LEARNING OUTCOMES:

1. Define decision-making and explain the role of decision-making for managers and employees
2. Discuss the conditions of certainty, risk, and uncertainty under which decisions are made
3. Describe the characteristics of routine, adaptive, and innovative decisions
4. Explain how goals affect decision-making
5. Differentiate between the rational, bounded rationality, and political models of decision-making

 

Group name:

THE INCREDIBLE LOGISTICS

Members that participated in the activity:

Initial & Surname	Student number	Contribution
B Skosana	31174620	ROLE OF DECISION-MAKING FOR MANAGERS AND EMPLOYEES
B Maine	26518384	DEFINED DECISION-MAKING AND DISCUSSED THE CONDITIONS OF CERTAINTY
S. L Rakomane	30557410	DISCUSSED THE CONDITIONS OF UNCERTAINTY UNDER WHICH DECISIONS ARE MADE
M Mlambo	30462916	DESCRIBED THE CHARACTERISTICS OF ROUTINE, ADAPTIVE AND INNOVATIVE DECISIONS
S. P Ndlovu	32955359	EXPLAINED HOW GOALS AFFECT DECISION-MAKING
L. P Mosia	31693814	THE DIFFERENCE BETWEEN THE RATIONAL, BOUNDED RATIONALITY AND POLITICAL MODELS OF DECISION-MAKING

 

LO1- Define decision- making and explain the role of decision-making for managers and employees

Decision- making is the act or process of deciding something especially with a group of people. Decision- making in management is an essential skill required for the organisation to succeed.

Role of decision-making for Managers:

The role that decision-making plays for managers is to assist in achieving objectives, increase efficiency in the workplace, to facilitate innovation, ensure that there is growth within the business, to also ensure that the business utilizes its resources properly and to help deal with problems and challenges that may arise, and lastly to keep the employees motivated.

Role of decision-making for employees:

The role of decision-making with employees is that it improves the morale of the employees, creates teamwork among employees and ensures that employees are responsible when doing their work and can account for their work.

LO2- Discuss the conditions of certainty, risk, and uncertainty under which decisions are made

Certainty

It is the condition under which individuals are fully informed about a problem. Solutions are obvious and the results of each solution are clear. Certainty allows anticipation of events and the outcomes of the events, this means that the problem and the  solutions are well known and defined

Risk

The condition where individuals can be define a problem, specify the probability of certain events, identify solutions and state the probability( the amount of times a specific outcome can occur). There are two types of probability namely subjective probability and objective probability.

• Subjective probability: the likelihood that a specific outcome will occur based on personal judgement.
• ​​​​​​​objective probability: the likelihood that a specific outcome would occur based on facts.

Uncertainty

The condition where individuals do not have the necessary information to assign probabilities to outcomes of solutions. They may not be able to define problems and find alternative solutions.

LO3- Describe the characteristics of Routine, Adaptive, and Innovative decisions

Routine Decisions

They are customary decisions taken up to combat non-ambiguous problems that have alternative solutions. These decisions are generally made according to a set of standard procedures. The examples of these types of decisions usually take place when working with a certain type of computer software

Adaptive Decisions

These consist of decisions that often derived from the improvement of past routine decisions that are set out to combat fairly unusual and not common problems with alternative solutions. These decisions are vital for continuous improvement.

Innovative Decisions

Unusual and ambiguous problems first have to be discovered and thereafter a decision will be taken based on the identification and diagnosis of the problem through the development of unique and innovative solutions. These types of decisions generally require a series of small, interrelated decisions made over a period of months or a year.

LO4- Explain how goals affect decision-making

Decision making under risk and uncertainty conditions are affected by goals in the following ways:

• Decision-making process is triggered by an effort to discover new goals, revise current goals or drop outdated goals.
• Decision-making process is triggered by a search for better ways to achieve established goals.
• Goals are crucial in giving employees and managers a sense of order, direction and meaning. 

LO5- Differentiate between the Rational, Bound Rationality, and  Political models of decision-making

Rational model

It consists of seven(7) prescriptive model that entails the process of routine decision-making, involving low risk situations.

Bounded Rationality Model

This model insists on explaining why different decisions are made by different individuals in the same context. The limitations of of rationality are also greatly highlighted in this model. The model highlights the following actions often taken up by individuals:

• Engaging in limited searches for alternative solutions
• The influence that incomplete information and level of control that they have over external and internal environmental forces have on the outcomes of a decision and finally
• Satisfying- the selection of an alternative solution or a less acceptable goal than the best

Political model

A description of the decision-making process with regard to the goals and interest of external and internal individuals with power. Power being the key word is the level of influence that is had over individuals, departments, teams, organisational decisions or goals.