RATIONAL DECISION MAKING MODEL 1 RECOGNIZE DEFINE PROBLEM
RATIONAL DECISION MAKING MODEL 1. RECOGNIZE, DEFINE • PROBLEM • OPPORTUNITY
RATIONAL DECISION MAKING MODEL • GATHER “RELEVANT” INFO • DIAGNOSE CAUSE(S) • ASSUMPTIONS! • BE AWARE OF THEM UNDERSTAND THEM
PROBLEMS WITH DEFINING PROBLEM • • • TASK INSTRUCTIONS PERCEPTIONS “EXPERIENCE” “MENTAL SETS” JUDGEMENTAL
PROBLEMS WITH DEFINING PROBLEM(CONT’D) • • • “SOLUTION MINDED” NOT ENOUGH INFORMATION NOT ENOUGH TIME CONFUSING PROBLEM AND CAUSE(S) INITIAL “SUCCESS/FAILURE”
PROBLEMS WITH DEFINING PROBLEM(CONT’D) • LIMITED/BOUNDED RATIONALITY – LIMITED CAPACITY/CAPABILITY – SATISFICING – SEQUENTIAL ATTENTION – BARGAINING “BEHAVIORAL MODEL”
RATIONAL DECISION MAKING MODEL 2. DEVELOP ALTERNATIVES 3. EVALUATE ALTERNATIVES – UNDERSTAND CONSEQUENCES
RATIONAL DECISION MAKING MODEL 4. CHOOSE (DECIDE) 5. IMPLEMENT 6. EVALUATE, CONTROL
TYPES OF DECISIONS • PROGRAMMED – REPETITIVE – ROUTINE – HANDLED WITH DEFINITE APPROACH
TYPES OF DECISIONS • NON-PROGRAMMED – UNIQUE – NONRECURRING – HANDLED WITH CUSTOM RESPONSE
DECISION CONDITIONS • CERTAINTY – 100% SURE • RISK – REASONABLE ESTIMATE OF PROBABILITY • UNCERTAINTY – CANNOT EVEN ESTIMATE PROBABILITY
DECISION MAKING STYLES • DELIBERATE/RATIONAL • IMPULSIVE
DECISION MAKING TECHNIQUES • INDIVIDUAL • GROUP – BRAINSTORMING – NOMINAL – DELPHI
FOCUS • STRATEGIC • OPERATING • TACTICAL
TOOLS • MARGINAL ANALYSIS • COST-BENEFIT • EXPERIENCE • EXPERIMENTATION
TOOLS • MATHEMATICAL MODELS • DECISION TREE • CHARTS
SETTING PRIORITIES URGENT NOT URGENT IMPORTANT I II NOT IMPORTANT III IV
“WE SELDOME HAVE TIME FOR THE IMPORTANT BECAUSE WE ARE WORKING ON THE IMMEDIATE AND THE IMMEDIATE IS SELDOM THE IMPORTANT” - Peter Drucker
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