slide 1: Decision Making : How To Be
Better and Faster
www.humanikaconsulting.com
slide 2: Contents
• What are some of the current issues in
decision making
• What is the decision-making process in
organizations
• Effective decision making
• When do decisions need to be made
• Choose the appropriate strategy
• How do intuition judgment and creativity
affect decision making
• The decision making process
• Gather the facts
• Identify alternatives
• Assess the alternatives
• Decide
• Helpful hints
• Decision making behaviour
• Decision making approaches
• Consensus decision making
• When to use which decision making method
• How to conduct a consensus decision making
session
• Further assistance
slide 3: What are some of the current issues
in decision making
Workplace trends affecting organizational decision
makers.
– Business units are becoming smaller in size.
– New more flexible and adaptable organizational
forms.
– Multifunctional understanding is increasingly
important.
– Workers with both technical knowledge and team
skills are increasingly desirable.
– The nature of “work” is in a state of flux.
slide 4: What are some of the current issues in decision
making
Information technology and decision making.
– Artificial intelligence is the study of how computers
can be programmed to think like human beings.
– Expert systems support decision making by
following “either-or” rules to make deductions.
What are some of
the current issues
in decision
making
slide 5: Information technology and decision making
cont..
– Fuzzy logic and neural networks reason
inductively.
– Computer support for decision making.
– Information technology does not deal with issues
raised by the garbage can model.
What are some of
the current issues
in decision
making
slide 6: What are some of the current issues in
decision making
Cultural factors and decision making.
– Culture is “the way in which a group of people solves problems.”
– North American culture stresses decisiveness speed and the
individual selection of alternatives.
– Other cultures place less emphasis on individual choice than on
developing implementations that work.
– The most important impact of culture on decision making
concerns which issues are elevated to the status of problems
solvable within the firm.
What are some of the current
in decision making
slide 7: How do you infuse ethics into the
decision-making process
Ways to infuse ethics into decision making.
– Develop a code of ethics and follow it.
– Establish procedures for reporting violations.
– Involve employees in identifying ethical issues.
– Monitor ethical performance.
– Reward ethical behavior.
– Publicize ethical efforts.
slide 8: How do you infuse ethics into
the decision-making process
Morality is involved in:
– Choosing problems.
– Deciding who should be involved in making decisions.
– Estimating the impacts of decision alternatives.
– Selecting an alternative for implementation.
An effective decision needs to solve a problem as well as
match moral values and help others.
slide 9: What is the decision-making
process in organizations
Decision making is the process of choosing a course of action for
dealing with a problem or opportunity.
Steps in systematic decision making.
– Recognize and define the problem or opportunity.
– Identify and analyze alternative courses of action and estimate
their effects on the problem or opportunity.
– Choose a preferred course of action.
– Implement the preferred course of action.
– Evaluate the results and follow up as necessary.
slide 10: What is the
decision-making
process in
organizations
Certain decision environments.
– Exist when information is sufficient to predict the results of each
alternative in advance of implementation.
Risk decision environments.
– Exist when decision makers lack complete certainty regarding
the outcomes of various courses of action but they are aware of
the probabilities associated with their occurrence.
slide 11: What is the
decision-making
process in
organizations
Uncertain decision environments.
– Exist when managers have so little information on hand that
they cannot even assign probabilities to various alternatives and
their possible outcomes.
– Described as a rapidly changing setting in terms of:
• External conditions.
• The information technology requirements needed for
analyzing and making decisions.
• The people who influence problem and choice definitions.
slide 12: What is the decision-
making process in
organizations
Uncertain decision environments cont..
– Can be described in terms of types of risks encountered by the
organization.
• Strategic risks are threats to overall business success.
• Operational risks are threats inherent in the technologies
used to reach business success.
• Reputation risks are threats to a brand or to the firm’s
reputation
slide 13: What is the decision-
making process in
organizations
Types of decisions.
– Programmed decisions.
• Involve routine problems that arise regularly and can
be addressed through standard responses.
– Nonprogrammed decisions.
• Involve nonroutine problems that require solutions
specifically tailored to the situation at hand.
slide 14: In decision making
A major activity of management is the making of decisions.
Decisions need to be timely. There are times when a decision has to be made.
Even if it turns out not to be the best decision it can be better than not
making a decision at all.
Decisions often have to be made when there is insufficient information.
