Group name:

Simnandi Kanje (Pty) Ltd

Members that participated in the activity:

Initial & Surname	Student number	Contribution
S.P Khumalo	32565313	Learning Outcome 1
L.L Mokati	31603033	Learning Outcome 1
K.P Newson	30233070	Learning Outcome 2
N.A Mazibuko	31744559	Learning Outcome 2
R.A Moeletsi	32311672	Learning Outcome 3
M.L Maake	31603033	Learning Outcome 3
T.H Dipholo	31519598	Learning Outcome 4
S.A Maqina	31517668	Learning Outcome 4
C Mohale	32487088	Learning Outcome 5
N.S Kubheka	31833365	Compiling, Learning Outcome 5

Learning Outcome 1

Decision making

• Decision making is the process of making choices by identifying a decision, gathering information and accessing alternative resolutions.

The role of decision making for managers and employees:

• An effective manager relies on all six managerial competencies to make decisions.
• Conversely, decision making processes are basic to all managerial competencies, for example the ability of Miss Lucia Mokati CEO of Range Rover, to envision transforming the company into the world’s largest car manufacturer demonstrates her strategic action competency. She then had to rely on her planning and administration competency to form a management team that would choose and implement a strategy to which to achieve this vision.
• Participation and the decision-making process gives each employee the opportunity to voice their opinions, and to share their knowledge with others. While this improves the relationship between manager and employee, it also encourages a strong sense of teamwork among workers.

Learning Outcome 2

• Decision-making conditions.
• Risk is the condition in which individuals can define a problem and specify the probability of each solution leading to the desired results, for example a gambler decides to take all his winnings and bet a double or nothing. The gamblers choice is that he could lose all that he won in one bet.
• Probability is the percentage of times that a specific outcome would occur if an individual would make a specific decision a large number of times. Example the probability of flipping a coin and it being heads is half because there is one way of getting ahead and the total number of outcomes is 2.
• Objective probability is the likelihood that a specific outcome will occur, based on hard facts and numbers, for example a person who is educated about weather patterns examines things like barometric pressure, wind shear, ocean temperature and predicts the likelihood that a hurricane will head on certain direction.
• Subjective probability is the likelihood that a specific outcome would occur based on a personal judgment and beliefs. An example of this would be a gut instinct when conducting business deals.

Certainty

• Certainty is the circumstance in which one fully knows about a problem and possible solutions to the problem are clear. The condition of certainty gives prediction on occurrences and results. If one recognizes possible solutions and their foreseen results, it becomes less difficult to take a decision. Nonetheless, a small number of decisions are certain in the real world. The decision making under the condition of certainty is special case for most Middle managers, top managers and different professions.

Uncertainty

• Uncertainty is the circumstance in which one would not have needed information to foresee the results of alternative solutions. The condition gives suggestions that possible solutions are not clear and odd. Factors affecting a decision such as price, production cost or future interest rates are difficult to predict. Managers depend on creativity, judgment, instincts and experience to craft a response.

Learning Outcome 3

Characteristics of routine, adaptive and innovative decisions.

• Routine decision

Routine decision making is a system or process used to make decisions that are consistent or lacking in involvement. Routine decisions are standard choices made in response to well-defined and common problems. In a business, decisions to purchase new inventory when supplies run low is routine decisions since it is something the company does often and is necessary for operations. Decisions that people make on a daily basis and that require little research or time investment are considered routine.

• Adaptive decisions

Adaptive decisions are choices made in response to a combination of moderately unusual and fairly uncommon problems with alternative solutions. It involves the continuous improvement and modification of past routine decisions and processes. Continuous improvement is an important factor contributing to total quality management. Continuous improvement involves a flow of organizational decisions made over time that may result in a large number of small, incremental improvements one year after the other.

• Innovative decisions

Innovative decisions are choices that are based on the discovery and identification of unusual problems and the development of unique or creative alternative solutions. Innovative decisions do not normally happen in a logical, orderly sequence because they usually represent a sharp break with the past. Innovative decisions are often based on incomplete and rapidly changing information they may even be made before the problems are fully defined and understood.

Learning Outcome 4

Goals and decision-making

• Decision making in organisations under the conditions of risk and uncertainty is coupled directly with goals in one or two ways:
• The decision-making process is triggered by a search for better ways to achieve established goals.
• The decision-making process is triggered by an effort to discover new goals, update current goals or drop outdated goals.
• Goals are essential for giving managers, employees and organisations a sense of order, thus not setting them then the managerial competencies would be ineffective. Setting goals is especially important in adaptive and innovative decision-making.
• Goals are also called objectives, purposes, targets or better yet results to be attained and thus they indicate the direction in which decisions and actions should be aimed. They serve to focus individual and organisational decisions and effort.

Learning Outcome 5

Rational Model

• This is a model that teaches and enables an individual or team to think in a coherent and realistic manner.
• The model helps teams maximize their goals within the confinement of their situation. There are seven steps in this model:
• Step 1 – Define and diagnose the problem, the team and managers must know the problem at hand by finding ways of understanding the problem fully.
• Step 2 – After the team have identified the problem they must find ways of solving the problem by setting goals and objectives. The goals indicate the desired result of what is to be achieved and by when they should be achieved.
• Step 3 – Searching for alternative solutions, this step involves the team looking for other ways to achieve the goal(s) by doing additional research on the problem in order to find better solutions and adjusting their goals according to the feasibility of the solutions they find.
• Step 4 – Compare and evaluate alternative solutions, the identified alternative solutions must be compared and evaluated and also the cost of each solution must be determined
• Step 5 – Choosing from among alternative solutions, selecting a solution that will best satisfy the problem at hand
• Step 6 – Implement the solution selected, members in the team must agree on the solution chosen for it to be implemented effectively.
• Step 7 – Follow up and control, at times implementing the solution might not accomplish the desired results so the teams must control the implementation process by conducting follow ups and placing corrective measures/steps in place

Bounded rationality model

• This model focuses on how rationality can limit our thinking and how day to day decisions are made by people. This model highlights how people make different decisions even when they are confronted with the same set of circumstances or situations.
• Satisficing – The process of choosing an objective, goal or solution.
• Limited search – The process of considering all your options or all options available to you and then choosing one that suits you most or best.
• Inadequate or misinterpreted information – It is not having enough knowledge or information about a problem and this usually affects the business or the decision making of the managers.
• Information-processing biases – 1. Availability bias, people who are good at recalling events tend to overestimate the events in future

 2. Selective perception bias, people only look at for information that suites their way of thinking.

3. Concrete information bias, direct experience prevails over abstract information.

4. Law of small numbers bias, people view incidents as if they represent a larger population even when they are not.

Political Model

• It involves the interests and goals of very influential/powerful internal and external investors(stakeholders). To have power a person must have the ability to influence or control the following:
• Problem definition – stakeholders define the problem for their own benefit.
• Divergence in goals – Recognition of conflict for goals among stakeholders, businesses primary goals often reflect the goals of the stakeholder with the most “power”.
• Divergence in solutions – Stakeholders often hold back information for their own interests in situations of a win-lose. Relevant information should be presented openly.

We hope the blog was informative and made it easier to understand the chapter