2.I Putu Astawa (1506205043) 3.Rade Christiawati Sitorus (1506205058) 4.Ketut Adi Ananta S. (1506205088) Theory of Making Decisions
Decision - a choice whereby a person
comes to a conclusion about given circumstances / situation. Decision making - making choices among alternative courses of action which may also include inaction . Understanding Making Decisions It is a solution selected after examining several alternatives chosen because the decider foresees that the course of action he selects will do more than the others further his goals and will be accompanied bye the fewest possible objectionable consequencesManely H. Jones Decision-making is the selection based on some criteria from two or more possible alternatives. George R.Terry
A decision can be defined as a course of action
consciously chosen from available alternatives for the purpose of desired result J.L. Massie
A decision is an act of choice, wherein an
executive forms a conclusion about what must be done in a given situation. A decision represents a course of behaviour chosen from a number of possible alternatives. D.E. Mc. Farland Process of Making Decisions According to Dewey and Simon, problem-solving consists of five following stages: Identification of the problem
Obtaining necessary information
Production of possible solutions
Evaluation of such solutions
Make the decision
Example Amy really wants a new Cell phone. Unfortunately ,the one she wants costs $1.500, and she has only $1.000. She wonders how she will get the rest of money. Step 1 : Identification the problem
Amy dont have
enough money to buy Cell phone she wants Step 2 : Obtaining necessary information
1. Looking for another
....Cell phone price 2. Looking for ....someone who will ....give him some loan Step 3 : Production of possible solutions
1.Save her money until shes has got
enough money 2.Borrow money from her parents or friends 3.Buy a cheaper one. Step 4 : Evaluation of such solutions 1.Save Her Money until shes got enough money.
She will feel proud about her decision, she
will get the Cell phone she really wants She has to wait Step 4 : Evaluation of such solutions 2. Borrow money from her parents or friends
Amy will get the cell phone right away.
She Wont fell independent, maybe friends
or parents will say NO Step 4 : Evaluation of such solutions 3. Buy a cheaper one.
Amy will get the cell phone right away.
She Wont get the phone that she really
wants Step 5 : Make The Decision
And Than, Amy Decided to wait until she has enough money to buy cell phone that she really want. Types of Decisions
Traditionally, organizations count on three
different types of decisions: Strategic relating to the identification of long-term or overall aims and interests and the means of achieving them Organizational relating to the way different aspects and parts of a group are arranged with the aim of being more orderly and efficient Operational relating to Most groups seek a maximum of the way a group or participation and agreement for strategic organization works on a decisions, while letting operational daily basis decisions be made in small groups or work teams. the Manager as Decision Maker
1. A decision maker who was perfectly
rational would be fully objective and logical. He or she would define a problem carefully and would have a clear and specific goal. 2. Further, the decision maker is aware of all the possible consequences of each alternative. such as : - Clear preferences. - Constant preferences. - No time or cost constraints. 3. Those assumptions of rationality apply to any decision. Because we're concerned with managerial decision making in an organization, however, we need to add one further assumption. Rational managerial decision making assumes that decisions are made in the best economic interests of the organization. That is, the decision maker is assumed to be maximizing the organization's interests, not Ms or her own interests. -Known options. It is assumed that the decision maker is creative, can identify all the relevant criteria, and can list all the viable alternatives. Further, the decision maker is aware of all the possible consequences of each alternative.
- Clear preferences. Rationality
assumes that the criteria and alternatives can be ranked according to their importance. -Constant preferences. In addition to a clear goal and preferences, it's assumed that the specific decision criteria are constant and that the weights assigned to them are stable over time.
- No time or cost constraints. The rational decision
maker can obtain full information about criteria and alternatives because it's assumed that there are no time or cost constraints. --Maximum payoff. The rational decision maker always chooses the alternative that will yield the maximum payoff. Conclusion
Decision making is an indispensable part of life.
There are five process in decision making that help you to find the right solution. Also there are three type of decisions as your additional knowledge that you must to know. Manager as a decision maker who was perfectly rational would be fully objective and logical in the decision making process that would consistent lead forward selecting alternative that maximizes the likelihood of achieving the goal.