Decision Making - the action or process of making important decisions.

The Role of Decision-Making

- includes defining problems and gathering of information that will result in greater outcomes for the company's objectives. Both managers & employees take part in such important decision making for more possible solutions to be found. An effective manager relies on all six managerial competencies to make decisions. Decision making processes are basic to all managerial competencies.

DECISION MAKING CONDITIONS

• The condition under which individuals in an organization make decisions reflect the environmental forces of which the individuals can not control but which in the future many influence the decision outcome
• Affected by forces ranging from new technologies or entrances of new competitors into market to new laws or political turmoil
• Manager should estimate their potential impact if not measuring the magnitude of these factors
• Impact of decision making is only seen in the future but if they take a long time to happen managers find it hard to identify the impact
• Amount of information contributed to the decision making and its accuracy are crucial to sound decision making

Conditions used in decision making:

Certainty

Risk

Uncertainty

• Certainty

*Conditions under which individuals are fully informed about a problem.

*Where alternative solutions are obvious and each solution result is clear.

*Problem and solutions are known and defined well.

*Decision maker only choose solution that beat suit and have better outcomes .

*Decision making is an exception for middle, top and various professionals mostly.

Risk is the condition in which individuals can:

• Define a Problem
• Specify the probability of certain events.
• Identify alternative solutions
• and state the probability of each solution leading to the desired result

in general risk means that the problem and alternative solutions fall in between the extremes of being relatively common and well defined, not being usual and ambiguous. E.g, the banking industry's credit policy is used in more strictly manner than in the past. Before,banks used to issue more hoe loans at high interest rates but that made more transactions to end up in bad debts. Because of high risks and ambiguous conditions now banks are more cautious irrespective of the interest rates. The measure of risk captures the possibility that future events will render the alternative unsuccessful. Probability is the percentage of times that specific events would occur if an individual were to make a decision more times.

• Objective Probability - The likelihood that a specific outcome will occur, based on hard facts and numbers.
• Subjective Probability - The likelihood that a specific outcome will occur, based on personal judgement and beliefs.

Uncertainty is the condition in which an individual does not have the necessary information to allocate probabilities of the outcomes of alternative solutions. For that matter an individual may even not be able to:

• Define the problem.
• Much less identity alternative solutions.
• and also possible outcomes,

Often uncertainty suggests that both the problem and the alternative solutions are ambiguous and highly unusual. Managers face uncertainty in day to day basis as factors that may affect a decision like price, production cost, volume or future interest rates are difficult to predict and analyse.

Routine Decisions -  These are standard choices for common problems with alternative solutions and is achieved through routine rules or standard operating made up of computer software,

Adaptive Decisions - Are choices made for unusual and unknown problems with alternative solutions. Mostly includes changing or improvement on past routine decisions and is important for continuous improvement which is driven by goals of providing good quality, improving efficiency and having contact with consumers.

Innovative Decisions -  Choices made on the discovery, identification and diagnosis of unusual and unclear problems as well as development of innovative solutions which involves a series of bits of interrelated decisions made over a period of time.

How goals affect decision-making

● Goals are crucial in giving employees, managers and organisations a sense of order, direction and meaning. Setting goals is especially important in adaptive and innovative decision making.

● Goals are results to be attained, and thus indicate the direction in which decisions and actions should be aimed. The goals you set now either short, medium or long term will always affect the decision you make today or tomorrow. For example If a business decides to employ more people it will cause productivity to increase hence causing profits to also increase.

Comparing and contrasting the rational, bounded rationality and political models of decision making.

Rational model of decision-making.

● Prescribes a series of steps that individuals or teams should follow to increase the likelihood that their decisions will be logical and sound.

● It is a seven-step process

● Individuals are bound to use this procedure in circumstances including states of close to assurance or low risk, the is, the point at which they can appoint target probabilities to result.

-Bounded rationality model.

● The bounded rationality model is particularly helpful on the grounds that it emphasizes the restrictions of rationality and in this way gives a superior image of the everyday decision-making process utilized by a great number of people.

● It explains why different individuals make different decisions when they have exactly the same information.

-Political model

● Describes the decision-making process in terms of the particular interest and goals of powerful external and internal stakeholders.

● Political processes are the most likely to occur when decisions include incredible stakeholders, contradiction over selection of objectives and individuals who are not looking for alternative solutions.

Duvandre McPherson 31931669  ( Outcome 1)

RG Makwala 32028156 & Boipelo Basenare 30727448 ( Outcome 2)

Peggy Rampone 32184298 & Onkokame ( Outcome 3)

Talifahni Mulaudzi 31874649 ( Outcome 4 )

Runa Mnisi 32173024 (Outcome 5)