Decision Making and Negotiation Lecture 1

Decision Making and Negtiations skills
BA (BBA) – 601
Credit hours 3
By Muhammad Mudassar Aijaz
© 2005 Prentice Hall Inc. All rights reserved. 1–1

After studying this Sec 1.1,
you should be able to:
1. Explain what Decision making is and how it relates to the
management process.
2. 9 characterstics of decision making.
3. Paradigm in tactical decision making.
4. Factors effecting paradigm.
5. Diagram.
6. Conclusion.

Definition of Decision Making
 Decision Making
– The thought process of selecting a logical choice
from the available options.
When trying to make a good decision, a person
must weight the positives and negatives of each
option, and consider all the alternatives. For
effective decision making, a person must be able
to forecast the outcome of each option as well,
and based on all these items, determine which
option is the best for that particular situation.

9 Characteristics of good decision making
 1. Good decisions positively impact others.

This statement may seem obvious, but if it were, bad
decisions wouldn’t exist. After all, anybody who is
adversely affected by a decision immediately classifies
that decision as bad. Of course, now you just need to
find a common definition of "positive.“
 2. Good decisions are replicable.

People want to mimic a good decision like a case of
Walmart. It’s hard to imagine a world without Wal-Mart,
but before Wal-Mart became one of the largest
companies in the world, CEO / Founder, Sam Walton
 started a concept called Saturday morning meetings.
All employees would gather at headquarters early
Saturday mornings to discuss what was selling, what
wasn’t and any problems or good news that had
cropped up over the week. As a result, Sam Walton
had a pulse on the day-to-day at the store and his
people were laser focused on what was important.
Today, Wal-Mart has 10,000+ stores (including
Sam’s Club) and $447 billion dollars of revenue
annually.
 3. Good decisions foster opportunity.
An effective decision empowers others to act.

 4. Good decisions include others.
Arriving at a conclusion that serves the
company is a process. There are boxes to
check off that ensure accountabilities are
established and authorities are met.
 5. Good decisions are executable.
Integral to any decision is clarity around what
that decision is. If there’s ambiguity about
what to do next then that decision isn’t clear
enough. Clarity minimizes uncertainty, and
although this may sound like an obvious
statement, remember that what’s apparent to
you may be newfound insight to others.
 6. A good decision is systematic.
Ruling out the good criteria from the bad requires time,
resources, clear (there’s that word again) requirements
as to what the goal is and judgment to estimate the
probability of success.
 7. Good decisions are accountable.

With clarity also comes accountability. It’s not easy hiding
behind something that outlines, in detail, the roles,
responsibilities or expectations associated with a new
decision. Tack on the timeline, assets necessary and the
conditions that define success and you’re pretty much on a
one-way highway to execution without any U-turns
 8. Good decisions are pragmatic.
Humans are creatures of emotion, which
means eliminating emotion from a decision isn't
feasible. However, what can be eliminated are self-
serving emotional biases. In the SEAL Teams, for
example, there were three criteria upon which decisions
were made: The mission, the team, the individual.
Namely, who does the decision serve? Hint: The
individual comes last.
When you're faced with another difficult decision, ask
yourself, "Whom does it serve?"

 9. Good decisions involve self-awareness.
If you’re tasked with deciding how to outline your
company’s strategy for the next 10 years but you’ve
never made a strategic outline, chances are you should
defer to the next subject-matter expert. The point is, for
a decision to positively impact others, foster
opportunity or any of the aforementioned
characteristics, you need to be aware of when you’re
operating within your circle of influence and when you’re
pushing its boundaries

Paradigms in tactical decision-making
 Definition of Paradigms
In order to function in our world, each of us develops
methods and procedures for sorting through a numerus
of data which must be accurately judged in order for our
actions to be effective. Based upon our unique
individual experiences and observations, we form a
frame of reference which we use as a standard to
evaluate this huge amount of data. This frame of
reference is often referred to as a “paradigm.”
The word paradigm comes from the Greek “paradigma,”
meaning a map or pattern. A paradigm, then, is a
pattern or model which we use to quickly perceive and
evaluate data, communicate ideas and regulate
behavior.
 An example / situation of Paradigms
With a pounding heart and tear streaked cheeks, the
little boy walked nervously into the darkness. No
matter how much he had pleaded with his mother,
she had not relented. He had been told to take out
the trash hours ago, but like all little boys, had found
so many other things which had required his more
immediate attention. Now it was his bedtime and he
couldn’t procrastinate any longer. As he reached
halfway, the harsh light from the porch only made
the shadows seem darker and he grew more and
more apprehensive. He tried singing softly, but his
throat was dry and tight with dread as he nervously
approached the trash can near the garage wall.
Suddenly he saw it! Dark and mysterious, it was rising
from the ground in front of him, black against the
garage wall. He shrieked in terror and jumped back.
Instantly the thing moved with him, mimicking his every
action. He screamed with fright and throwing the trash
aside, raced frantically back to the safety of his house.
To an adult, it seems amusing for a child to be afraid of
his own shadow, but in the little boy’s mind, his actions
make perfect sense. His world is filled with magical and
mystical creatures. Some, like the Easter Bunny, the
Tooth Fairy or Santa Claus, are caring.
Presents under the Christmas tree are only one
example of the generosity and goodwill of these beings.
It is just as easy for a child to believe that other
creatures such as ghosts and goblins also exist. Lack of
proof notwithstanding, it is no harder to believe in the
Boogie Man than the Tooth Fairy. Children view the
world differently than adults, and it is not the true state
of facts, but our perception of them. that govern our
actions.

