Decision Making &

Problem Solving
Group no. 3
Presented by:

Ahamed Fayaz (4D)

Ayush Kumar Gupta (13D)
Nisha Iyer (27D)
Sanchi Soral (36D)
Sandeep Das (37D)
Subhojit Basak (45D)
Yash Wani (51D)
 What is Decision Making?
• Decision Making is the process of choosing the right course of action from the available alternatives.
• It is a continuous process running in the subconscious human mind.
• An average human mind makes 35,000 conscious decisions everyday.
Decision Making Cycle

Action-Outcome
Goal Setting Alternative Action Value of Outcomes Make a Decision
Probabilities
Decision Making Types

Programmed Decision NonProgrammed Decision

Dunkirk, 1940
 Types of Decision

Programmed Non Programmed

Type of decision Well Structured Poorly Structured

Frequency Repetitive & routine New & Unusual

Goals Clear, specific Vague

Information Readily Available Not available

Consequences Minor Major

Organizational Level Lower Levels Upper Levels

Time for solution Short Relatively Long

Basis for solution Decision Rules, set procedures Judgement & Creativity
Rational Decision Making
Strengths and Weaknesses of the Rational Approach This approach has several strengths.
It forces the decision-maker to consider a decision in a logical, sequential manner and an in-
depth analysis of alternatives helps him to choose on the basis of information rather than
personal prejudices, emotions or social pressure. Its weaknesses are that the manager does
not always have perfect information, faces time and financial constraints, may have limited
ability to process information and may not be able to predict future accurately. Also, all the
alternatives cannot be quantified making comparisons difficult
1. State the Situational Goal: A goal is stated for particular situation. It can be used as a standard in
determining the decision to be made later on.
2. Identify the Problem: It involves understanding the nature, magnitude and causes of the problem. The
purpose of problem identification is to collect information that has a bearing on the goal. If there is a
discrepancy between the actual situation and the goal, action may be required.
3. Determining Decision Type: Now decision- makers must determine if the problem requires a programmed
or a non-programmed decision. If a programmed decision is required, an appropriate decision rule is invoked,
and a choice is made from the available alternatives.
4. Generate Alternatives: Alternatives are generated by decision maker based on the academic & professional
education, experience and knowledge about the situation. Information may be sought from colleagues,
subordinates, experts and superiors. Decision-makers may analyze the symptoms of the problems for clues
or rely on their own intuition or judgement to generate alternative solutions.
5. Evaluate Alternatives: Each alternative is assessed based on its Strengths & weaknesses, costs & benefits,
as well as, possible negative consequences keeping in mind predetermined decision criteria. The ultimate
decision criterion is whether a particular decision will bring the decision maker nearer to goal.
The evaluation process usually includes: (a) Describing the anticipated outcomes of each alternative,
(b) Evaluating the anticipated costs of each alternative, and (c) Estimating the uncertainties and
risks associated with each alternative.
6. Choose an Alternative: It involves selecting the best alternative with maximum positive consequences, least
or no negative outcomes, less risks and minimum costs. The expected value of each alternative is
determined and the alternative with the largest expected values is selected.
Contingency plans are alternative actions to take if the primary course of action is unexpectedly
disrupted or rendered inappropriate. Planning for contingencies is part of the transition between choosing
the preferred alternative and implementing it.
7. Implementing the Plan: Once a decision is formally accepted, an authorisation is made for its
implementation. Implementation puts the decision into action and involves communicating the decision,
gathering support for and acquiring and assigning resources to ensure that it is carried out. It builds on the
commitment and motivation of those involved in the decision-making process..
8. Control: This is the final stage of rational decision-making process, wherein, the outcomes of the decision
are measured and compared with the predetermined, desired goals. If there is a discrepancy between the
two, the decision-maker may restart the process of decision-making by revising/modifying/setting new goals.
Evidence Based Decision-Making is a process for making decisions about a program, practice, or policy that is grounded in the
best available research evidence and informed by experiential evidence from the field and relevant contextual evidence.
Five steps-based approach is used:
1. Face the facts
2. Committed to fact-based decision making
3. Encourage experimentation by treating your organization as an unfinished prototype
4. Look for risks and drawbacks in what people recommend
5. Avoid decisions on strongly but strongly held beliefs
 Behavioural Approach
Emotions Logic/Rational

You wake up in the morning and its 8:50AM.

