5.1 Decision Making
What’s in it for me?
Reading this chapter will help you do the following:
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- Understand the types of decisions that are made.
- Evaluate the strengths and weaknesses of approaches to decision making.
- Know the practical constraints in group decision making.
Decision making. What’s one to do?’
Learning Objectives
- Illustrate different types of decisions.
- Criticize classical decision making
- Explain rational decision making.
- Define ‘bounded rationality’.
- Assess manager concerns in group decision making.
Yes, decision making is one of those management skills that sounds obvious and maybe easy to do but it is not always so simple. At it’s basic element it is choosing an alternative from a set of alternatives. It is not only a multiple choice problem, you also have to identify the choices.
Let’s start with the types of decisions a manager makes. There are two basic types.
Programmed decisions
These are decisions that are very structured and re-occur. An example of this is ordering inventory. This happens at regular intervals and there is likely a well-defined criteria for what to order and when.
Non-programmed decisions
These decisions do not occur frequently and are not well structured. For example, you need parts for manufacture but the cargo ship importing your parts hits a bridge and dumps your cargo in the sea. What do you do? Or perhaps you manage a restaurant and a pandemic occurs.
In the remainder of this chapter we’ll take a deeper look at decision making.
