Group Name: DREAMVILLE

Members that participated in the activity:

TOPIC: Learning outcomes: chapter 14

Learning outcome 1: define decision-making and explain the role of decision-making for managers and employees.

What is decision making ?

• This can be defined as the process of having to make important decisions/choices.

Role of decision making for

Managers & Employees:

• The decision making process plays a very important role for managers. This is mainly because for a manager to be effective they have to use all six managerial competencies and decision-making processes are basic to managerial processes. Managers have to communicate with their employees, plan & administrate by organising management teams that will implement their plans and therefore teamwork is crucial for this. Managers and employees also need to strategise every action they plan to make this also demonstrates self management competency.
• This shows us just how big of a role the process plays in managerial & employee positions.

learning outcome 2: Discuss the conditions of certainty, risk and uncertainty under which decisions are made.

1. Certainty

It is the condition under which individuals are fully informed about a problem, alternative solutions are obvious, and the likely results of each solution are clear. The future is highly predictable under conditions of certainty and such conditions exist in case of routine and repetitive decisions concerning day-to-day operations of a business. This condition means that both the problem and alternative solutions are well known and defined.

2. Risk

This is the condition under 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. This condition means that the problem and alternative solutions are either relatively common and known or they are unusual and ambiguous. Under the conditions of risk, the decision maker has incomplete information about alternatives but has a good idea of the probability of outcomes of each alternative.

3. Uncertainty

Conditions of uncertainty exist when the future environment is unpredictable and everything is in a state of flux. This is the condition under which an individual does not have the necessary information to assign probabilities to the outcomes of alternative solutions, the individual may not even be able to define the problem, identify alternative solutions and the possible outcomes. In this state, the decision maker must depend upon his/her judgement and experience to make decisions. There are techniques/ approaches to decision making under uncertainty namely; risk analysis, decision trees and preference theory.

Learning outcome 3: describe the characteristics of routine, adaptive, and innovative decisions

1. Routine decisions

• Routine decisions are standard choices made in response to relatively well-defined and common problems and alternative solutions.
• The way in which to make routine decisions is often covered by established rules pr standard operating procedures.
• These routine decisions are made by computer software.

2. Adaptive decisions

• adaptive decisions are choices made in response to a combination of moderately unusual and fairly uncommon problems with alternative decisions.
• It involves streams of adaptive organisational decisions made over time that result in a large number of small, incremental improvements year after year.

3. Innovative decisions

• Innovative decisions are choices based on the discovery, identification and diagnosis of unusual and arguable problems and/or the development of unique or creative alternative solutions.
• Because innovative decisions usually represent a sharp break with the past, they normally do not happen in a logical, orderly sequence.

Learning outcome 4: Explain how goals affect decision making

• The business’s goals and objectives will affect how the business operates and the decision that are made.
• Goals give the business a sense of direction and meaning, and necessary decisions must be made in order to reach those goals.
• Decision-making in organisations under the conditions of risk and uncertainty is coupled directly with goals in one of two ways:

1)The decision-making process is triggered by a search for better way to achieve established goals.

2)The decision-making process is triggered by an effort to discover new goals, revise current goals or drop outdated goals.

• When goals are clear to the business, making decisions becomes easier.
• Businesses should use their goals as guidelines to making decisions.

Learning outcome 5: differentiate between the rational, bounded rationally, and political models of decision-making.