The document discusses various models and techniques for decision making. It describes the classical and administrative models of decision making. The classical model assumes all information is available, while the administrative model recognizes limitations in information and manager's cognitive abilities. Several group decision making techniques are also outlined: nominal group technique, Delphi technique, and stepladder technique. The nominal group technique structures participation to ensure all members contribute ideas. The Delphi technique avoids meeting the decision makers directly and relies on anonymous questionnaires. The stepladder technique structures the entry of group members to improve participation.

1. Submitted By: Nitish
Sadotra

2.  Decision making: the process by which
managers respond to opportunities and threats
by analyzing options, and making decisions
about goals and courses of action.
 Decisions in response to opportunities:
managers respond to ways to improve
organizational performance.
 Decisions in response to threats: occurs when
managers are impacted by adverse events to
the organization.

3.  Programmed Decisions: in routine, almost
automatic process.
 Managers have made decision many times before.
 There are rules or guidelines to follow.
 Example: Deciding to reorder office supplies.
 Non-programmed Decisions: unusual situations
that have not been often addressed.
 No rules to follow since the decision is new.
 These decisions are made based on information, and a
manger’s intuition, and judgment.
 Example: Should the firm invest in a new technology?

4.  Classical model of decision making: a
prescriptive model that tells how the decision
should be made.
 Assumes managers have access to all the
information needed to reach a decision.
 Managers can then make the optimum decision by
easily ranking their own preferences among
alternatives.
 Unfortunately, mangers often do not have all
(or even most) required information.

5. Rank each alternative
from low to high
Select best
alternative
List alternatives
& consequences
Assumes all information
is available to manager
Assumes manager can
process information
Assumes manager knows
the best future course of
the organization

6.  Administrative Model of decision making:
Challenges the classical assumptions that managers have and
process all the information.
 As a result, decision making is risky.
 Bounded rationality: There is a large number of alternatives
and information is vast so that managers cannot consider it
all.
 Decisions are limited by people’s cognitive abilities.
 Incomplete information: most managers do not see all
alternatives and decide based on incomplete information.

7. Recognize need for
a decision
Frame the problem
Generate & assess alternatives
Choose among alternatives
Implement chosen
alternative
Learn from feedback

8. 1. Recognize need for a decision: Managers
must first realize the need for which a
decision must be made.
2. Frame the problem: managers must frame
problem for which decision is to be made.
3. Generate alternatives: managers must
develop feasible alternative courses of
action.

9. ▪ If good alternatives are missed, the resulting
decision is poor.
▪ It is hard to develop creative alternatives, so
managers need to look for new ideas.
▪ Evaluate alternatives: what are the advantages and
disadvantages of each alternative?
▪ Managers should specify criteria, then evaluate.
. 4. Choose among alternatives: managers
rank alternatives and decide.

10. 5. Implement choose alternative: managers
must now carry out the alternative.
 Often a decision is made and not implemented.
6. Learn from feedback: managers should
consider what went right and wrong with
the decision and learn for the future.
 Without feedback, managers never learn from
experience and might repeat the same mistake.

11. • NOMINAL GROUP THINK
The nominal group technique is a structured decision making process
in which group members are required to compose a comprehensive
list of their ideas or proposed alternatives in writing. NGT is designed
to help with group decision making by ensuring that all members
participate fully.
 7-10 individuals are brought together to participate in a structured
exercise.
 Team members are presented with a problem, challenge or issue.
 Individual team members silently and independently write down
their ideas about how to tackle the problem.
 Each team member (one at a time, in round-robin fashion) presents
an idea to the group.
 Individuals silently and independently vote on each idea.

12. • DELPHI TECHNIQUE
Another technique which capitalizes group's resources, while
avoiding several possible disadvantages of relying on group decision-
making processes. This approach, called the Delphi Technique, is
similar to NGT in several respects, but also differs significantly in
that the decision-makers never actually meet.
 Select a group of individuals who possess expertise in a given
problem area.
 Survey the experts for their opinions via a mailed questionnaire.
Analyze and distil the experts' responses.
 Mail the summarized results of the survey to the experts and
request that they respond once again to a questionnaire.
 If one expert's opinion sharply differs from the rest, he or she may
be asked to provide a rationale. the experts usually achieve a
consensus.

13. • STEPLADDER TECHNIQUE
A problem-solving structure recently proposed as a solution
to the problem of unequal participation in groups. The
technique is intended to improve group decision-making by
structuring the entry of group members into a core group.
Encourages all members to contribute on an individual level
before being influenced by anyone else. This results in a
wider variety of ideas, it prevents people from "hiding"
within the group, and it helps people avoid being "stepped
on" or overpowered by stronger, louder group members.

14.  Before getting together as a group, present the task or
problem to all members. Give everyone sufficient time to
think about what needs to be done.
 Form a core group of two members. Have them discuss
the problem.
 Add a third group member to the core group. The third
member presents ideas to the first two members BEFORE
hearing the ideas that have already been discussed.
 Repeat the same process by adding a fourth member, and
so on, to the group. Allow time for discussion after each
additional member has presented his or her ideas.
 Reach a final decision only after all members have been
brought in and presented their ideas.