Chapter 10

                        Chapter 10 Notes

Decision Making: The process of formulating, considering various solutions, selecting alternatives, and then implementing them.

The General Analytical Model describes the process of decision-making by incorporating three phases.

1. Decision Formulation- the process of coming to understand the nature of the problem being confronted.
2. Decision Consideration- the process of determining and selecting a possible decision to solve the problem.
3. Decision Implementation- the process of carrying out the decision that has been made as to solve the problem.

Decision Formulation takes three main steps:

1. Identifying the problem: In order to solve a problem, one must first acknowledge its existence.
2. Defining the Objectives- After the problem is identified, the next step is to define the objectives to be met to solve the problem. It is important to conceive of a problem in such a way that possible solutions can be indentified.
3. Making a predecision - a predecision is a decision about how to make a decision.  Examples: hiring an ad hoc group to asses the problem, hiring an outside consultant, delegating the decision to the company’s accountant; or deciding to take on the problem yourself.

• Decision support software: software that distill social science knowledge onto databases that are consulted to guide decisions.  Decision support software’s are used when making decisions your self.

Decision Consideration takes the next three main steps

1. Generating Alternatives- In this stage, possible solutions to the problem are identified.
2. Evaluating alternative solutions: this stage is set to pick the best solution from among the alternatives in step 4. Upon considering options, some might seem better than the others. Example: although increasing sales would help solve the problem, it’s easier said than done. Borrowing money might help, but all it might do is forestall the problem until the next payroll period- and create even greater needs for cash when the time comes to repay loans.
3. Making a choice – after several alternatives are evaluated, one must make a choice.

Decision Implementation Process takes the following steps after decision consideration.

1. Implementing the decision- carry out the chosen decision.
2. Following up- this is the final step of the decision making process that involves following up with the current situation. Did the decision work as planned? If so, the problem is solved. If not, a new solution will have to be attempted, and the process is repeated.

Programmed decisions: These are routine decisions made by lower level personnel that rely on predetermined courses of action.