Decisions involve taking risks. Effective decision making involves gathering
what information is known identifying the options assessing the risks and
making the best decision with the information available in a timely manner.
slide 15: When do decisions need to be made
• Selecting external suppliers
• Handling disagreements and
conflict resolution
• Scheduling work and allocating
resources to tasks
• Managing meetings
Situations include:
• Determining the project
strategy/approach
• Resolving project issues
• Developing estimates
• Making purchases
• Interviewing and selecting project
team members
slide 16: Choose the appropriate strategy
High importance
Risks/Impacts/Costs
are major
Low importance
Risks/Impacts/Costs
are minor
Urgent decision
required
No time for detailed
analysis so use considered
judgement or consult an
expert.
A quick decision can be
made with minimal
analysis.
No urgency on
making decision
Conduct detailed analysis Defer or delegate decision
When making a decision it is useful to determine what type of
decision it is and the appropriate strategy to follow.
Focus time on important decisions don’t waste time on unimportant
decisions.
slide 17: How do intuition judgment and creativity affect decision making
Intuition.
– The ability to know or recognize quickly and readily the possibilities of
a given situation.
– A key element of decision making under risk and uncertainty.
slide 18: How do intuition judgment and creativity affect decision making
Judgmental heuristics.
– Simplifying strategies or “rules of thumb” used to make
decisions.
– Make it easier to to deal with uncertainty and limited
information.
slide 19: How do intuition
judgment and creativity
affect decision making
Types of heuristics.
– Availability heuristic.
• Bases a decision on similarity to past occurrences that are
easily remembered.
– Representativeness heuristic.
• Bases a decision on similarities between an event and
stereotypes of similar occurrences.
– Anchoring and adjustment heuristic.
• Bases a decision on incremental adjustments to an initial
value determined by historical precedent or some reference
point.
slide 20: How do intuition judgment and creativity affect
decision making
General judgmental biases in decision making.
– Confirmation trap.
• The tendency to seek confirmation for what is already
thought to be true and to not search for disconfirming
information.
– Hindsight trap.
• The tendency to overestimate the degree to which an event
that has already taken place could have been predicted.
slide 21: How do intuition judgment and creativity affect decision making
Stages in the creative thinking process.
– Preparation.
– Concentration.
– Incubation.
– Illumination
– Verification.
slide 22: How do intuition
judgment and
creativity affect
decision making
Ways of fostering creativity.
– Diversifying teams to include members with different backgrounds
training and perspectives.
– Encouraging analogical reasoning.
– Stressing periods of silent reflection.
– Recording all ideas so that the same ones are not rediscovered.
– Establishing high expectations for creativity.
– Developing a physical space that encourages fun divergent ideas.
slide 23: Study Question 3: How do intuition
judgment and creativity affect decision
making
Creativity is higher when:
– Linguistic ability willingness to engage in
divergent thinking and intelligence are present.
– Individuals are motivated by and derive
satisfaction from task accomplishment.
– There are opportunities for creativity as many
constraints as possible are eliminated and
rewards are provided for creative efforts.
slide 24: How do intuition
judgment and
creativity affect
decision making
Creativity is higher when cont.:
– The decision maker emphasizes engagement in the creative process and
counsels individuals to share their ideas with others.
– The decision maker encourages subordinates to recognize ambiguity
contact others with different views and be prepared to make
considerable changes.
slide 25: The decision making process
1. Gather the facts
2. Identify a number of alternatives
3. Assess the alternatives
4. Decide
Four simple steps:
Where quick decisions need to be made these steps can be done
mentally “on the fly” or by one person. When time allows and the decision
is important more people can be involved and a more thorough decision
making process used.
slide 26: Gather the facts
• Write down a statement of what needs to be decided.
• Is the decision statement clear and precise If not refine the
statement.
• Is the need for the decision a result of an underlying problem
which also needs to be addressed
• Are there assumptions underlying the decision that need to be
clarified and possibly challenged
• Is the decision part of a bigger decision that needs to be made
or can this decision be decomposed into smaller decisions
Guidelines
slide 27: Identify alternatives
• Identify as many alternatives as possible.
• Use brainstorming if appropriate.
• Do not filter out alternative options at this stage
- assume they can all be made to work.
• When you have generated lots of ideas consider each
one to see if it is a viable alternative.
• Shortlist the viable alternatives.
Guidelines
slide 28: Assess the alternatives
• Write down the pros and cons of each alternative.
• Identify the risks associated with each alternative.
• Determine the impact of each alternative on other
areas of the organisation. Consider the big picture.
• Review the alternatives to determine if there is clearly
a preferable choice.
Guidelines
slide 29: Decide
• Select the best alternative from those
available.
• Consider your “gut feel”. Instincts
can often be right.