You have a class at 9:00AM.
What do you do?
 Administrative Model & Bounded Rationality

Procedures & rules Satisficing

Responsive constructs & past experiences give Examining alternatives only until a solution
rise to recommended actions decision takers that meets minimal requirements is found
must follow

Suboptimizing
Accepting less than the best possible outcome
to avoid unintended negative effects on other
aspects of the organization
 Other Behavioural Forces

Political forces Intuition Escalation of Risk propensity

Commitment

Ethics Prospect theory

 Analytical
approach

Fact:
In practice, hybrid of
• Rational
• Behavioral &
• Integrated
approaches are used to make
the tough day-to-day decisions
in running organizations
 Think about it!
Managers who make decisions very quickly probably
are using equal, or more, information and
generating and evaluating as many alternatives as
slower, more methodical decision makers
 Group Polarization Group Think
Smoking
Smoking is Smoking
kills should be
bad
banned
• Tendency to make extreme ● Mode of thinking when
decisions aligning towards group members of a group involve in
a deeply cohesive in-group
decisions ● Unknowingly unanimous
• Enhances group’s prevailing decisions taken by the group
attitudes through discussion ● Individual members having a
separate opinion do not raise
• If the group is like-minded, it
NEUTRAL EXTREME objections
strengthens the prevailing
opinions and attitudes
e Discount
yb e Invulnerability
a
M ar Agree

e
Ag warnings

re
y
the ght re

Ag
ri e Unquestioned
Stereotyped
belief

Illusion of
Pressure
Unanimity

Self- Self-appointed
censorship mindguards
 Group Problem Solving

● Mainly used during Idea generation phase

● Record each and every idea of each member on a Flip Chart

01 Brainstorming ●
●
Evaluation of alternatives
Helps in generating comprehensive list of innovative
alternatives

● Each individual writes down the list of ideas without any

discussion
The Nominal ● Report the ideas one at a time in front of the group and

02 Group
Technique ●
discuss the ideas
Members privately vote or rank the ideas based on
preference
● Vote cycle can continue until common decision is reached

● Useful when experts are physically dispersed, there is

difficulty in communication or there is trouble reaching

03 The Delphi
Technique ●
common consensus due to extremities
Questionnaire with questions to deal with the questions are
floated in the group
● Summarization of responses by the manager

Evaluate solutions Implement and

Define the problem Analyze the problem Generate the solution
assess the solution
 W
cre hat is
ativ
ity?

What people tend to believe – What it actually is – Gutenberg’s Printing Press

Out of the box idea, related to
literature and arts, spark of
Genius
Borrowed ideas, deliberate
process, involved in every Manufacturing of Lipitor
domain ranging from science
to business to arts
Invention of iPad

Defining

CREATIVE Enhancing Borrowing

Creative
PROCESS decisions
through
borrowed
PREPARATION INCUBATION INSIGHT VERIFICATION ideas
Judging Combining

Incubating
 Common traits of creative individuals Enhancing Creativity in Organizations
•Explicit Goals (3M)
• Background Experiences and Creativity
a. Mozart •Reward creative successes
b. Thomas Edison •Not punish creative failures
c. Narendra Modi

• Personal Traits and Creativity

a. Attraction to complexity
b. Openness
c. Energetic
d. Independent
e. Self- confident (Fake it till you make it)

• Cognitive Abilities and Creativity

a. Intelligence may be a precondition for
individual creativity
b. Divergent thinking
c. Convergent thinking
d. Creativity = Divergent + Convergent
THANK YOU!