2. What are the Steps of Decision Making?

A. A systematic approach of problem solving

B. yifntedi and fedine the specific problem


2. What are the Steps of Decision Making?

A. A systematic approach of problem solving

B. Identify and define the specific problem

C. Generation of lentvsatraie


2. What are the Steps of Decision Making?

A. A systematic approach of problem solving

B. Identify and define the specific problem

C. Generation of alternatives

D. eauiaegvlnt alternatives.


2. What are the Steps of Decision Making?

A. A systematic approach of problem solving

B. Identify and define the specific problem

C. Generation of alternatives

D. Evaluating alternatives

E. ticeglens a noitulos


2. What are the Steps of Decision Making?

A. A systematic approach of problem solving

B. Identify and define the specific problem

C. Generation of alternatives

D. Evaluating alternatives

E. Selecting a solution

F. mintepeglimn the solution


2. What are the Steps of Decision Making?

A. A systematic approach of problem solving

B. Identify and define the specific problem

C. Generation of alternatives

D. Evaluating alternatives

E. Selecting a solution

F. Implementing the solution

G. Following up and gavileutane the rutless


2. What are the Steps of Decision Making?

A. A systematic approach of problem solving

B. Identify and define the specific problem

C. Generation of alternatives

D. Evaluating alternatives

E. Selecting a solution

F. Implementing the solution

G. Following up and evaluating the results


Recognize the problem and

the need for a decision

Identify the objective of

the decision

Gather and evaluate data

and diagnose the situation

List and evaluate

alternatives

The Decision-Making Process


Select the best

course of action

Implement

the decision

Gather

feedback

The Decision-Making Process

Follow up


3. What are some Traps of Decision Making?

A. Becomes aware of the rajom ratsp


3. What are some Traps of Decision Making?

A. Becomes aware of the major traps

B. All file and thead


3. What are some Traps of Decision Making?

A. Becomes aware of the major traps

B. All life and death

C. sicisrtuistaoisn


3. What are some Traps of Decision Making?

A. Becomes aware of the major traps

B. All life and death

C. Crisis situations

D. Failing to sutlonc others


3. What are some Traps of Decision Making?

A. Becomes aware of the major traps

B. All life and death

C. Crisis situations

D. Failing to consult others

E. Regretting past sonsiceid


3. What are some Traps of Decision Making?

A. Becomes aware of the major traps

B. All life and death

C. Crisis situations

D. Failing to consult others

E. Regretting past decisions

F. Never midatitng a tismaek


3. What are some Traps of Decision Making?

A. Becomes aware of the major traps

B. All life and death

C. Crisis situations

D. Failing to consult others

E. Regretting past decisions

F. Never admitting a mistake

G. Following perdectens and ilicopse


3. What are some Traps of Decision Making?

A. Becomes aware of the major traps

B. All life and death

C. Crisis situations

D. Failing to consult others

E. Regretting past decisions

F. Never admitting a mistake

G. Following precedents and policies


When, against one’s will, one is high-pressured into making a hurried decision, the best answer is always “No,” because “No” is more easily changed to “Yes” than “Yes” is changed to “No.”

~Charles E. Nielsen


5. Decision Making in a Group?

A. Additional serpeptcvise are provided


5. Decision Making in a Group?

A. Additional perspectives are provided

B. Increased pinut and gusgesitosn


5. Decision Making in a Group?

A. Additional perspectives are provided

B. Increased input and suggestions

C. mocnomtusitaniso that favor using a group


5. Decision Making in a Group?

A. Additional perspectives are provided

B. Increased input and suggestions

C. Common situations that favor using a group


  • More knowledge through pooling of

  • group resources

  • 2) Increased acceptance & commitment due to voice in decisions

  • 3) Greater understanding due to

  • involvement in decision stages

Advantages

1) Pressure in groups to conform

2) domination by one forceful member or

dominant clique

3) Amount of time required, because

group is slower than individual to make

a decision

Disadvantages

Group Decision Making


All my life whenever it comes time to make a decision, I make it and forget about it, and go to work on something else, and when these things came before me, as President of the United States, I made the decision on them, and went into the next thing. You never have time to stop. You’ve got to keep going because there’s always a decision just ahead of you that you’ve got to make, and you don’t want to look back. If you made a mistake in one of these decisions, correct it by another decision, and go ahead.

