BMAN121 SU5 – Chapter 14 Efundi Blogs (20 marks)                                            

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:

Sensory Security Pty(Ltd)

Members that participated in the activity:

Initial & Surname	Student number	Contribution
B.R. Brown	31960243	1st learning outcome
K.K. Molokoane	31892663	5th learning outcome
K.S. Anthony	32644582	4th learning outcome
P.S. Makhanya	32100922	2nd learning outcome
K.P. Legotsa	31991890	3rd learning outcome
R.D. Mohohla	31926215	3rd learning outcome
Sedibe A.	31485693	2nd learning outcome

LO1.

Decision making Definition:

Decision making is a course of action taken from a set of alternatives to reach achievements set by the organisation and mangers these are the goals and objectives. Decision making is an ongoing process of making choices by identifying a decision, gathering information and looking at alternative solutions. Effective managers and employees can systematically base various types of decisions on the nature of the problem to be solved. Managers rely on all six managerial competencies to make a decision, which include communication, planning, administration, teamwork, strategic action, global awareness, emotional intelligence and self management. Conversely, decision making process is basic to all managerial competencies.

LO2.

Decision Making Conditions 

1.Certainty: 

The condition where thorough research has been done about a problem under which individuals know all the necessary information about how the problem should be solved, and are certain about all the outcomes of all the solutions they have made to solve the problem.

 Example : The need to meet customers, contract or regulatory requirements. 

2.Risk 

Risk is the condition where the individuals can identify and define problems, create alternatives solutions on how to solve the problem and stating the probability of each solution leading to achieving the desired results even though there's no guarantee if each solution will work to attain the desired results.

 For example :Spur can analyze potential customer demographics, supply logistics and the local competition and come up with reasonable forecasts of how a successful restaurant would be in each possible location.

Probability : 

The percentage of time that a specific outcome would occur if an individual were to make a particular decision a large number of times Objective Probability : When more accurate information is used to determine the probability of a given outcome. For example, using past data and statistics. Subjective probability : 

The kind of probability which is influenced by an individual's personal judgment and opinion or their own experience about whether or not a specific outcome is likely to occur. 

3.Uncertainty Uncertainty is the condition under which an individual does not have the necessary information to assign probabilities to outcomes of alternative solutions. It sometimes suggest that the problem and the alternative solution are highly unusual. Uncertainty is present even when organizations do considerable research and planning before committing resources to projects.

LO3.

Designing jobs

- Involves the establishment of the employee’s job-related responsibilities.

- The first step to designing jobs is Job specialisation.

- Job specialisation is how responsibilities or duties are divided into smaller and manageable parts.

- This improves productivity and is a more efficient way.

- Job rotation involves systematically moving employees from one job to another.

- Employees gain skills from job rotation and they can also be flexible

- Job enlargement increase total number of tasks of an employee.

- Job enrichment increase number of tasks and associated responsibility.

Establishing reporting relationships

Also known as chain command. First a reporting line has to be determined to know who in charge of

certain activities. Secondly, the span of management must be established. This is to know how many

people report to one manager. For this to work, various factors have to be taken into account .

Co-ordinating activities

This last building blocks is also related to specialisation but more complex. It’s done to take advantage of

specialisation in order to achieve the goals and objectives of a business such as effective productivity.

When tasks are divided, this results in groups being interdependent on each other. Eventually the

working as different groups results in one product.

Co-ordinating Activities

Activities carried out in each function of a business makes other functions vulnerable to one

another, hence introduction of small sub-divided parts of works that focuses its influence on

skills one has to specialise on. Tasks are carried out timeously just so not to hinder other

functions as well. Tasks have a followed structure that one can’t skill to simply speed up the

process. Resources used to carry out tasks are also used by other functions to meet their

proceeds.

For example, drivers to one specified company only transport they do not pack. It is required

of them to bring up stock timeously so that packers can make product available before the

opening of store or sale date on the shelves.

Establishing authority relationships

In a business there is authority from the above that gives responsibility to give authority to

the subordinates- end cycle. It influences, that even appointing persons to

goals/responsibilities has to come up on that very same chain of command.

For example, I cannot authorize any work to any member of a group for I do not have the

authority to give responsibility. We as a group cannot decide when to submit the work

assigned to a specified due date, we only meet the deadline and that is our responsibility.

Establishing reporting relationship

There must be lines of reporting as power of authority has limits unless you are an owner of

the business and you actually have no one to report to. You have to report to one that has

specific power to assist you in everything you need. You don’t just report to any manager and

managers job analyses differ hence unbalanced power.

For example, should I not be able to submit on time I have to alert first my nearest partner, if

I cannot give a report to my partner, I can report directly to the leader so that they pass my

message all over to the owner.

LO4. How does goals affect decision making

 Goals give the employees as well as managers a sense of direction and order.

 Goals indicate the direction in which activities should move and how resources should be used

Which will ultimately make decision making easier?

 Goals guide people behaviour which could in turn motivate individuals to speed up the decision

Making process so that goals can be achieved as soon as possible

 Goals also provide a broad direction for decision making in qualitative terms

Once, goals are set, decisions can be made in terms of which departments will carry out which

Task and how task will be carried out

LO5. Differentiate between the rational, bounded rationality, and political models of

Decision making

• Rational model

The rational model prescribes a series of steps that individuals or teams should follow to increase the likelihood that their decisions will be logical and sound. A rational decision permits the maximum achievement of goals within the limitations of the situation. The definition addresses means- how best to achieve goals not ends(the goals themselves)

Seven step process

1. Define and diagnose the problem.

2. Set goals

3. Search for alternative solutions

4. Compare and evaluate alternative solutions

5. Choose from among alternative solutions

6. Implement the solution selected

7. Follow-up and control

• Bounded rationality model

Herbert Simon, a management scholar, introduced this model in the mid-1950s. It contributed significantly to the decision of the Swedish Academy of Sciences to award him the 1978 Nobel Prize for economics for his ‘pioneering research into the decision-making process within economic organisations’. The bounded rationality is particularly useful because it emphasises the limitations of. The selection of alternative solutions to be implemented

• The actions and success of the organisation

Political process is likely to occur when decisions involve powerful stakeholders, disagreement over choice of goals and people who are not searching for alternative solutions, These factors are highly interrelated from alternative solutions to stakeholders and choice of goals-which also depicts political decision making. Rationality and thus provides a better picture of day-to-day decision making processes used by most people. This model partially explains why different individuals make different decisions when they have exactly the same information.

The bounded rationality model refers to an individual’s tendencies to do the following:

• Select less than the best goal or alternative solution (known as satisfying)

• Engage in a limited search for alternative solutions

• Have inadequate information and control over external and internal environment forces influencing the outcomes of decisions.

• Political model

The political model describes the decision making process in terms of the particular interest and goals of powerful external and internal stakeholders. Before considering this model, however, we need to define power. Power is the ability to influence or control of the following factors:

• The definition of the problem

• The choice of the goal

• The consideration of alternative solutions