MANAGERIAL DECISION MAKING

the process by which managers respond to opportunities and threats by

analyzing options, and making decisions about goals and courses of action.
Types of Problems
1. Structure Problems
Involve goals that clear.
Are familiar (have occurred before).
Are easily and completely definedinformation about the problem is
available and complete.
!. "#structure Problems
roblems that are new or unusual and for which information is ambiguous
or incomplete.
Types of Dec$s$o#s
1. Pro%r&mme ec$s$o#s
A decision made in response to a situation that has occurred often enough
to enable decision rules to be developed and applied in the future.
A repetitive decision that can be handled by a routine approach.
Types of Pro%r&mme Dec$s$o#s
Pol$cy
A general guideline for making a decision about a structured
problem.
Proceure
A series of interrelated steps that a manager can use to respond
(applying a policy) to a structured problem.
Rule
An e!plicit statement that limits what a manager or employee
can or cannot do.
roblems that will re"uire custom#made solutions.
2. No#'pro%r&mme ec$s$o#s
A decision made in response to a situation that is uni"ue, is poorly defined
and largely unstructured, and has important conse"uences for the
organization.
$ecisions that are uni"ue and nonrecurring.
$ecisions that generate uni"ue responses.
Types of Problems &# Dec$s$o#s &# Le(el $# t)e Or%&#$*&t$o#
Dec$s$o# M&+$#% Co#$t$o#s
Cert&$#ty
All of the information the decision maker needs is fully available
A situation in which a manager can make an accurate decision because the
outcome of every alternative choice is known.
R$s+
A decision has clear goals and good information is available, but the future
outcomes associated with each alternative are sub%ect to chance.
A situation in which the manager is able to estimate the likelihood
(probability) of outcomes that result from the choice of particular alternatives.
"#cert&$#ty
&anagers know which goals they wish to achieve.
Information about alternatives and future events is incomplete.
&anagers may have to come up with creative approaches to alternatives.
'imited information prevents estimation of outcome probabilities for
alternatives associated with the problem and may force managers to rely on
intuition, hunches, and (gut feelings).
Appro&c)es $# ec$s$o# m&+$#% u#er u#cert&$#ty
M&,$m&,- the optimistic manager*s choice to ma!imize the
ma!imum payoff
M&,$m$#- the pessimistic manager*s choice to ma!imize the
minimum payoff
M$#$m&,- the manager*s choice to minimize ma!imum regret.
Amb$%u$ty
+he goals to be achieved or the problem to be solved is unclear
Alternatives are difficult to define
Information about outcomes is unavailable.
Co#$t$o#s T)&t Affect t)e Poss$b$l$ty of Dec$s$o# .&$lure
,eferences-
http-..www.studyblue.com.notes.note.n.robbins/0ch01ppt.file.2324/4
http-..www.slideshare.net.moonee.decisionmaking#the#essence#of#the#managers#%ob#
/5311456
http-..www.slideshare.net.dasaritapaswi.foundations#of#decision#making
http-..www.studyblue.com.notes.note.n.robbins/0ch01ppt.file.2324/4
http-..kfknowledgebank.kaplan.co.uk.7879.:iki;/0ages.&a!ima!,;/0ma!imin;/0and
;/0minima!;/0regret.asp!