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

REARRANGE “NEW DOOR” TO MAKE ONE WORD.

IN WHAT ORDER ARE THESE NUMBERS? 854917632

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