Decision Making

Presented By;
Rupali Singh
 OBJECTIVES:

At the end of the presentation, students will be able to;

 To define decision making.

 List down the types of decision making .

 Discuss decision strategies and basis for decision making .

 Discuss factors affecting decision making & steps.

 Describe decision making authorities.

 Explain models & tools of decision making.

 Enlist advantages of decision making .
 A decision can be
defined as: “a course of
action purposely chosen
from a set of alternatives
to achieve organizational
or managerial objectives
or goals”.
 Definition
• Decision making is a systematic process of choosing among alternatives
and putting the choice in to action.
-Lancaster and Lancaster
• Decision making is a necessary component of leadership, power, influence,
authority and delegations.
-John 1993

• A decision is a choice made between two or more available alternatives.

Decision making is the process of choosing the best alternative for
reaching objectives.
- (Samuel C. Certo, 2003)
Types of decision making

There are • Mechanistic decision

4 • Analytical decision
manageria • Judgmental decision
l decisions • Adoptive decision
Nursing Administration decision making
According to Ann Bill Taylor :
a. Non routine decision: made by directors of nursing. The outcome of
the problem will be unpredictable.
b. Routine decision: made by mid level and low level managers, the
outcome will be predictable. Eg. Assigning the duty roster, assign the
security laws.
Decision Strategies
• Optimizing
• Satisfying
• Opportunistic
• Do nothing
• Precautionary
• Evolutionary

• Chameleon
Time and basis for decision making
There are six important bases for decision making which are referred to
as aids to decision making and they include ;

I. Experience,
II. Authority,
III. Facts,
IV. Intuition,
V. Research & Analysis
VI. Experimentation.
 Factors

Internal External
• Decision maker’s physical & • Cultural environment
emotional status • Social background
• Personal characteristics & values • Poor communication
• Past experiences & interest • Time
• Knowledge & attitude • Cooperation & Coordination
• Self awareness
• Energy & creativity
• Resistance to change
 Steps
Establishing goal and objectives

Making the diagnosis

Analyzing the problem

Searching alternative solution

Selecting best possible solution

Putting the decision into effect

Following up the decision

 Decision making authorities;
(Individual,Group, Committees).
Individuals as decision makers: The autocratic manager‘s fears that decisions
made by others may be more costly, less effective and represents a threat to his/
her position.
There are mainly 3 behavioural characteristics that influence the decision making.
 Perception of the problem: it is affected by ones previous experience and value
system.
 Personal value system: basic convictions about what is right, good or
desirable.
 The role theory: it predicts how actions will be performed in certain roles and
how it will be affected certain circumstances.
• Group comprises two or more people who share common interest and come together
to accomplish an activity through face to face interaction.

 Advantages of group participation

 Increasing self-expression, innovation and development.
 Increases the commitment. Disadvantages of group participation
 Change in the participants may create problems.
 Few people may dominate in the group.
 Members may become more interested in arguments and winning than finding a
solution.
 The decisions can be most acceptable but not optional.
Committee Aspects in Decision Making:
• A committee a group of people chosen to deal with a particular topic
or problem. It can be formal or informal committee.

Advantages of decision making by committee

 Time consuming
 Expensive
 Indecisiveness can be result in the adjournment of the committee.
Models of decision making
1. The Normative Model

2. The Decision Tree Model

3. The Descriptive Model

4. The Strategic Model

5. Optimizing Model

6. Satisfying Model
The Normative Model
1. This model is at least 200 years old. It is assumed to maximize satisfaction and fulfils
the ―perfect knowledge assumption‖ that‖ in any given situation calling for a decision,
all possible choices and the consequences and potential outcome of each are known.
 Seven steps are identified in this analytically precise model:
a. Define and analyze the problem.
b. Identify all available alternatives.
c. Evaluate the pros and cons of each alternative.
d. Rank the alternatives.
e. Select the alternative that maximizes satisfaction.
f. Implement.
g. Follow up.
 The normative model for decision making is unrealistic because of its
assumption that there are clear-cut choices between identified
alternatives.
 Vroan and Yelton‟s Normative Model- They define decision making
as a social process and emphasis how mangers work rather than should
behave in their normative way.
 It is used when information is objective, the problem is structured, and
options are known and predictable.
 The Decision Tree Model
• Various adaptations of decision tree analysis are found
in the literature; the essential elements described in the
1960s are standard.
 All factors considered important to a decision can be
represented on a decision tree.
 Vroom arranged answers to seven diagnostic
questions in the form of a decision tree to identify
types of leadership style used in management decision
making models.
 The questions focus on protecting the
quality and acceptance of the decision and
deal with adequacy of information, goal
congruence, structure of the problem,
acceptance by subordinates, conflict,
fairness, and priority for implementation.
 Magee and Brown depict decision trees as
starting with a basic problem and use
branches to represent ―event forks and
―action forks.
The Descriptive Model;
 Simon developed the descriptive model based on the assumption that the
decision maker is a rational person looking for acceptable solutions based on
known information.
 This model allows for the fact that many decisions are made with incomplete
information because of time, money, or people limitations, and the cause of
time, money, or people limitations, and the fact that people do not always
make the best choices.
 Simon wrote that few decisions would ever be made if we always sought
optimal solutions.
Steps in the descriptive model are as follows:
a. Establish acceptable goal.
b. Define subjective perceptions of the problem.
c. Identify acceptable alternatives.
d. Evaluate each alternative.
e. Select alternative.
f. Implement decision.
g. Follow up.
The Strategic Model

 Strategic decision making usually relates to long-range planning.