~Harry S. Truman


Advice to Managers

THE DECISION MAKING PROCESS

  • Realize that different members of an organization are going to define the same problem or opportunity in different ways depending on their personalities, abilities, knowledge, expertise, and the groups they belong to.

  • Carefully examine how you define problems and opportunities. Explore the implications of defining these problems and opportunities in different ways.

  • Realize there are limits to the amount of information you and your subordinates can take into account when making decision. Focus on information that is most relevant to the decision at hand.


Advice to Managers

SOURCES OF ERROR IN DECISION MAKING

  • Do not give vivid instances of an event or cause too much weight in decision making. If a vivid or extreme instance comes to mind, think about the extent to which less extreme or vivid events and causes have occurred.

  • When making decisions, be sure to consider events and causes beyond the most recent ones.

  • When trying to estimate the likelihood of an event or cause occurring, take into account the number of times that this even or cause has actually occurred. Remember, rare events are unlikely to be repeated.


Advice to Managers

SOURCES OF ERROR IN DECISION MAKING (cont’d)

  • Whenever you are making a decision based on adjusting some initial amount (such as a worker’s salary or marketing expenditures), stop and determine whether the initial amount was originally set too high or too low.

  • Realize that a sign of good decision making is the ability to recognize when a decision needs to be reversed.

  • When deciding whether to commit resources to a course of action, take into account the costs of only the resources you are about to commit. Do not take into account costs that have already been incurred.

  • If you are deciding whether to commit more resources to a course of action that has already resulted in some losses of money, time, or effort, ask yourself whether you would commit the resources if you had not already experienced the losses but had your current knowledge.


Symptoms of groupthink

  • Illusion of invulnerabilityGroup members are very optimistic and take excessive risks.

  • Belief in inherent morality of the groupGroup members fail to consider the ethical consequences of decisions

  • Collective rationalizationsGroup members ignore information that suggests they might need to rethink the wisdom of the decision

  • Stereotypes of other groupsOther groups with opposing views are viewed as being incompetent.


Symptoms of groupthink(cont’d)

  • Self-censorshipGroup members fail to mention any doubts they have to the group

  • Illusion of unanimityGroup members mistakenly believe they are all in total agreement

  • Direct pressure on dissentersMembers who disagree with the group’s decision are urged to change their views

  • Emergence of self-appointed mind guardsSome group members try to shield the group from any information that suggests that they need to reconsider the wisdom of the decision


Advice to Managers

GROUP MAKING DECISIONS

  • Use groups to make decisions when the decision requires a wide range of skills, knowledge, and expertise, or more information than a single individual could be expected to consider and remember, or when acceptance by others is necessary to implement the decision. But keep in mind that group decision making is time-consuming.

  • Use individuals to make decision when an individual has all the skills and knowledge necessary to make a good decision, when an individual can gather and accurately take into account all necessary information, and when acceptance by others for successful implementation is either unnecessary or likely to occur regardless of their involvement in decision making.


Advice to Managers

GROUP MAKING DECISIONS (cont’d)

  • Encourage group member to be critical of each other’s ideas and to raise any doubts or misgivings they may have.

  • In the groups you lead, wait to express your own opinions until the group has had a chance to evaluate the different alternatives.

  • Impress on group members that each of them is responsible for helping the group make a good decision.


Generate Alternatives

  • Innovation and Creativity

  • Brainstorming

  • Nominal Group Technique

  • Dialectic Inquiry

  • Devil’s advocacy


Brainstorming rules:

  • Defer judgment (otherwise you’ll interrupt the flow of ideas)

  • Build on the ideas of others (it’s far more productive than merely hogging the glory for your own insights)

  • Stay focused on the topic (no digression or departure)

  • One person at a time (so you don’t drown out that quiet, brilliant mumbler in the corner of the room)

  • Go for quantity (when Ideo staffers brainstorm, they shoot for 150 ideas in 30 to 45 minutes)

  • Encourage wild ideas (to paraphrase Einstein, “If at first an idea doesn’t sound absurd, then there’s no hope for it”)

  • Be visual (sketch ideas to help people understand them).


