DECISION MAKING

CSH Pharma Group

What you think what is decision making?

Which Mobile Phone should I buy?Which Mobile Phone should I buy?

What are the things

you consider before

making a decision?

What are the things you consider before

making a decision?

Decision MakingDecision Making

1. What is Decision Making?

2. Barriers to GoodDecision Making

4. Decision MakingTools

3. Decision Making Process

Decision Making

The process of examining your possibilities options, comparing them, and choosing a course of action.

A choice from two or more alternative

Barriers to Good Decision Making

“Successful leaders have the courage to take action while others hesitate.”

- John C. Maxwell

Hasty - Making quick decisions without having much thought.

Narrow - Decision making is based on very limited information.

Scattered - Our thoughts in making decisions are disconnected or disorganized.

Fuzzy - Sometimes, the lack of clarity on important aspects of a decision causes us to overlook certain important considerations.

Making Effective Decisions

• Perception.

• Priority.

• Acceptability.

• Risk.

• Resources.

• Goals.

• Values.

• Demands.

• Style.

• Judgment.

Six C's of Decision Making

1. Construct.

2. Compile.

3. Collect.

4. Compare.

5. Consider.

6. Commit

Construct a clear picture of precisely what must be decided.

Compile a list of requirements that must be met.

Collect information on alternatives that meet the requirements

Compare alternatives that meet the requirements.

Consider the "what might go wrong" factor with each alternative.

Commit to a decision and follow through with it.

The Decision-Making Process

Identification of a Problem

Identification of Decision Criteria

Allocation of Weights to Criteria

Development of Alternatives

Analysis of Alternatives

Selection of an Alternatives

Implementation of the Alternatives

Evaluation of Decision Effectiveness

Making Decisions: Rationally

rational decision-making:

Describe choices that are consistent and value maximizing within specified constraints.

Making Decisions: Bounded Rationality

bounded rationality decision-making:

Behavior that is rational within the parameters of a simplified decision-making process, which is limited (or bounded) by an individual’s ability to process information.

Intuition decision-making:

Intuition decision-making:

a subconscious process of making decision on the basis of experience and accumulated judgment.

Decision Making Styles

Directive Style

A decision making style characterized by low tolerance for ambiguity and a rational way of thinking.

• They’re efficient and logical• Directive types makes fast decisions and focus on the short run

Analytical Style

A decision making style characterized by a high tolerance a high tolerance ambiguity and a rational way of thinking.

•They want more information before making decision and consider more alternatives

Conceptual Style

A decision making style characterized by a high tolerance for ambiguity and an intuitive way of thinking.

•Very broad in the their outlook and will look at many alternatives•They focus on the long run and very good at finding creative solutions to problem

Behavioral Style

A decision making style characterized by a high tolerance a low tolerance ambiguity and an intuitive way of thinking.

•They’re concerned about the achievements of subordinates and are receptive to suggestion from others

Decision Making ToolsDecision Making Tools

Tool to facilitate better decisions:

SWOT ANALYSIS

SWOT ANALYSIS

SStrengthstrengths WWeaknesseeaknessess

OOpportunipportunitiesties

TThreatshreats

SWOTSWOT analysis is a great technique for identifying your SStrengths and WWeaknesses and study any OOpportunities and TThreats you face.

It is also a powerful strategic planning toolstrategic planning tool used to evaluate a project or in a business venture or in any other situation of an organization or individual requiring a decision in pursuit of an objective.

It involves monitoring the marketing environment internal internal and externalexternal to the organization or individual.

SStrengthstrengthsAttributes of the organization that are helpful to achieving the objective.

WWeaknesseseaknessesAttributes of the organization that are harmful to achieving the objective.

OOpportunitiespportunitiesExternal conditions that are helpful to achieving the objective.

TThreatshreatsExternal conditions that are harmful to achieving the objective.

SStrengthstrengthsHow can we Use each Strength?

WWeaknesseseaknessesHow can we Stop each Weakness?

OOpportunitiespportunitiesHow can we Exploit each Opportunity?

TThreatshreatsHow can we Defend against each Threat?

Internal FactorsInternal Factors OrganizationOrganization

Internal FactorsInternal Factors OrganizationOrganization

External FactorsExternal Factors External EnvironmentExternal Environment

External FactorsExternal Factors External EnvironmentExternal Environment

SStrengthstrengths

WWeaknesseseaknesses

OOpportunitiespportunities

TThreatshreats

SWOT Analysis – Errors to Be AvoidedSWOT Analysis – Errors to Be Avoided

Conducting a SWOT analysis before defining and agreeing upon an objective (a desired end state). SWOTs should not exist in the abstract. They can exist only with reference to an objective.

Opportunities external to the company are often confused with strengths internal to the company. They should be kept separate.

SWOTs are sometimes confused with possible strategies. SWOTs are descriptions of conditions, while possible strategies define actions.

Group decision-making

Advantages and Disadvantages of Group-Advantages and Disadvantages of Group-Aided Decision MakingAided Decision Making

AdvantagesAdvantages DisadvantagesDisadvantages

1. Greater pool of knowledge

2. Different perspectives

3. Greater comprehension

4. Increased acceptance

5. Training ground

1. Social pressure

2. Minority domination

3. Logrolling

4. Goal displacement

5. “Groupthink”

Group Problem Solving Techniques

Definition of consensus – . . . reached when all members can say they either agree . . . Or have had their “day in court” and were unable to convince the others of their viewpoint. In the final analysis, everyone agrees to support the outcome

Other approaches to a group decision

Unanimity A minority or one decides

Brainstorming - disciplined process Silent idea (optional) Ideas/opinions solicited and written on a board, disallowing criticisms, allowing piggy-backing on ideas, clarification

Delphi technique is another, more formal form of brainstorming. Involves several rounds of questionnaire, feedback, etc. Useful in cases where participants are not in the same place.

Nominal Group Technique – used to narrow down options through voting.

Computer-aided Decision MakingUses computers to manage brainstorming or Delphi questioning

Any Questions?Any Questions?