MODULE 2

SUBJECT: CE 426 – CONSTRUCTION METHODS AND PROJECT MANAGEMENT

1. Title of the Module

DECISION MAKING

2. Introduction

Decision making is the fundamental process of management. Most of the efforts of

managers are related to this process. Unfortunately, decisions do not always turn out as
planned. Decision making is the fundamental process of management. It is the process of
choosing the right and practical course of action from alternatives to achieve the specified
result.

Who makes decisions? Only the executive makes decisions. Decision-making is only
one of manager’s tasks. This is by virtue of his position or authority. It is but a small
fraction of his time. But to make decisions id his specific work.

3. Learning Outcomes

At the end of this chapter, students are expected to be able to:

1. Identify the steps of decision process.

2. Identify the role of the executive manager.

3. Assess how important a decision making.

4. Understand the reason why manager insist on disagreement before making

decision.

5. Identify the elements of Decision Process.

6. Assess how important a budgeting time.

4. Learning Content

It contains readings and discussions that students can work on individually or ingroups.

Topics for Module 2

Topic 1: Effective Decisions

Topic 2: The Effective Managers

Topic 3: Decision Process

3.1. Identify the Problem

3.2. Specify objectives & Decision Criteria

3.3. Develop Alternatives

3.4. Analyze & Compare Alternatives

3.5. Select Alternative

3.6. Implement the chosen alternative.

3.7. Monitor Result

Topic 4: Reasons for Poor Decisions

Topic 5: Elements of Decision Process

Topic 6: Budgeting the Time

Topic 7: First Things First

Topic 8: Employee Discipline

Topic 9: Principles of Discipline

Topic 1: Effective Decisions

What is a decision? Decision is a judgement, a choice between alternatives. It is a choice

between almost right and probably wrong. It is at best a choice between almost right and wrong.

Manager who makes effective decisions know that one does not start with facts, one
starts with opinions. But opinions are nothing, but untested hypotheses and as such, is worthless
unless tested against reality.

Executive Manager knows that unless a decision has degenerated into work, it is not a
decision; it is at best a good intention. While the decision itself is based on the highest level of
conceptual understanding, the action to carry it out should be as close as possible to the working
level and as simple as possible.

The first rule in decision making is that one does not decide unless there is
disagreement. Right decision demands adequate disagreement first.

There is one final question the effective decision maker asks: Is the decision necessary?
One alternative always the alternative of doing nothing.

Topic 2: The Effective Managers

Effective Managers are expected to make effective decisions with significant impact on
the entire organization, its performance, and results.

Effective Managers know that a decision must be based on principle and should be
made on the merits of the case. They should know that the intricate decisions that between the
right and the wrong compromise and have learned to distinguish one from another.

Effective Decision maker constantly monitors the results of the decision to ascertain that the
desired objectives have been achieved. If not, the decision maker may have to re-start again or
perhaps a review of the situation may reveal the following:

• An error in the actual implementation

• An error in calculation
Topic 3: Decision Process

Effective decisions are made through a systematic process clearly defining the elements
in a sequence of steps. Most successful decision making follows a process that consist of the
following steps:

1. Identify the Problem

2. Specify objectives & Decision Criteria

3. Develop Alternatives

4. Analyze & Compare Alternatives

5. Select Alternative

6. Implement the chosen alternative

7. Monitor results to ensure the desired results are achieved.

The success or failure in making decision often depends on how well each of these steps
is handled.

• Identify the Problem

It is the focal point of the process. Solutions must address the basic problem not the symptoms.

• Specify objectives & Decision Criteria

The decision make must identify the criteria by which process solutions will be judged.
Common criteria often relate to
1. Capital 5. Return of Investment
2. Profits 6. Increase of cost
3. Time 7. Risks
4. Maintenance

The ability to satisfactorily handle problems often depends on the degree of success one has
in developing suitable alternatives. Much depends on the experience and creativity of the
decision makes as well as on the nature of the situation.

Generally, efforts expended in carefully identifying alternatives can result to substantial

dividends in terms of the overall decision. One alternative that is frequently overlooked
possibly because it seems too simple is to do nothing. The beauty of doing nothing lies not
only in the fact that no time of effort is needed but also in that it may cost nothing and requires
no implementation.
 • Analyzing and comparing alternatives, often benefits from the use of mathematical
or statistical techniques.
• Selection of the best alternatives will depend on the objectives of the decision maker
and the criteria that are being used to evaluate alternatives.
• Implementing the chosen solution simple mean, carrying out the actions by the
chosen alternatives.
• Implementing the chosen solution simply mean, carrying out the actions
indicated by the chosen alternative. If the alternative selected to do nothing, no
action will be required to implement.