1. Paradigms provide two essential services in the

human decision-making process. Initially, they allow
an individual to quickly sort through a vast array of
incomplete, confusing and even conflicting
information. They do this by providing a framework
for comparing previous experience with what is
presently known about a situation to integrate the
factors into some understandable arrangement.
Second, they provide a method for identifying
valuable information

 A live example
The Google map used in our example is precisely what
a paradigm does in the human decision-making
process. Without some structure to evaluate their worth,
loose facts become just so much rubbish. However,
when the map became available, we could quickly sort
through a large amount of information to reach a
decision on the proper action to drive to our friend’s
house.

 A live example
Further, relationships obscured in our friend’s directions
became obvious when placed in the context of the city
map. New options were apparent. Alternate routes
could easily be determined and evaluated. The map
provided an orientation that was lacking without it.

 Paradigm are not always permanent
Two other lessons can be drawn from the illustration of the
little boy story. First,
A paradigm is a pattern or model which we use to quickly
perceive and evaluate data, communicate ideas and
regulate behavior.
paradigms are not permanent. They are always changing.
Adults interpret situations differently than children. One
person has a different view than another. Hindsight
(observation) yields a different perspective than foresight
(anticipation). Second, and even more important, is that
paradigms can be inaccurate. As the little boy in the story
matures, he’ll discover there is no Boogie Man.
Factors affecting paradigms
 Paradigms develop and change as a result of four
distinct but related factors. These are personal
experience, personal observation, communication
and training. Mostly, paradigms are shaped without
conscious effort. They evolve and change as we
become more adept in interpreting life’s incentives,
and hopefully, more effective in dealing with them.

 Training
Training is another attempt for changing our paradigms
and is the only one that requires personal effort. For
example, when new ideas, concepts or procedures are
presented, students are often told to “have an open
mind” or not to “prejudge.” This requires personal effort
to enable us to accept unfamiliar ideas without rejecting
them outright.

 Personal Observation
personal observation is by far the most important,
because all human perception is attained through one or
more of the five senses. But of all the senses, vision has
the most impact. The phrase “seeing is believing” is a
good example of the importance people place on vision in
forming opinions. It is also the most valuable in
attempting to put information into perspective quickly and
is the fundamental building block of experience

 Experience
Based upon our experiences, paradigms begin forming
at an early age. As we mature our experience becomes
broader and we become wiser. More accurately put, we
are better able to discern actions that will yield intended
results by avoiding those that have proven ineffective or
counterproductive. Experience is so powerful in forming
paradigms that it can cause other, sometimes useful,
information to be discarded. This occurs when
information is presented that is counter to what is
already believed. Experience is second only to
observation in its ability to create an impression strong
enough to create a paradigm.
 Communication
The third factor is what is communicated to us. It has
been said that human beings are the only animals able
to profit from another’s experience. Since experiences
can only be shared by communication of some sort, this
has a heavy impact in forming paradigms. This is why
briefings and debriefings play such an important role in
broadening experience and improving performance.

 Training
The last factor in forming a paradigm is training.
Training attempts to provide new skills or improve
existing ones by providing information and experience
in dealing with problems likely to be encountered. In
order for training to occur, it must be accepted. This is
the only time a conscious effort at changing a paradigm
is required since the individual seeks to improve
performance by altering his or her reactions to problems

Effects CFOs Believe Human Capital
Has on Business Outcomes

Conclusion
 The role of paradigms in crisis decision-making
is particularly vital because of the constantly
changing nature of the circumstances coupled
with severe time constraints. Crisis situations
are so dynamic that a decision delayed is often
rendered ineffective because the circumstances
will have changed. Without paradigms, the
human decision-making process would become
a jumble of incomprehensible factors and much
too cumbersome to effectively react in crisis
situations.

Video
 Live Life By Design l Create Your Paradigm
Shift
https://www.youtube.com/watch?v=mTKuzB6vd50

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Decision Making and Negtiations skills

By Muhammad Mudassar Aijaz

© 2005 Prentice Hall Inc. All rights reserved. 1–1

© 2005 Prentice Hall Inc. All rights reserved. 1–2

© 2005 Prentice Hall Inc. All rights reserved. 1–3

 1. Good decisions positively impact others.

 2. Good decisions are replicable.

© 2005 Prentice Hall Inc. All rights reserved. 1–5

 7. Good decisions are accountable.

© 2005 Prentice Hall Inc. All rights reserved. 1–8

© 2005 Prentice Hall Inc. All rights reserved. 1–9

© 2005 Prentice Hall Inc. All rights reserved. 1–13

1. Paradigms provide two essential services in the

© 2005 Prentice Hall Inc. All rights reserved. 1–14

© 2005 Prentice Hall Inc. All rights reserved. 1–15

© 2005 Prentice Hall Inc. All rights reserved. 1–16

© 2005 Prentice Hall Inc. All rights reserved. 1–18

© 2005 Prentice Hall Inc. All rights reserved. 1–19

© 2005 Prentice Hall Inc. All rights reserved. 1–20

© 2005 Prentice Hall Inc. All rights reserved. 1–22

© 2005 Prentice Hall Inc. All rights reserved. 1–23

© 2005 Prentice Hall Inc. All rights reserved. 1–24

© 2005 Prentice Hall Inc. All rights reserved. 1–25

© 2005 Prentice Hall Inc. All rights reserved. 1–26

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