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 rational, bounded rationality, and political models of decision-making.

                           vaal logistics

1.Decision-making

• include defining problems, gathering information, generating alternatives and choosing of course of action.

The role of decision-making for managers and employees.

• effective managers, relies on planning and administration competencies. Managers are able to formulate management teams that are productive and achieve the company's vision.
• An effective manager has to demonstrate their strategic action competencies.
• As a functioning participant in decision-making process, employees understand their ideas are an important contribution to the company, and gives them the power to influence the outcome of their work, leading to increased job satisfaction and positive attitude, not only towards their position but also to the company.
• helps to stimulate good work relations amongst employees
• helps to improve teamwork.

2.Describe the conditions of certainty, risks, and uncertainty under which decisions are made.

• Certainty. conditions in which both the problems and alternative solutions are known and well defined.
• Risks.condition under which individuals can interpret the available problems, name alternative solutions, and state the probability of certain events.

* Probability

• Is the percentage of times that a specific outcome would occur if an individual were to make a particular decision a large number of times. An example of probability is that of tossing a coin. With enough tosses of a coin , heads will show up 50% of the time and the tails the other 50%.

* Objective probability

• Objective probability is the likelihood that a specific outcome will occur based on hard facts and numbers, e.g although Sanlam, Old mutual and other  life insurance companies cannot determine the year in which each policyholder will die, they can calculate objective probabilities that specifi numbers of policyholders , in various age categories will die a particular year.

* Subjective probability

• The likelihood that a specific outcome will occur , based on personal judgement and beliefs, is known as subjective probability.
• uncertainty.condition under which problems are not well defined,which leaves individuals unable to assign probabilities to outcomes of alternative solutions.

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

routine decisions.

• Standard choices made in response to well-defined problems with alternative solutions.
• decisions are made quickly.
• leads to increased efficiency and productivity, as individuals perform activities according to the established rules and policies.
• The established rules, procedures and policies helps to prevent errors or accidents.

Adaptive decisions

• Choices made in response to a combination of fairly unusual and uncommon problems.
• Unique solutions are implemented, which result in better quality and improved efficiency.
• Involves improving or modifying upon past routine decisions and policies.

Innovative decisions

• choices based on the discovery, identification and diagnosis of unusual  and ambiguous problem and the development of unique creative solutions.
•  Solutions involve a series of small, interrelated decisions made over a period of months or even years.
• The primary aim is to come up with a long lasting solution and this is normally done by the top management.

4.Explain how goals affect decision-making.

• Goals are crucial in giving employees, managers, and organizations  a sense of order.
• Setting goals is very important in adaptive and innovative decision-making. As we know , goals are results to be attained  therefore they indicate the direction in which decisions and actions should be aimed.
• Goals are defined as achievements so in order to achieve something , innovative decisions need to be made.
• Goals usually motivates people to make great decisions to reach success, and without goals it is hard to make decisions on what you want or what you have to to do. All the possible alternatives and consequences could be managed through decision making once we know our goals.

5.Differentiate between the rational, bounded rationality, and political models of decision-making.