4.

Managerial Decision
Making
Decision making process,
problem solving techniques, how
decisions are being supported,
Decision styles, Group decision
making, Features of various CBIS
 Decision Making Process
2.2

• The intelligence phase

– Finding / Identifying / Formulating
problems
• The design phase
– Develop alternative decisions
• The choice phase
– Chose the best decision from the pool
Multi-participant Decision Making
(MDM)
• MDM Structures
– GROUP
– TEAM
– COMMITTEE
• Communication Network Structures
– WHEEL
– CIRCLE
– CHAIN
– COMPLETELY CONNECTED
 Types of Decisions
• Based on convenience
– Structured
– Semi-Structured
– Unstructured
• Based on Criticality
– Strategic
– Tactical
– Operational
• Based on Availability
– Certainty / Uncertainty / Risk
• Based on Programmability
– Programmed
– Non Programmed
 Rational Decision Making
Model
• Consists of a structured four-step
sequence
– identifying the problem
– generating alternative solutions
– selecting a solution
– implementing and evaluating the
solution
 Political Decision Making
Model
• Assumes that people bring
preconceived notions and biases into
the decision-making situation
• Self-interest may block people from
making the most rational choice
• Sometimes it is difficult to determine
if a decision maker is operating
rationally or politically
 Normative Model of Decision
Making – Simon’s Model
• Based on premise that decision
making is not rational
• Decision making is characterized by
– limited information processing
– use of judgmental heuristics
– sacrificing
Problem Solving Techniques
• Problem solving has been defined as
higher order cognitive process that
requires the modulation and control of
more routine or fundamental skills. 
• Problem solving occurs when
an organism or an artificial
intelligence system needs to move from a
given state to a desired goal state.
 More Problem Solving
Techniques
• Abstraction
• Analogy
• Brainstorming
• Divide and conquer
• Hypothesis testing
• Lateral thinking
• Means-ends analysis
• Method of focal objects
• Morphological analysis
• Reduction
• Research
• Root cause analysis
• Trial-and-error
 How Decisions are being
supported
• Man-Machine System
• Closed-loop system
• DSS components
• Heuristics
– Availability Heuristic
– Representativeness Heuristic
 Decision Styles
High
Tolerance for Ambiguity

Analytical Conceptual

Directive Behavioral
Low
Tasks and Technical People and Social
Concerns Concerns

Value Orientation
 Tuckman’s Five-Stage
Theory of group
development
Performing Adjourning

Norming

Storming Return to
Independence
Forming
Dependence/
interdependence

Independence
 Tuckman’s Five-Stage
Theory of group
development
Forming Storming Norming Performing

“What do the “How can I best

Individual “How do I fit “What’s my
others expect perform my
Issues in?” role here?”
me to do?” role?”

“Why are we
“Can we agree
fighting over
Group “Why are we on roles and “Can we do the
who’s in
Issues here?” work as a job properly?”
charge and who
team?”
does what?”
 Group Decision Making
• Decision making in groups consisting
of multiple members/entities
– Anonymous
– Consensus
– Majority
– One Person / Dictatorship
 Group Decision Making
balance
Advantages Disadvantages
• Greater pool of • Social pressure
knowledge • Minority domination
• Different perspectives • Logrolling
• Greater • Goal displacement
comprehension • “Groupthink”
• Increased acceptance
• Training ground
 Group Decision Support
System 10.2

• Task Related Reasons

• Organizational Reasons
• Technical Reasons
GDSS Topologies
 Application of CBIS
• Retail
• Railway
• Aviation
• Education
• Hotel