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DM PROCESS - Recording

The document outlines an 8-stage decision making process: identifying problems, setting objectives, making pre-decisions, generating alternatives, evaluating alternatives, making a choice, implementing the choice, and following up. It provides details and examples for each stage.

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sammie cele
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19 views

DM PROCESS - Recording

The document outlines an 8-stage decision making process: identifying problems, setting objectives, making pre-decisions, generating alternatives, evaluating alternatives, making a choice, implementing the choice, and following up. It provides details and examples for each stage.

Uploaded by

sammie cele
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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DECISION-MAKING PROCESS

– STAGE 1 Identify the problem


– STAGE 2 Set objectives
– STAGE 3 Make a pre-decision
– STAGE 4 Group decision making
Generate alternatives
– STAGE 5 Evaluate alternatives
– STAGE 6 Make a choice
– STAGE 7 Implement the choice
– STAGE 8 Follow up
1. PROBLEM IDENTIFICATION

– You need to first recognise, classify and identify the problem.

– The problem may be classified in terms of programmed or non-


programmed decision.

– The decision making condition can either be under condition of


certainty, risk or uncertainty.

– For example, company cannot meet its payroll obligations because of


insufficient funds.
2. SETTING OBJECTIVES

– Convert the problem in such a way that possible solutions can be


identified.
– By looking at the problem in this manner, the objective becomes
clear “INADEQUATE CASH FLOW”
– Any possible solution to the problem should be evaluated relative
to the objective, example, increase available cash reserves/flow.
3. MAKING A PREDECISION

– This is a decision about who is going to make the decision.


– By assessing the type of problem in question, the manager
may opt to do the following:
– Delegate the decision to another.
– Have a group make the decision.
– Other managers rely on their own intuition/decision.
4. GENERATING ALTERNATIVES

– In attempting to solve the problem, most tend to use


previously used approaches that might rely on ready-
made answers.
– Example, in looking for alternatives for the cash flow
shortage, we could think of the following:
– Reducing the workforce.
– Sell unnecessary equipment and or material.
– Increase sales.
5. EVALUATING ALTERNATIVE
SOLUTIONS
– Which alternative is the best.
– What will be the best way of raising this money to meet the
payroll?
Some in no 5 may be more effective than others and may be more
difficult to implement than others.
For example, increasing sales would help solve the problem but it
easier said than done.
It is a solution, but not an immediate practical one.
6. MAKING A CHOICE

– After several alternatives/choices are evaluated, one that


is acceptable is chosen.
– The manager need to evaluate carefully each option
against the goals with the view of ranking in order of
priority.
– Usually most options are subjective, options are chosen
based on manager’s experience, values, internal politics
and so on.
7. IMPLEMENT THE DECISION

– Implement the chosen option.


– Appropriate steps should be taken that it is properly
implemented.
– This means that it must be put into action.
– Relevant parties should be informed and they should
understand the implementation process.
8. FOLLOW-UP EVALUATION

– Once the decision is set in motion, evaluation is


necessary to provide feedback on its outcome.
– Adjustments are needed to ensure that actual results
compare favourably with planned results.
– If necessary, modifications/changes can be made and
further options identified and evaluated.

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