HBO Decision Making

Decision
Making
Report Objectives
What is decision making in an

organization
Types of decisions
Factors affecting effective decision

making
Decision making models
Steps in decision making
Individual vs group decision making
Importance of decision making

Decision Making
Identifying and choosing solutions that lead to a

desired end result
Decisions making in organization occurs at all

levels.
It includes diverse processes that are all

intermediate steps between thought and action.
They are the antecedents to behavior.

Types of Decision
2.Non-Programmed
Decision – is a decision
1.Programmed Decision –
that recurs infrequently
is a decision that recurs
and for which there is no
often enough for a decision
previously established
rule to be developed.
decision rule and it
requires problem solving.
Characteristics of Programmed and Non-
Programmed Decisions
What Can Affect Effective Decision Making?
Perception Issues Clashing Stress Communication Laws and Ethics

Personalities Problems
What Can Affect Effective Decision Making?
 Perception Issues-A person's perception and attributions can alter many of their actions. This can
prove to be an issue if there is a difference between what the person perceives and what the
reality of the situation is.
 Clashing Personalities-People who do not get along for whatever reason will often make their
decisions in a way that negatively impacts the other.
 Stress-When you're stressed, you're not thinking clearly and your decision making abilities can be
impeded. Stress is distracting and a person who is stressed out may not be able to concentrate or
consider the details of the situation they are faced with in order to make an appropriate decision.
 Communication Problems-Sometimes the reason why a person does not have all the necessary
information to make a sound decision is because of communication issues. In teams, poor
communication can impact individual decisions and decisions the team makes as a whole.
 Laws and Ethics-As stated previously, there can be legal and ethical restrictions in decision
making that can cause a somewhat simple choice to become complex. It is the responsibility of
the person making the decision to follow these restrictions. If they fail to, then it is their
responsibility to deal with the consequences-which may include jail and fines in serious
circumstances.
Decision environments include:
Certain environments
 Exist when information is sufficient to predict the results of each alternative in advance of
implementation.
 Certainty is the ideal problem solving and decision making environment.
Risk environments
 Exist when decision makers lack complete certainty regarding the outcomes of various courses of
action, but they can assign probabilities of occurrence.
 Probabilities can be assigned through objective statistical procedures or personal intuition.
Uncertain environments
 Exist when managers have so little information that they cannot even assign probabilities to various
alternatives and possible outcomes.
 Uncertainty forces decision makers to rely on individual and group creativity to succeed in problem
solving.
Rational model
Non-Rational model
Organizational
decision making Garbage can model
models:
Political model
Simon’s Normative model

Rational Model
 Logical approach to decision making
 Based on premise that decision making is not rational
Assume that:
Non-Rational  Decision making is uncertain
Model  Not all information is available or known

 Making optimal decisions is difficult
The garbage can model was developed to
describe the pattern of decision making in
organizations that experience extremely high
uncertainty
The garbage Decision making is sloppy and haphazard

can model
Decisions are made as a result of the
interaction between: Problems, solutions,
participants, and choice opportunities
Political model
Companies in the political model often known as instrumentalists, do
not focus on a single issue but on many intra-organizational problems
that reproduce their individual goals.
The political model does not undertake that decisions result from
applying existing standard operating procedures, programs, and
routines. Decisions result from bargaining among coalitions.
In this model, power is decentralized. This notion of decision making
as a political process highlights the natural multiplicity of goals,
values, and interests in a complex environment.
The political model views decision making as a process of conflict
resolution and consensus building and decisions as products of
compromise.
 Decision makers are guided by bounded
rationality - constraints that restrict
Simon’s decision making
Decision making is characterized
Normative  Limited information processing
Model  Satisficing - Choosing a standard that
meets a minimum standard of
acceptance
The decision-making process involves the
following steps
1 2 3 4 5 6 7
Define the Identify Develop Analyze the Select the Implement Establish a
problem. limiting potential alternatives. best the control and
factors. alternative decision. evaluation
alternative.
s. system.
Availability heuristic – use information readily available in memory
Representativeness heuristic – using similar situations to predict the occurrence of

an event
Confirmation bias – decide before investigating then seek confirming evidence
Decision Anchoring bias – decisions are influenced by initial information, data, stereotypes
Making Bias Overconfidence bias – tendency to be overconfident about estimates or forecasts
Hindsight bias – knowledge of an outcome influences our belief about the

probability that we could have predicted the outcome earlier
Framing bias – tendency to consider risks about gains differently than risks about
losses
Escalation of commitment bias – tendency to stick to an ineffective course of

action when it is unlikely that the bad situation can be reversed
How can the decision-making
process be managed?
 Deciding who should participate.
 Authority decisions-Made by the manager or team leader
without involving other people and by using information that
he/she possesses.
 Consultative decisions-Made by one individual after seeking

input from group members.
 Group decisions-Made by all members of the group.

