(1) Define decision-making

Decision-making is the process of deciding on the course of action after gathering information on

different alternatives and carefully examining each possible solution/alternative that could be

employed in attempt to solve a problem. It is a process that is generally applied when important

decisions ought to be made

The role of decision-making for management and employees

• Decision-making helps with the selection of the best alternative/course of action.

              It is a problem-solving approach whereby a specific course of action is chosen from various

              alternatives. It helps decide on the final course of action after applying some criteria to

               examine alternatives.

• Decision-making enables proper utilization of resources.

               When properly evaluated decisions are made, wastage of resources such as money is

               minimized.

• Decision-making promotes the achievement of goals and objectives.

               The decision-making process includes identifying the best alternative and then employing

               resources effectively, which in turn enable the organisation to reach goals and objectives as

                desired.

• Decision-making promotes employee motivation

 

(2) The conditions of certainty, risk and uncertainty

CERTAINTY

Certainty is the condition under which individuals are fully informed about the problem, alternative solutions are obvious and they like likely results of each solution are clear.

This condition means that both the problem and alternative solution are known and well defined. Decision making under the certainty is the exception for most middle managers, top managers and various professionals.

RISK

Risk is the condition under which individuals can define events, identify alternative solutions and state the probability of solution leading to the desired results. Risk exists when the individual has some information regarding the outcomes of the decision but does not know everything when making decision. Under the condition of risk, the manage may find it helpful to use probabilities.

 

UNCERTAINTY

Uncertainty is the condition under which an individual does not have the necessary information to assign probabilities the outcomes of alternating solutions. Infect the individual may not even be able to define the problem much less identify alternative solution.

 

(3) describe the characteristics of routine, adaptive and innovative decisions

Adaptive

 

• Continuous improvement which requires commitment to constant diagnosis of technical,

                organisational and managerial processes in search of improvement. Decisions about

                continuous improvement is driven by goals of providing better quality, improving

                efficiency and responding to customers.

• Adaptive decisions often involve modifying and improving upon an old decision or practice.
• It consists of streams of adaptive organisational decisions made over time

 

Routine

 

•  Various routine decisions are covered by already existing rules or standard operating
• procedures

 

Innovative decisions

 

•  Leading edge innovations take years to develop as it involves numerous professional
• specialists and teams.
• Innovative decisions don’t normally happen in a logical and orderly sequence.
• They are often based on incomplete and rapidly changing information

 

(4) HOW the goals affect the business

• Organisational goal is the starting point of planning process. In the

               mission statement it is where goals flow directly but specific.

• A business has different goals and which are set in different

                department of the organization such as finance, sales, revenue of

                the business and more.

 

The impact of goals in a business

• goals provide the business with guidance and agreement on how

the business is directed

• employees are encouraged and motivated, inspired by goals, so

that they can improve their performance within the organization

and achieve those goals and they receive the rewards.

• Effective evaluation of employee and the business performance,

and the control of business resource can be done through setting

effective goal.

(5) compare and contrast the rational, bounded rationality and political models of decision-making

 

 

 

 

 

 

 

 

 

 

 

RATIONAL MODEL

Prescribes a series of steps that individual/team should follow to increase the likelihood that their decision will be logical.

 

 

 

 

 

BOUNDED RATIONALITY

The bounded rationality is the idea that rationally is limited when individuals make decision, the human mind has only limited capacity to evaluate and process the information that is available. Therefor the individual making bounded decisions are bound to make satisficing choices in complex situations.

 

 

 

POLITICAL MODEL

The political model. In contrast to the rational, individuals in political model do not focus in a single issue but in many organisational problems that reflect their personal gaols. In contrast to the bounded rationality model, the political mode does not assume that decisions result from applying existing standard operating procedures, programs and routines.