Manager's Job: Understanding Decision-Making Process and Criteria, Slides of Human Resource Management

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Decision Making:

The Essence of a Manager’s Job

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Decision making

 Decision: definition  Making a choice from two or more alternatives.  The decision-making process  Identifying a problem and decision criteria and allocating weights to the criteria.  Developing, analysing, and selecting an alternative that can resolve the problem.  Implementing the selected alternative.  Evaluating the decision’s effectiveness.

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Step 1: Identifying the problem

 Problem

 A discrepancy between an existing and desired state of affairs.

 Characteristics of Problems

 A problem becomes a problem when a manager becomes aware of it.  There is pressure to solve the problem.  The manager must have the authority, information, or resources needed to solve the problem.

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Step 2: Identifying decision criteria

 Decision criteria are factors that are

important (relevant) to resolving the

problem.

 Costs that will be incurred (investments required)  Risks likely to be encountered (chance of failure)  Outcomes that are desired (growth of the firm)

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Step 4: Developing alternatives

 Identifying viable alternatives

 Alternatives are listed (without evaluation) that can resolve the problem.

Step 5: analysing alternatives

 Appraising each alternative’s strengths

and weaknesses

 An alternative’s appraisal is based on its ability to resolve the issues identified in steps 2 and 3.

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Step 6: Selecting an alternative

 Choosing the best alternative

 The alternative with the highest total weight is chosen.

Step 7: Implementing the Decision

 Putting the chosen alternative into action.

 Conveying the decision to and gaining commitment from those who will carry out the decision.

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Influences on decision making

 Escalation of Commitment

 Increasing or continuing a commitment to previous decision despite mounting evidence that the decision may have been wrong.

 The Role of Intuition

 Intuitive decision making  Making decisions on the basis of experience, feelings, and accumulated judgement.

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Decisions in the management function

 Decision making is synonymous with managing.

 Decision making is part of all four management functions: o Planning o Organising o Leading o Controlling.

 Some decisions are routine, others complex.

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