REASONS WHY MANAGER INSIST ON DISAGREEMENT BEFORE DECISION

MAKING
1. It is only a safeguard against the decision maker’s becoming the hostage of the
organization. Everybody always wants something from the decision maker.

2. Disagreement alone can provide alternatives decision. A deciding without an

alternative is like a desperate gambler’s throw, no matter how carefully thought
through it might be, there is always a possibility that the decision will prove wrong
either because it was wrong at the start or because of a change of circumstances that
makes it wrong.
3. Disagreement is needed to stimulate the imagination. But the imagination of the high
level is not abundant. Neither is it scarce as commonly believed.
4. Effective manager organizes disagreement because this will protect him against being
taken in by seemingly honest but false or incomplete information. It gives him the
alternative to choose and make decision.
5. Effective managers know that there are fools around and that are mischief makers.
But they do not assume that the man who disagree with what they themselves sees as
clear and obvious, is therefore a fool or knave.
6. Every decision is like surgery. It is an intervention into a system and therefore carries
with it the risk of shock. One does not make unnecessary decisions any more than a
good surgeon does unnecessary surgery.
7. Individual decision makers like individual surgeons differ in their styles. Some are
more radical or more conservative than others. But generally, they agree on rules.
8. One must make decision when condition is likely to degenerate if nothing is done.
This also applies with respect to opportunity.
9. Effective decision makers, compares the risk of inaction.
Topic 4: Reasons for Poor Decisions

1. Errors made in the decision process.

2. Bounded rationality

3. Sub-Optimism

In many cases, the manager fails to appreciate the importance of the above step in the decision
process. Sometimes this is due to a manager’s style of making quick decisions or failure to
recognize the consequences of a poor decision.

BOUNDED RATIONALITY. A term refers to the limit at control on making decision

because of costs, human abilities, time, technology, and the availability of information.

SUB-OPTMISM. Is the result from each different department’s attempt to reaching a

solution that is optimum for their department? Unfortunately, what is optimum to a particular
department may not be optimum for the entire organization.

Topic 5: Elements of Decision Process

1. See if the problem was generic and could only be solved through a decision established
by a rule, or principle.

2. Define the specifications which the answers to the problem had to satisfy, that is, of
the boundary conditions.

3. The thinking through what is right, that is, the solution which will satisfy the
specifications before attention is given to the compromises, adaptations, and concessions
needed to make the decisions acceptable.

4.The building into the decision of the action to carry it out.

5. The feedback, which tests the validity and effectiveness of the decision against the
actual course of events.

The second elements in the decision process are clear specifications as to:

1. What the decision must accomplish?

2. What are the objectives, the decision must reach?

3. What are the minimum goals it must attain?

4. What are the conditions it must satisfy?

In science, these are known as the “boundary conditions.” A decision to be effective, need
to satisfy the boundary conditions. It needs to be adequate to its purpose. Any serious shortfall
in defining these boundary conditions is almost certain to decide ineffectual, no matter how
brilliant it may seem.

The next major element in the decision process is the converting the decision into action. A
decision will not become effective unless the action commitments have been built into the
decision from the start. In fact, no decision has been made unless carrying it out in specific
steps. Until then, these are only good intentions.

Finally, feedback has to build into the decision to provide a continuous testing against actual
events of the expectations that underlie the decisions.

Decisions are made by end. Men are fallible. At their best, their works do not last long. Even
the best decision has a high probability of being wrong. Even the most effective one
eventually becomes obsolete.

Topic 6: Budgeting the Time

Time is a unique resource. Its supply is totally inelastic. No matter how high the demand,
the supply will not go up. There is no price for it. Moreover, time is totally perishable and
cannot be stored. Yesterday’s time is gone forever and will never come back. Time is
therefore exceedingly short of supply.

Time is irreplaceable. There is no substitute for time. Everything we do requires time All
works takes place in time and uses up time.

The main task in the work of the manager is the time spent working with people. By
nature, people are the time consumers, and most people are time wasters. To spend a few
minutes with the people is simply not productive.
Mixing personnel relations and work relations is time consuming. The more people
are together; the more time will be consumed for interactions. Thus, less time will be available
to them for work accomplishment and results.

