DECISION MAKING n n n Decision making is
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DECISION MAKING n n n Decision making is the developing concepts leading to the selection of a course of action among variations. Every decision making process produces a final choice It can be an action or an opinion. It begins when we need to do something but we do not know what e. g. Decision to raise a Purchase Order
Decision making in business and management In general, business and management systems should be set up to allow decision making at the lowest possible level. Several decision making models or practices for business include: – SWOT Analysis - Evaluation by the decision making individual or organization of Strengths, Weaknesses, Opportunities and Threats with respect to desired end state or objective. – Buyer decision processes - transaction before, during, and after a purchase • • • Corporate finance: The investment decision The financing decision The dividend decision working capital management decisions – Cost-benefit analysis - process of weighing the total expected costs vs. the total expected benefits
Types of Decisions n Unstructured/ Nonprogrammed n Structured/ Programmed n Semi-structured
Information Requirements of Key Decision-Making Groups in a Firm
The Decision-Making Process Phases of Decision Making Process ØIntelligence ØDesign ØChoice ØImplementation
Stages in Decision Making
Phases of Decision Making Process n Intelligence gathering – Definition of problem – Data gathered on scope – Constraints identified n Design phase – Alternatives identified and assessed n Choice – Selection of an alternative n Implementation – Testing the selected alternative.
