Group name:

Aspen inc.

Members that participated in the activity:

Initial & Surname	Student number	Contribution
CC KERSLAKE	32019556	Outcome 1
KS PORTER	33646716	Assisted with outcome 1 and outcome 2
V VAN ZYL	32261764	Outcome 4
J SCHOLTZ	31582168	Assisted with outcome 4
CK FERREIRA	32668538	Outcome 2
A RAJARAM MANIRAM	31467156	Outcome 5
S SHAIKH	31973787	Outcome 3 and assisted with outcome 5
EC OSLER	32257597	Assisted with outcome 3

Out come 1

Define decision making and the role of decision making for managers and employees

Decision making is a process of choosing a solution to an identified problem with the information gathered. Managers of firms face a lot of problems and use decision making in everyday life to run there company, employees also use decision making skills to finish a task set by the manager.

To have decision making skills you must be able to follow simple steps called the decision-making process. As a manager or an employee of a firm you must consider the fundamental components of the decision-making process, such as types of problems, types of decisions, managerial competencies, decision making conditions, goals and decision making and decision making models. There are three types of decision making models namely: Rational model, bounded rationality model and the Political model.

Outcome 2

Difference between Certainty, Uncertainty, probability and risk in decision-making:

1)Certainty is where every person are fully aware of the all the problems and also the

solution to those problems. When all the individuals are informed decision-making is easier.

When decisions are made of certainty it is managed by middel managers, top managers and

professionals.

2)Risk is when all individuals are informed about a decision. Risk that was taken can give

them an indication of what to decide in the future.

3)Probability is if a decision will be made or not. There is a 50/50 chance

-Objective probability

Where an outcome can be made by facts or numbers. Where they can prove it.

-Subjective probability

Where an outcome can be made by jugdement. It can be judged by past experience or by

beliefs

4)Uncertainty is where the individuals are not aware or informed. When they do not know

what the problem is they cannot decide on solutions. When you are uncertain it will affect

your future decision-making.

Outcome 3

There are different types of decisions

Decisions may be classified as routine, adaptive or innovative, these categories reflect the types of problems faced and types of solutions considered.

Routine decisions

•  Routine decisions are standard choices made in response to relatively well-defined and common problems with alternative solutions  
• Established rules or standard operating procedures covers the way in making various routine decisions

Adaptive decisions

• This is choices made in response to a combination of moderately unusual and fairly uncommon problems with alternative solutions.
• Adaptive decisions involves modifying and improving past routine decisions and practices.
• Adaptive decisions are necessary for continuous improvement

Innovative decisions

• These decisions are choices based on the discovery, the identification and the diagnosis of unusual and ambiguous problems.
• The development of unique or creative alternative solutions.
• These solutions involve a series of small,Interrelated decisions made over a period of months or even years.

Out come 4

How do goals affect decision making

Decision making in organizations under the conditions of risk and uncertainty is coupled directly with goals in one of 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, revise current goals or drop outdated goals.

Setting goals is especially important in adaptive and innovative decision making. Goals are crucial in giving employees, managers and organizations a sense of order, direction and meaning.

Outcome 5

The Rational Model

This is based on the study of human behavior. It includes steps that individuals need to follow to increase the likelihood that their decisions will be logical and sound. A rational decision permits the maximum achievement of goals within limits of the situation. The heart of successful administration is efficiency, which is making good decisions with rationality. The rational model is all about the rationality in individuals’ decisions.

The rational decision-making process has 7 steps.

 Namely,

1. Defining and diagnosing the problem,
2. Setting goals,
3. Searching for alternative solutions,
4. Comparing and evaluating alternative solutions,
5. Choosing from among alternative solutions,
6. Implementing the selected solution and lastly,
7. Following up and controlling.

Step 1:

Define and diagnose the problem.

Managers and employees need to be aware of the true problems and the possible the causes of the problems for effective decision making to occur.

Defining the problem includes 3 skills, namely,

Noticing, Interpreting and Incorporating.

By noticing, the person can identify and monitor external and internal factors contributing to the problems.

Interpreting involves finding out which factors are causes and which are merely just symptoms of the problem.

Incorporating involves relating the interpretations to the desired goal.

An example of this could be having a stomach ache. You need to find out if this is merely a symptom of something bigger or it is the problem itself.  By finding this out, you can form solutions.

Numerous questions must be asked to find the problem and define it.

Step 2:

Set goals

After the problem is defined, goals need to be set to eliminate the problem. A hierarchy of goals can be created to solve the problem or identify the real problem and set the goals in hierarchy to solve it. The goals must include the desired results for example, what needs to be achieved and what is the deadline. Thereafter resources can be allocated. Setting goals can be difficult and time consuming but it vital in success as it can help you what path is the correct one to take.

For example, trying to find out what university to attend after being accepted by both.

To arrive at the correct answer, you must weigh out all the alternative paths to achieve your goal, sometimes without even having all the information.

Step 3:

Search for alternative solutions

Alternative ways need to be considered when wanting to achieve a goal. 

This can be done by researching, thinking out of the box and attaining additional information. If you cannot find feasible solutions, then you might need to consider changing your goal. For example: when someone sets an impossible goal, they end up working extra hard and taking on a lot od stress which could lead to mental health problems. Thus, achievable goals are important so that extra time isn’t wasted.

Step 4:

Compare and evaluate alternative solutions

Comparing and evaluating needs to be done with the alternative solutions in order to narrow it down to the best solution. This can be done by weighing out the pros and cons of a solution.

Step 5:

Choose from among alternative solutions

Most people might think that this is a final step in decision-making however, it when dealing with complex problems, the solution is never just straightforward. It involves a lot of risk and uncertainty; thus, it is but one of the decision-making steps.

Step 6:

Implement the solution selected

Sometimes the solution might not always be successful.  However, if it is then it must be implemented. If it cannot be implemented, a new solution must be considered.

Step 7:

Follow up and control

Implementing the solution might not always achieve the goal. The solution implemented must be controlled and follow ups must be done to make sure that is it is working. This is like an evaluation process.

The rational model sounds ideal however it is determined by the human mind and a humans decision making ability.

Bounded rationality model

Emphasises the limitations of rationality and describe why various individuals make different decisions or choices when they have exactly the same information.

The bounded rationality model refers to an individuals propensity to do the following:

• Select less than the best goal or alternative solution (satisficing)
• Engaged in a limited search for alternative solutions
• Have inadequate information and control over external and internal environment forces influencing the outcomes of the decision

     Satisficing:

• selecting an acceptable goal/alternative solution
• Acceptable goal might be easier to identify and achieve, less controversial and safer than the best available goal.

     3 Factors influence a satisficing decision

• Limited search
• Inadequate information

• Information-processing bias

      The political model

• The political model explains the decision making process in terms of the specific interest and goals of powerful external and internal stakeholders.
• Power: the ability to influence or control individual, department, team or organisational decisions or goals.

3 Factors influencing political decision-making:

• Stakeholders
• Choice of goals

Alternative solutions