CHAPTER 4 (ORGANIZATION ANF MANAGEMENT)

TOPIC: DECISION-MAKING TOOLS

Problem Analysis vs. Decision Making

Problem Analysis. Investigates a situation/problem in order to allow the researcher to understand more fully
the problem, in order to recommend practical solutions for solving it.

Problem Analysis Procedure (with Format Used to write A Problem Analysis Report)
1. Problem
Identify the problem. State and describe the Problem.
2. Background
Begin by identifying the name and position of the person requesting the Problem Analysis. The person
requesting the Problem Analysis needs be an administrator or a person who holds a position in the company that
can approve your collecting of internal data, such as conducting interviews with employees, reviewing company
records, or conducting an onsite investigation.
3. Research
The research section opens with a brief introduction to the internal investigation of detailed areas of research.
The introduction must reference all areas of detailed research, in the exact order that they are discussed in the
detailed section. One area of the investigation must be employee interviews.
4. Findings
Report the results of your investigation. Discuss each area of research, in the same order that you investigated
specific areas. You must have parallel order, so the reader has easy access to reference the information.
5. Conclusions
From your findings, discuss the outcomes, what you determine are facts. Emphasize that there is a problem,
identify the problem and how your investigation supports your decision, or emphasize that there is not a
problem, identify the suspected problem and how your investigation supports you decision.
Decision Making
Decision making. Defined as the selection of the course of action from among alternatives to produce a desired
results. Decision-making is core planning. A plan cannot be said to exist unless a decision that relates to
commitment of resources, direction and reputation has been made.
Step-by-step decision-making process:

Step 1: Identify the decision

You realize that you need to make a decision. Try to clearly define the nature of the decision you must make.

Step 2: Gather relevant information

Collect some pertinent information before you make your decision: what information is needed, the best sources
of information, and how to get it. This step involves both internal and external “work.” Some information is
internal: you’ll seek it through a process of self-assessment. Other information is external: you’ll find it
online, in books, from other people, and from other sources.

Step 3: Identify the alternatives

As you collect information, you will probably identify several possible paths of action, or alternatives. You can
also use your imagination and additional information to construct new alternatives.
Step 4: Weigh the evidence

Draw on your information and emotions to imagine what it would be like if you carried out each of the
alternatives to the end. Evaluate whether the need identified in Step 1 would be met or resolved through the use
of each alternative. As you go through this difficult internal process, you’ll begin to favor certain alternatives:
those that seem to have a higher potential for reaching your goal.

Step 5: Choose among alternatives

Once you have weighed all the evidence, you are ready to select the alternative that seems to be best one for
you. You may even choose a combination of alternatives.

Step 6: Take action

You’re now ready to take some positive action by beginning to implement the alternative you chose in Step 5.

Step 7: Review your decision & its consequences

In this final step, consider the results of your decision and evaluate whether or not it has resolved the need you
identified in Step 1. If the decision has not met the identified need, you may want to repeat certain steps of the
process to make a new decision.
Approaches in Selecting Alternatives
Managers can use three fundamental approaches when selecting among alternatives in a given circumstance and
these are:
1. Experience. Reliance on past experience most likely plays a larger part than it deserves in decision-making.
Most managers use the wealth of their experience in the process of decision-making.
2. Experimentation. A process often used in scientific inquiry. One way to decide among alternatives is to try
one of them and wait for the result.
3. Research and analysis. Management practitioners agree that one of the most effective techniques for
choosing from alternatives when major decisions are involved is research and analysis.

Decision-making Styles

a. Directive

Directive individuals need and value structure. They prefer to make decisions based on clear, undisputed facts
and impersonal rules and procedures. They trust their own senses and short, focused reports from others.

b. Analytical

Analytically-minded people can process ambiguity given enough time and information. They rely heavily on
abstractions and instrumental logic, and they tend to go over all aspects of a problem with a fine-toothed comb,
carefully acquiring and organizing large amounts of data. They consider every aspect of a given problem,
acquiring information by careful analysis.

c. Conceptual

Conceptual decision makers are creative, exploratory, interested in novelty and comfortable taking risks. They
are big-picture, creative thinkers who like to consider many different options and possibilities. They gather and
evaluate information from many different perspectives, integrating diverse cues and passing intuitive judgments
as they work to identify emerging patterns.

d. Behavioral
Behavioral decision-makers focus on the feelings and welfare of group members and other social aspects of
work. They look to others for information, both explicit information in what others say and implicit information
sensed during interactions with them. They evaluate information emotionally and intuitively.

Types of Decisions

a. Programmed and Non-programmed Decisions

Programmed decisions. Are repetitive in nature. Such decisions deal with simple, common, frequently
occurring problems that have established procedures. These decisions are taken based on the existing policy,
rule or procedure of the organization.

Non-programmed decisions. Are not routine in nature. They are related to exceptional situations for which
there are no established procedure.

b. Operational and Strategic Decisions

Operational or tactical decisions. Relate to the present issues or problems. The main purpose is to achieve high
degree of efficiency. Better working conditions, effective supervision, prudent use of existing resources, better
maintenance of the equipment, etc. fall in this category.

c. Organizational and Personal Decisions:

Decisions taken by managers in the ordinary course of business in their capacity as managers are
organizational decisions.

d. Individual and Group Decisions

Individual decisions are taken where the problem is of routine nature, whereas important and strategic decisions
which have a bearing on many aspects of the organization are generally taken by a group.

Group decision making. Preferred these days because it contributes for better coordination among the people
concerned with the implementation the decision.