• If the best alternative is not obvious
draw up a table for the options. List
the attributes that the options are to
be assessed on. Assign points to
each see example below
• Make the decision and take action.
Guidelines
Attribute
Repair
option
Replace
option
Comments
Cost 2 0
Repair is a much cheaper
option
Warranty 1 2
Full warranty if replace partial
only if repair
Expected useful
life
1 2
Extended by repair but not as
long as if new
Risk 1 2
Repair could damage other
components new is less risky
Functionality 0 1
Replacement has more
features.
Total 5 7 Replace is better option overall.
slide 30: Helpful hints
• Do:
– Clearly identify the decision
to be made
– Involve people qualified to
help in the decision making
– Identify the context of the
decision the bigger picture
– Identify all alternatives
– Assess each alternative
– Assess the risks
– Consider your “gut feel”
– Make the decision
and stick to it
Don’t:
– Make assumptions
– Procrastinate
– Jump to conclusions
– Make uninformed decisions
– Favour one decision prior to
gathering the facts and
evaluating the alternatives
– Allow only technical people to
make the decisions
– Attempt to make a decision in
isolation of the context
– Let emotion override
objectivity
slide 31: Decision making behaviour
People tend to adopt a particular decision making approach as a result of
factors such as:
• their own personality
• their current mood
• the organisational culture
• the personality of the person/people they are dealing with
• the nature of the relationship they have with the people they are
dealing with
• time pressure and perceived level of stress
Being aware of these influences can result in better decision making by
adopting the best decision making approach for each situation.
slide 33: Decision making
approaches
Approaches to decision making situations:
Adapted from D Billows Project Manager’s KnowledgeBase
2
nd
edition 2004 The Hampton Group.
• Withdrawing: holding off making the decision.
• Smoothing: focusing on areas of agreement and ignoring
areas of difference.
• Compromising: trying to come up with a decision that
provides some degree of satisfaction for all parties.
• Confronting/problem solving: working through the issues.
• Forcing: executing a particular decision knowing agreement
has not been reached.
slide 34: Decision making approaches
Withdrawing:
• Withdraw to gather more information and perspective
• Only a stop gap measure
• Useful in “cooling down” an overheated situation
• Taking time out “sleep on it” before final decision
Smoothing:
• Relationship focused rather than solution focused
• Avoids dealing with the issues
• Can be useful in reducing the emotional tension where the
decision is of low importance.
• Does not provide a long-term solution
Skilled project managers and business analysts
select the best approach appropriate to the situation.
slide 35: Decision making
approaches
Confronting/problem solving:
• Direct approach
• Identifies alternatives and works through the issues
• Time-consuming
• Most likely method to develop the best solution
Forcing:
• Used when an urgent decision is required or as a last resort
• Necessary for situations when decision making is blocked
• May result in reluctance in execution of decision if not
handled well.
Compromising:
• Bargaining to get an acceptable agreement
• Falls short of the best decision
• Can be useful in resolving negotiation deadlocks
slide 36: Consensus decision making
Consensus decision making is the process of involving a group of
stakeholders in the making of a decision such that even though some of
the participants may not agree with the decision that is made they all
accept the decision.
Consensus decision making is more time-consuming than unilateral
decision making but does have the added benefit of building
commitment to the decision that is made.
Consensus decision making should make use of the confronting/problem
solving approach and avoid resorting to compromising or forcing.
slide 37: When to use consensus decision making
Unilateral Consensus
• Decision is minor or
urgent
• Does not affect the
overall team
• There are issues of
confidentiality
• Suggestions of alternatives are
needed
• The decision can have a
significant impact on the team
• The team need to action the
decision
• There is sufficient time to
organise a meeting to work
through the decision
slide 38: How to conduct a consensus decision making session…
1. Provide a brief of what decision needs to be made and what
information is already available. Gather additional facts.
2. Identify the alternatives.
3. Assess the alternatives allowing all opinions and concerns to be
raised. Use a round robin technique.
4. Identify common areas of agreement
5. Identify the differences and work through them
6. Measure consensus
7. State the final agreed-upon decision.
Round robin is where each of the participants in a meeting is asked in turn for their opinion. It ensures that the
quieter members of the group have a chance to express their views.
Consensus can be measured by people raising one hand and showing the number of fingers to indicate
level of agreement from one finger for low level of consensus through to open hand for full consensus. Do
not hold a vote because this splits the team into winners and losers.
slide 39: Further assistance
• Guide to Problem Solving
• Guide to Brainstorming
For additional supporting guides see