Brainstorming
•Topic
•Take turns sharing ideas
•Record each idea
•No comments/criticisms
•Keep the tempo moving
•One idea per turn
•Members may pass
•Keep going until ideas are exhausted
The Nominal Group Technique
A generic name for face-to-face group techniques in which instructions are given to
group members not to interact with each other except at specific steps in the
process.
•Silent idea generations,

•Round-robin sharing of ideas,
•Feedback to the group,
•Explanatory group discussion,
•Individual re-assessment, and
•Mathematical aggregation of revised
judgements.
Affinity Diagram
Definition: A group decision-making technique designed to sort a large number of ideas,
process variables, concepts, and opinions into naturally related groups. These groups are
connected by a simple concept.
Purpose: To sort a list of ideas into groups.
Guidelines:
Insure ideas are described with phrases or sentences.

Minimize the discussion while sorting
Aim for 5-10 groups.
If one group is much larger than others, consider splitting it.
Delphi Technique
•Problem stated
•Questionnaires
•Anonymous & Independent
•Compile results
•Distribute copies of results
•New round begins
•Does not require physical
presence
•Time consuming
Electronic Meetings
•Horseshoe-shaped table
•Up to 50 participants
•Issues are presented
•Responses typed
•Projection screen display
•Anonymity, honesty, & speed
•55% faster than traditional
•Lacks credit
•Fastest typist gets there first
•No face-to-face interchange
Decision Making Style
The Quality, Timeliness, Acceptance, and Ethical
Appropriateness of a Decision Influence its
Effectiveness
Ethical
Quality + Timeliness + Acceptance +
Appropriateness
References
 https://www.civilserviceindia.com/subject/Management/notes/organizational-processes-decision-
making.html
 https://www.slideshare.net/jonrwallace/ob-decision-making
 https://www.scribd.com/doc/23315094/Human-Behavior-in-Organization
 https://www.universalclass.com/articles/business/the-importance-of-decision-making-in-
understanding-organizational-behavior-in-business.htm
 http://www.assignmentpoint.com/business/management/decision-making-style.html
 https://www.google.com.ph/search?biw=1366&bih=651&tbm=isch&sa=1&ei=nLGKXMPqCorqvgTXmr
nQDA&q=individual+and+group+decision+making&oq=individual&gs_l=img.1.1.0j0i67j0l4j0i67j0l3.9
8412.101022..103029...0.0..0.140.1253.0j10......0....1..gws-wiz-
img.....0.TVLuZP7NATo#imgrc=bU9jJYMqjyMDYM:
 https://www.google.com.ph/search?biw=1366&bih=651&ei=B7qKXJOfDsue9QPAj5_QCw&q=decision
+making+in+human+behavior+in+organization+delphi+technique+ppt&oq=decision+making+in+huma
n+behavior+in+organization+delphi+technique+ppt&gs_l=psy-
ab.3...13109.18874..19111...0.0..0.193.2318.0j17......0....1..gws-wiz.......0i71j33i10.lz0lNk4TMNI

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Decision

What is decision making in an

Factors affecting effective decision

Decision making models

Steps in decision making

Individual vs group decision making

Importance of decision making

Identifying and choosing solutions that lead to a

Decisions making in organization occurs at all

It includes diverse processes that are all

They are the antecedents to behavior.

Perception Issues Clashing Stress Communication Laws and Ethics

Simon’s Normative model

Model  Not all information is available or known

The garbage Decision making is sloppy and haphazard

Representativeness heuristic – using similar situations to predict the occurrence of

Confirmation bias – decide before investigating then seek confirming evidence

Making Bias Overconfidence bias – tendency to be overconfident about estimates or forecasts

Hindsight bias – knowledge of an outcome influences our belief about the

Escalation of commitment bias – tendency to stick to an ineffective course of

 Consultative decisions-Made by one individual after seeking

 Group decisions-Made by all members of the group.

•Silent idea generations,

Purpose: To sort a list of ideas into groups.

Insure ideas are described with phrases or sentences.

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