 Nagelkerk and Henry used a model designed by Mintzberg, Raisinghani, and
Teoret (the MRT model) to design and test the nature of strategic decision
making that entailed substantial risk.
 In applying this model, participants used mixed scanning of general and
specific information from subordinates to identify complex problems.

 To develop potential solutions, they gathered facts from hospital documents.

 They made their selection of the single best solution by ;
 Screening solutions using predetermined criteria
 Identifying the costs and benefits as nearly as possible, and
 Selecting the single best solution.
Optimizing Model
 Decision maker select the solution that maximally meet the objective
for a decision. Usually this process involves assessing the pros and
cons of each known outcomes as well as listing benefits and costs
associated with each option.
 The goal is to select the most ideal solution.
 This process is most expedient and may be the most appropriate when
time is an issue.
Satisfying Model
 Decision maker selects the solution that minimally meets the
objective for a decision.
 It is more conservative method compared to an optimizing approach.
This process is most expedient and may be the most appropriate when
time is an issue.
Tool of decision making;
• Judgemental technique
• Operational research technique
• Delphi technique
• Decision tree
A. Judgmental technique
a) This is the oldest technique and subjective in decision making.
b) Based on past experience and intuition about future.
c) Useful in making routine decision.
d) Cheap and not time consuming.
e) Hazardous due to a chance for taking wrong decision.
f) Rarely used in large capital commitments.
B) Operational Research Technique (OR)
 It can be defined as the analysis of decision problem using scientific method to
provide manager the needed quantitative information in making decision.
 Operational research makes the decision analytic, objective and quantitative
based.
 Steps of OR technique
 Construction of mathematical model that pinpoints the important
factor in the situation.
 Definition of criteria to be used for comparing the relative merits of
various possible courses of action.
 Procuring empirical estimates of the numerical parameters in the
model that specify that particular situation to which it is applied.
 Carrying out through the mathematical process of finding and series of
action which will give optimal solution.
 Types of Operational Research Technique

 Linear programming: Uses linear mathematical equations to determine the best

way to use limited resources to achieve maximum results. This technique is
based on the assumption that a linear relationship exists between the variables
and the limits of variation can be calculated.
 Games theory: In normal games, each player or group of player tries to choose a
course of action which will frustrate opponent‘s action and help in winning the
game. The same will apply in the context of business by maximize his loss.
 Programme evaluation and review technique (PERT): PERT is a network
system model for planning and control under certain conditions. It involves
identifying the key activates in a project, sequencing the activities in a flow
diagram, and assessing the duration for each phase of work.
 Critical path method (CPM): Closely related to PERT. Critical path method
calculates a single time estimate for each activity, the longest possible time.
CPM is useful where the cost is a significant factor.
 Computers in decision making: In management information system computers
can be used for various activities like patient classification system, supplies and
material management system, staff scheduling, policy and procedure changes and
announcements, patient charges, budget information and management, personal
records, statistical reports, administrative reports and memos etc.
C) Delphi technique:
• It allows members who are dispersed over a geographic area to participate in
decision making without meeting face to face.
• This is possible through the use of questionnaire. The members will return the
questionnaires anonymously; the results of the first questionnaire are centrally
compiled and sent to each member. Again the members are asked for suggestions.
D) Decision trees:
 A decision tree is a graphic method that can help
the supervisor in visualizing the alternatives
available, outcomes, risk and information needs
for a specific problem over a period of time.
 It helps to see the possible directions that actions
may take from each decision point and to evaluate
the consequences of a series of decisions.
 The process begins with a primary decision
having at least two alternatives. Then the
predicted outcome of each decision considered
and the need for further decision is contemplated.
 • It is characterized by order and direction
that enables managers to determine where
Advantage they are.
s of • Provide a frame work data gathering
which is relevant to the decision.
decision • Allows application of previous
knowledge and experience that minimizes
making errors & improve quality of care
• Increases confidence.
 Summary
• Definition
• Types
• Strategies
• Steps
• Basis
• Factors affecting
• Authorities
• Models
• Tools
• advantages
 ASSIGNMENT
• Topic: Model of decision making
• Submission date : 20.12.2020.