Group name:

 MNF ENTERPRISE

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

Members that participated in the activity

initials and surnamestudent number contribution N.S NENE30763770COMPILING A.M MATTHEWS27205649LEARNING OUTCOME 2O.H SEKGALO31557732LEARNING OUTCOME 2D.M MOKOENA 27334465LEARNING OUTCOME 3M.G MPURU31198023LEARNING OUTCOME 3T.C MMOTLANA31800564LEARNING OUTCOME 1A.L ESTRICE32795297LEARNING OUTCOME 4T.B MORAKE27830357LEARNING OUTCOME 5S.K MOSIKILI30058678LEARNING OUTCOME 5

1.decision making can be defined as the process that includes the ability to define the problems, gather information, generate alternatives and choose a course of action

• The role of decision making for managers is to be able to plan and administrate goal they want to set as well as come up with a strategic action for the specific goal setting 

• The role of decision making for employees is to be able to achieve goal set by managers.

 

 2: DISCUSS THE CONDITIONS OF CERTAINTY, RISK AND UNCERTAINTY UNDER WHICH DECISIONS ARE MADE.

1. CERTAINTY.

Refers to the condition in which decision making is without risk (fully informed about a problem) and know  the exact outcome of the decision before making that decision. E.g investing a certain amount knowing for certain the return % and how much to expect when the investment matures.

- The condition of certainty allows anticipation of events and their outcomes. This means that both the problem and alternative solution are known and well defined.

- Top and middle manager are in exception to this decision making condition, however the lower manager make day-to-day decisions of certain. E.g knowing how many staff is needed during weekly sales trends, for particular events such as the Easter.

2. RISK

Refers to the condition in which individuals can define the problem, specify the probability, identify alternative solutions and state the probability of each solution leading to the desired results. E.g When trying to decide which business venture to pursue after considering all the possibilities.

- A risk is noy an uncertainty (where neither the probability nor the mode of occurrence is known)

3. UNCERTAINTY 

It is the condition under which an individual does not have the necessary information to assign probabilities to the outcome of alternative solutions.

- Suggests that the problem and the alternative solution are both ambiguous and highly unusual.

- Too much uncertainty is undesirable, manageable uncertainty provides freedom to make creative decisions

3. Describe the characteristics of routine, adaptive and innovative decisions 

Characteristics of routine decisions 

 

• Covered by established rules or standard operating procedures

• Usually made by computer software, e.g computerised airline reservation systems

• Taken at lower level management, e.g supervisors 

• They are small scale in nature,e.g cannot alter the overall course of the business 

 

Characteristics of adaptive decision

 

• Involve modifying & improving upon past routine decisions 

• Significantly based on the concept of continuous improvement, e.g reviewing solutions and to a problem and tracking the progress in the future 

• The main goal should be to provide better quality to customers,e.g having customers rate a product or service 

 

Characteristics of innovative decisions 

 

• Consists of the discovery, identification any analysis of unusual problems 

• Solutions include connected decisions done over a long period of time, months or even years

• The aim is to find a long lasting solution, usually done by top level management, e.g CEO deciding how to keep increasing profits for the next 5 years .

4.How goals affect decision making 

• Values drive your actions and motivate you to achieve your goals set out 

• Goals motivate you to establish your priorities and guide you when making decisions

• Goals can help you be more useful in organising sections .they help you manage your time efficiently 

• Goals can also greatly improve your working performance as you’re focused on achieving only one thing .

5.Different decision-making models

1. The rational model

• this model consists of seven prospective step. Day and guide us on how the decision should be made when making decisions in  situations involving conditions of near certainty or low risk.

 

The seven perspective steps: 

1. Define and diagnose the problem

2. Set goals

3. Search for alternative solutions      

4. Compare and re-evaluate alternative solutions

5. Choose among alternative solutions

6. Implement the selected solution

7. Follow-up and control

 

2. bounded rationality model

-Emphasizes the limitations of rationality and explains why individuals make different decisions when the Same information is served

-This model refers to an individual’s tendencies to do with the following  

• select less than the best call or alternative solution (satisficing) 

• engaging in a limited search for alternative solution  

 

Satisficing 

•When selecting an acceptable goal or alternative solution

• acceptable call might be easier to identify and achieve less controversial and safer than the best available goal

 

Three factors influencing satisficing decision:

1. Limited search

2. Inadequate information

3. Information-processing Bias 

 

3. The political model

-The model describes the decision making process in terms of the particular interest and goals of powerful external and internal stakeholders. 

 

three factors influencing a political decision

1. Stakeholders

2. Choice of balls

3. Alternative solutions