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Decision Making Techniques Lecture 1

This document discusses decision making techniques for business. It begins by defining different types of business decisions including structured vs unstructured, and strategic, operating, and control decisions. It then outlines Anthony's three levels of decision making within an organization including strategic, tactical, and operational decisions. The document next explains the five stage decision making process of identifying the problem, gathering information, considering alternatives, choosing the best alternative, and implementing and monitoring. Finally, it lists and describes some decision making techniques such as Pareto analysis, PMI analysis, cost-benefit analysis, and grid analysis/decision matrices analysis.

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Mishe Mee
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Download as PPTX, PDF, TXT or read online on Scribd
221 views

Decision Making Techniques Lecture 1

This document discusses decision making techniques for business. It begins by defining different types of business decisions including structured vs unstructured, and strategic, operating, and control decisions. It then outlines Anthony's three levels of decision making within an organization including strategic, tactical, and operational decisions. The document next explains the five stage decision making process of identifying the problem, gathering information, considering alternatives, choosing the best alternative, and implementing and monitoring. Finally, it lists and describes some decision making techniques such as Pareto analysis, PMI analysis, cost-benefit analysis, and grid analysis/decision matrices analysis.

Uploaded by

Mishe Mee
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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DECISION MAKING

TECHNIQUES
(BBA301/BAF204)

BY GEORGE MTAYACHALO (MSC, BA,)


BUSINESS STUDIES DIVISION
NATIONAL INSTITUTE OF PUBLIC ADMINISTRATION
LECTURE ONE: EXPLAINING THE
BUSINESS AND DECISION MAKING
PROCESS
1.1 TYPES OF BUSINESS DECISION
THE NATURE OF BUSINESS DECISIONS.

• A business decision is simply a decision in business. Business decisions are


taken by the owners of a business organization, or by managers within the
organization.
• As a result of a business decision, the organization may commit resources to
a business activity. It is therefore highly desirable that the decisions that are
taken are good decisions.
STRUCTURED AND UNSTRUCTURED BUSINESS
DECISIONS.

• A structured decision is a decision that is repetitive and routine in nature.


• An unstructured decision is a decision where the decision-maker uses his
insight, experience and intuition to identify and define the nature of the
problem and to consider alternative solutions. The problems are non-routine.
STRATEGIC, OPERATING AND CONTROL
DECISIONS

• Strategic decisions are decisions concerned with deciding the objectives, resources
and policies of the organization. They are often unstructured non-routine decisions.
They are made by top management.
• Operational decisions are about planning production or the provision of services to
meet demand and delivery requirements of customers.
• Control decisions are decisions about what to do when something goes wrong, or
how to prevent something from going wrong.
RN ANTHONY IDENTIFIED THREE LEVELS OF
DECISION WITHIN AN ORGANIZATION.

• 1. Strategic decisions: These are decisions about the objectives of the organization and
plans for achieving them, mostly they are over the long term
• 2. Tactical decisions: These are decisions concerned with shorter-term plans for
achieving medium-term objectives, and control decisions concerned with achieving these
shorter term plans.
• 3. Operational decisions: These are decisions concerned with detailed planning of day-to-
day operations and control activities, often at a supervisor level or junior management.
1.2 THE DECISION MAKING PROCESS

• Decisions making in business can be explained as a series of stages.


• Stage 1: Identify the problem or challenge. The first step is to recognize that a
problem or a challenge exists, and identify what the problem is.
• Stage 2: Gather and evaluate information.
• Stage 3: Consider alternative solutions and their possible implications.
• Stage 4: Choose the best alternative.
• Stage 5: Implement and monitor what happens.
1.3 DECISION MAKING TECHNIQUES.

• Pareto analysis
• Plus/minus/interesting (PMI) analysis
• Cost-benefit analysis
• Grid analysis: decision matrices analysis*
CONT`D

• Grid analysis: decision matrices analysis : is a technique that helps a decision


maker to choose between alternative options. It relies on judgment and opinion.
• The technique involves identifying the factors that matter to the decision-maker
and giving each factor a weighting. Each alternative is then given a score for
each factor and this is multiplied by the weighting for the factor. The weighted
scores for all the factors are added and the alternative with the highest weighted
score is selected (see example on next slide)
CONT`D
END

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