Group name:

Dynamic Inc

Members that participated in the activity:

 

Initial&Surname	Student Number	Contribution
Xolile Made	31708366	L01
Tshiamo Lelati	32013655	L02
Bonolo Lebelo	32002858	L02
Bridge Phukubye	31615112	L03
Sinenkosi Ndzinisa	31964346	L03
Palesa Mokoena	25797352	L04
Sukoluhle Mkhatshwa	32670214	L05
Neria Motsiri	30453046	L05

L01 - Define decision-making and explain the role of decision-making for managers and employees.

Decision Making
Decision making is the process of making choices by firstly defining the problem,
followed by identifying a decision, gathering information, and assessing alternative
resolutions. Usually there are decision-making steps to follow to help make
deliberate and considerate decisions.

Role of decision making for managers
Decision-making is regarded as one of the important functions of management.
Decision making process is continuous and indispensable component of managing
any organisation or business activities. An effective manager relies on all six
managerial competencies to make decisions, theses competencies are
communication, teamwork, planning and administration, strategic action, Global
awareness and lastly emotional intelligence and self-management.

Role of decision-making for employees
Involving employees when making decisions about the company's future helps
strengthen your relationship with each employee. Participation in 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.

L02 - Discuss the conditions of certainty, risk and uncertainty under which decisions are made.

Uncertainty

Under the condition of uncertainty mangers do not know what is going to happen after a particular decision has been taken. Managers have very little information at their disposal and they are uncertain about the reliability of the information. Therefore, they are not well informed possible alternatives and their outcomes. Uncertainty arises from complex and ambiguous problems and alternative solutions. Under uncertainty managers make use of intuition, judgement and experience to make decisions. This means that there is more possibility of incorrect decisions or assumptions. Examples of situations in which uncertainty may arise is when a business introduces a new product in their product range, also when a business adopts new technology.

Risk

Risk is the condition under which managers have factual, but inadequate information. Managers have the knowledge of an alternative course of action, but without complete information they cannot accurately determine the outcome. Decision making under risk condition is accompanied by moderate ambiguity and complexity. Managers may use subjective probability which is based on their personal judgement and experience. They may also use objective probability which is based on hard facts and numbers. A good example of risky condition would be when making decisions about restaurant locations, Wimpy can analyse potential customer demographics, traffic patterns, supply logistics and the local completion and come up with good forecasts of how successful a restaurant would be in each possible location.

Certainty

Under the condition of certainty managers have perfect knowledge of the information needed to make a decision. Managers know what the outcome of a particular decision will be. This condition is ideal for problem solving – outcomes are known and their consequences are certain. Under the condition of certainty there is low ambiguity and complexity. A good example of the condition of certainty would be when a company invests money at a bank, it is certain that it will yield interests on the amount of money invested.

L03 - Discuss the characteristics of routine, adaptive and innovative decisions.

Routine decisions

These are standardised decisions made on a daily basis. Without much thought involved. These are standardised choices which are clearly identified and well defined on how to deal with specific problems. The establishment of these decisions are created and governed by set rules, which dictate the manner in which a problem should be solved. The way problems are solved or decisions are made, is in a standardised manner and are sometimes a skills needed for certain jobs. Routine decision making basically entails doing things in a certain manner, without breaking the norm.

An example of routine decision making: A business restocking office materials when supplies are low.

Adaptive decisions

These are decisions that are made in uncommon circumstances. These decisions involve having to improve in order to ensure sustainability of a business. Adaptive decision making is basically continuous improvement to the environment or changes in the environment. This requires a constant strive to improve, by identifying the technical, organisational and managerial processes in search of improvement. This type of decision making entails the need to be better.

Example: Providing better products in comparison to competitors in order to survive and thrive in the market.

Innovative decisions

These are solutions that result from unique and “out of the box “thinking .These solutions are new and result from creative thinking in order to solve existing problems. Innovative ideas take a long time to generate and might even take years. These decisions are generated by groups of specialised professionals. Innovative ideas entail them being the most cost efficient and use up less factors of production.

Example: Technological inventions such as wind turbines, concentrated solar power or geothermal energy.

L04 - Explain how goals affect decision-making.

Decision-making in organisations 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.
Goals are crucial in giving employees, managers, and organisations a sense of order,
direction, and meaning.

Some examples of decision making based on goals are:

 Use a decision journal and capture the issue, the expectations, the assumptions, and
the time-frame for evaluating results based on your goals, this will help people get
more innovated and get better at their given tasks.

 Take the time to reflect on previous decision-making processes and jot down how one
can improve the process the next time one faces a similar decision, thus making an
improvement on the stuff by also providing feedback.

Decision Making: Improve and master this core skill with these and more:

 Generate and evaluate alternatives together. Generating and evaluating any
alternatives is easy when based on knowledge, experience, and creativity.

 Get an informed opinion. getting a personal opinion will improve your decision-
making skills giving you self-confidence and reassurance that what you are doing is
right.

L05 - Differentiate between the rational, bounded rationality and political models of decision-making.

Rational Model	Bounded rationality model	Political model
Dictate a series of steps that individuals or teams should follow to increase the likelihood that their decisions will be logical and sound.	Explains why make different choices although they have the same information. Involves the following individual tendencies:	Describes decision making process in terms of the interest and goal of powerful internal and external stakeholders. To have power is to be able to influence or control the following factors:
Step 1-define and diagnose the problem: You first notice the external and internal environmental forces to decide which ones are contributing to the problem. Then you interpret the problem by assessing the environmental forces noticed and determining which is the real cause of problems. Finally, you incorporate by relating those interpretations to the desired goal of the business.	Satisficing which is the practice of selecting an acceptable goal an alternative solution.	Factor 1- Problem definition: External and internal stakeholders try to define the problems for their advantage. In this method when things go wrong, they cast blame on an innocent individual or a partially responsible member, this is called scapegoating.
Step 2- Set goals: After the teams have defined the problem, the team the sets specific goals for eliminating the problem. Management could set a hierarchy of goals for the various levels in the organisation to solve the seeming problem.	Engage in a limited search for alternative solutions.	Factor 2- Divergence in goals: in this method, the likelihood of conflicting goals among stakeholders and that the choice of goals will be influenced strongly by the relative power of stakeholders.
Step 3- Search for alternative solutions: The team or individuals should look for alternative ways to achieve the goal. However, when there seems to be no feasible solution for reaching a goal, there may be a need for modifying the goal.	Have inadequate information and control over external and internal environmental forces influencing outcomes of decisions.	Factor 3- Divergence in solutions: In some instances where the achievement of a goal is a win-lose situation, stakeholders often distort and withhold information selectively to further their own interests.
Step 4- Compare and evaluate alternative solutions: After the team or individual have identified alternative solutions, they then need to compare and evaluate them. This emphasises on expected results and determining		Factor 4: the relative cost of each alternative.
Step 5- Choose from among alternative solutions: After the alternative solutions have been identified, compared and evaluated, the team or individuals must the choose one alternative solution among all the others.
Step 6- Implement the solution selected: A well-chosen solution is not always successful. If the selected solution cannot be implemented for some reason, another one should be chosen.
Step 7- Follow-up and control: Individuals or teams must control implemented activities and follow up by evaluating results. Feedback from this step could even suggest the need to start again and repeat the entire decision-making process.