The Nominal Group Technique

A small group of 4-5 people gathers around a table. Leader identifies judgment issue and gives participants procedural instructions.

Participants write down all ideas that occur to them, keeping their lists private at this point. Creativity is encouraged during this phase.

Leader asks each participant to present ideas and writes them on a blackboard or flipchart, continuing until all ideas have been recorded.

Participants discuss each other’s ideas, clarifying, expanding, and evaluating them as a group.

Participants rank ideas privately in their own personal order and preference.

The idea that ranks highest among the participants is adopted as the group’s judgment.


The Dialectic Decision Method

1. A proposed course of action is generated

2. Assumption underlying the proposal are identified

3. A conflicting counterproposal is generated based on different assumptions

4. Advocates of each position present and debate the merits of their proposals before key decision makers

5. The decision to adopt either position, or some other position, e.g., a compromise, is taken

6. The decision is monitored


A Devil’s Advocate Decision Programs

1. A proposed course of action is generated

2. A devil’s advocate (individual or group) is assigned to criticize the proposal

3. The critique is presented to key decision makers

4. Any additional information relevant to the issues is gathered

5. The decision to adopt, modify, or discontinue the proposed course of action is taken

6. The decision is normal


Analyze Alternatives

  • Compare alternatives using established criteria

  • Cost-benefit analysis


Creativity


Creative Process

  • Establish opportunity or problem recognition

  • Immersion – collect/recall information and generate hypothesis

  • Incubation – subconscious manipulation

  • Insight – AHA (often during unrelated activity)

  • Verification – test it out


Enhancing Creativity

  • Create a culture of creativity

  • Reduce mental locks

  • Do Puzzles


Decision Making


Decision Making

  • Your company moves into a new skyscraper.

  • Employees complain about the long wait for elevators, especially at the start and the end of the work day.

  • You are in charge. What do you do?


Elevator Problem


Decision Making Process

  • Problem Identification

  • Develop Feasible Alternative Solutions

  • Evaluate Alternative Solutions

  • Choice and Implementation of Best

    Alternative


Classical Decision Making Approach

  • Classical or Rational Approach

  • Follows the assumptions of the

    “Rational Man” model from economics


Assumptions of Rationality

  • People have clearly defined, stable criteria

  • Preferences can change, but not randomly and continually


Assumptions of Rationality

  • People have knowledge of all relevant alternatives

  • They know every option available


Assumptions of Rationality

  • People have the ability to evaluate all alternatives

  • They have the knowledge or skill needed to understand the options


Assumptions of Rationality

  • People have self-discipline enough to follow the system of evaluation

  • They won’t stop until every option is analyzed


Behavioural Decision Making Approach

  • Does not assume people are efficient machines


Bounded Rationality

  • Assumes people have limits to their perceptual and calculative abilities


Satisficing

  • Selecting the alternative that may not be optimal, but is good enough

  • (Satisfy + Suffice = Satisfice)


Bad Decisions


Bad Decisions

“The horse is here to stay, but the automobile is only a novelty—a fad”

Bank president advising Henry Ford’s lawyer not to invest in Ford Motor Co. (1903)


Some Bank President

  • The attorney ignored the advice, bought $5,000 worth of stock, and sold it several years later for $12.5 million


Bad Decisions

“There is no reason for any individual to have a computer in their home”

Kenneth Olsen, founder of Digital Equipment Corporation (DEC)

(1977)


Bad Decisions

“Who the hell wants to hear actors talk?”

Harry M. Warner, Warner Bros.

(1927)


Bad Decisions

“We don’t like their sound. Groups of guitars are on the way out”

Decca Records, rejecting the Beatles

(1962)


Counter-Intuitive Problems

  • Our intuition can be wrong

  • Common sense can be wrong

  • Common knowledge can be wrong


The End


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