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Week 2 Part 2 Decision Making

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14 views4 pages

Week 2 Part 2 Decision Making

Uploaded by

Jeoferson Jose Valdez
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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The Rational Decision-Making Process

The rational decision-making process involves careful, methodical steps. The more
carefully and strictly these steps are followed, the more rational the process is. We’ll
look at each step in closer detail.

Step 1: Identify the Problem

Though this starting place might seem rather obvious, a failure to identify the problem
clearly can derail the entire process. It can sometimes require serious thought to find
the central issue that must be addressed. For example, you have taken a new job and
you may initially decide you need to find a new car for commuting back and forth from
work. However, the central problem is that you need a reliable way to commute to and
from work.

Step 2: Establish Decision Criteria

CE 135 – Engineering Management | 1


In this step, the decision maker needs to determine what is relevant in making the
decision. This step will bring the decision maker’s, and any other stakeholder’s,
interests, values and preferences into the process. To continue our example, let’s
assume you are married. Some of the criteria identified might include budget, safety,
functionality, and reliability.

Step 3: Weigh Decision Criteria

Because the criteria identified will seldom be equally important, you will need to weight
the criteria to create the correct priority in the decision. For example, you may have
weighted budget, safety, and reliability as the most important criteria to consider, along
with several other slightly less critical criteria.

Step 4: Generate Alternatives

Once you have identified the issue and gathered relevant information, now it is time to
list potential options for how to decide what to do. Some of those alternatives will be
common and fairly obvious options, but it is often helpful to be creative and name
unusual solutions as well. The alternatives you generated could include the types of
cars, as well as using public transportation, car pooling and a ride-hailing service.

Step 5: Evaluate Alternatives

After creating a somewhat full list of possible alternatives, each alternative can be
evaluated. Which choice is most desirable and why? Are all of the options equally
feasible, or are some unrealistic or impossible? Now is the time to identify both the
merits and the challenges involved in each of the possible solutions.

Step 6: Select the Best Alternative

After a careful evaluation of alternatives, you must choose a solution. You should clearly
state your decision so as to avoid confusion or uncertainty. The solution might be one of
the particular options that was initially listed, an adaptation of one of those options, or a
combination of different aspects from multiple suggestions. It is also possible that an
entirely new solution will arise during the evaluation process.

https://courses.lumenlearning.com/suny-principlesmanagement/chapter/rational-
decision-making-vs-other-types-of-decision-making/

CE 135 – Engineering Management | 2


Decision Making and Decision-Support Systems (DDS)

Decisions are made at all levels of the firm. Some decisions are very common and
routine but exceptionally valuable. Although the value of improving any single one
of these decisions may be small, improving hundreds of thousands of these small
decisions adds up to a large annual value.

Decisions are classified according to type:

• Unstructured decisions are those in which the decision maker must provide
judgment, evaluation, and insights into the problem definition.

• Structured decisions, by contrast, are repetitive and routine, and decision


makers can follow a definite procedure for handling them to be efficient.

• Semistructured decisions are those in which only part of the problem has a
clear-cut answer provided by an accepted procedure. In general, structured
decisions are more prevalent at lower organizational levels, and
unstructured decision making is more common at higher levels.

There are different types of decision-making at different levels:

• Senior executives face many unstructured decision situations, such as


establishing the firm's five or ten-year goals

• Middle management faces more structured decision scenarios but their


decisions may include unstructured components.

• Operational management and rank-and-file employees tend to make more


structured decisions.

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FIGURE 12-1 INFORMATION REQUIREMENTS OF KEY DECISION-MAKING GROUPS IN A
FIRM
Senior managers, middle managers, operational managers, and employees have different types of decisions
and information requirements.

https://paginas.fe.up.pt/~als/mis10e/ch12/chpt12-1bullettext.htm

CE 135 – Engineering Management | 4

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