Time wastes Is often result from over staffing. The symptom of over staffing could be in
the chiefs and course the manager spends more time, on problems of the human relations, on
feuds and frictions, on disputes and disputes and questions of cooperative etc.

MEETINGS:

Another common time waster is mal organization. Meetings are defined as concession to
deficient organization for one either meets ore one works. Certainly, one cannot do both
things at the same time.

Meetings must be the exception rather than the rule. When people in organization find the
organization find themselves in meetings a quarter of their time or more, there is time wasting
mal organization. As a rule, meetings should never have allowed to become the main demand
on an executive time.

Timing is the most important element in the success of any effort. To a year later what it
would have been smart to do a year earlier is almost a sure recipe for frustration and failure.

Topic 7: First Things First

The one secret of effectiveness is CONCENTRATION. Effective managers do first thing first
and they do one thing at a time. There are always more important contributions to be made
than there is time available to make them. No matter how the manager manages his time, the
greater part of it will still not be his own. Therefore, there is always a time deficit.

What one postpones, one abandons. TIMING is the most important element in the success of
any effort. To a year later what it would have been smart to do a year earlier is almost a sure
recipe for frustration and failure.

Topic 8: Employee Discipline

DISCIPLINE is a means that management uses to bring employees behavior under control.
Its purpose is not retribution or vengeance but to impress upon the employee the need to do
things in a prescribed manner. Discipline is an employer’s action against an employee for
infraction of company policies or rules.

EMPLOYEE DISCIPLINE (Purpose)

The purpose of discipline is PREVENTIVE; that is to prevent the commission of an act, which
violates the policies, rules, and regulations of the company. It is a form of control to protect
the interests of the company as well as those employees.
Control within this context has three major dimensions:

As a means of establishing awareness on the part of the employees regarding the proper
behavior, attitude, and conduct in their jobs.
As a means of establishing an atmosphere conducive to working together efficiently.
As a means of correcting or reforming employees who commit any infraction or violation of
company rules and regulations.

EMPLOYEE DISCIPLINE (Objective)

The objective of discipline is to educate the employees in the fundamental standards of

behavior and performance. The employees should therefore be made to realize that the rules
and regulations are enforced for their own benefit and not merely to punish them. It aims to
correct or reform the employee, not to penalize him.
Topic 9: Principles of Discipline

1. Disciplinary action should not be taken unless there is an obvious necessity for it.

2. The reasons for disciplinary action should be made clear.

3. Give the man a chance to present his side of the story, and do not argue.

4. There should be no favoritism or discrimination in any disciplinary action.

5. Reprimand should be given as soon as possible after the occurrence of the act. Right
timing is important, but first have all the facts.

6. Forgive and forget. When disciplinary action has been given, the supervisor should
resume a normal.

7. Never discipline anyone in the presence of others.

8. The discipline that is inflicted must be just, but sufficiently severe to meet the
requirements of the situation.

9. Disciplinary measure should be applied by the immediate superior of the employee

affected, rather than by some other higher executive.

10. In general, negative disciplinary action cannot be successfully applied to large groups
of employees representing a substantial portion of one’s organization. If there is poor
discipline among a large group, it is possible that there is something vitally wrong in
the situation. The remedy is correction of the situation, not disciplinary action.

11. In determining the nature and degree of disciplinary action that is made necessary by
some improper act of an employee, the intent should be considered.

12. Discipline should be constructive. It should show the offender how to correct his
errors and leave him willing and anxious to improve rather than feel bitter and
resentful.

13. Except in cases of extremely serious offenses, no disciplinary action should be

permitted to take place until the supervisor has talked over with the employee.

14. Discipline should not be administered on an entirely routine basis. Each case should
be treated individually. You cannot discipline a group to teach a few offenders.
15. Maintain a constant and sincere interest in your people’s welfare on and off the job.
This reduces the need for disciplining to a minimum.
16. Motivation is the secret of good discipline. When a man is sufficiently motivated,
discipline will take care of itself.
5. Teaching and Learning Activities

6. Recommended learning materials and resources for supplementary reading:

Book (e.g. Project Construction Management by Max Fajardo Jr.)

7. Flexible Teaching Learning Modality (FTLM) adopted

Face – to – Face Classes Asychronous (modules, exercises, problem sets, etc.)

8. References

Project Construction Management by Max Fajardo Jr.