Organizational System
Decision Making
• Decision making is the cognitive process of selecting a course of action from
among multiple alternatives. Every decision-making process produces a final
choice. It can be an action or an opinion. It begins when we need to do something
but we do not know what. Therefore decision-making is a reasoning process
which can be rational or irrational, and can be based on explicit assumptions or
tacit assumptions.
General Decision-Making Operations:
• Intelligence: Gather data, Identify objectives, Diagnose Problems, Validate data,
Structure problem.
• Design: Gather data, Manipulate data, Quantify objectives, Generate reports,
Generate alternatives, Assign risks or values to alternatives.
• Choice: Generate statistics or alternatives, Simulate results of alternatives,
Explain alternatives, Choose among alternatives, Explain choice.
STAGES OF THE DECISION PROCESSES
• Diagnosis: Defining the nature of the problem and its implications for the goals
of the decision makers.
• Search: Identifying options that are relevant and feasible potential solutions to
the problem; assigning each option all possible outcomes.
• Revision: Assigning each outcome a probability estimate; revising probability
estimates in light of new information.
• Evaluation: Identifying relevant value dimension (criteria) for evaluation of
outcomes; ordering (ranking or rating) outcomes on each value dimension;
integrating outcome ranking (ratings) across value dimensions.
• Choice: Establishing overall preferences for options on the basis of some rule by
which options are evaluated and compared.
• Implementation: Carrying out the decision.
Types or DECISION LEVELS
• 1. Strategic. Strategic decisions are the highest level. Here a decision concerns
general direction, long term goals, philosophies and values. These decisions are
the least structured and most imaginative; they are the most risky and of the
most uncertain outcome, partly because they reach so far into the future and
partly because they are of such importance.
• 2. Tactical. Tactical decisions support strategic decisions. They tend to be
medium range, medium significance, with moderate consequences.
• 3. Operational: These are every day decisions, used to support tactical
Decision Making
• Decision making is the cognitive process of selecting a course of action from
among multiple alternatives. Every decision-making process produces a final
choice. It can be an action or an opinion. It begins when we need to do something
but we do not know what. Therefore decision-making is a reasoning process
which can be rational or irrational, and can be based on explicit assumptions or
tacit assumptions.
General Decision-Making Operations:
• Intelligence: Gather data, Identify objectives, Diagnose Problems, Validate data,
Structure problem.
• Design: Gather data, Manipulate data, Quantify objectives, Generate reports,
Generate alternatives, Assign risks or values to alternatives.
• Choice: Generate statistics or alternatives, Simulate results of alternatives,
Explain alternatives, Choose among alternatives, Explain choice.
STAGES OF THE DECISION PROCESSES
• Diagnosis: Defining the nature of the problem and its implications for the goals
of the decision makers.
• Search: Identifying options that are relevant and feasible potential solutions to
the problem; assigning each option all possible outcomes.
• Revision: Assigning each outcome a probability estimate; revising probability
estimates in light of new information.
• Evaluation: Identifying relevant value dimension (criteria) for evaluation of
outcomes; ordering (ranking or rating) outcomes on each value dimension;
integrating outcome ranking (ratings) across value dimensions.
• Choice: Establishing overall preferences for options on the basis of some rule by
which options are evaluated and compared.
• Implementation: Carrying out the decision.
Types or DECISION LEVELS
• 1. Strategic. Strategic decisions are the highest level. Here a decision concerns
general direction, long term goals, philosophies and values. These decisions are
the least structured and most imaginative; they are the most risky and of the
most uncertain outcome, partly because they reach so far into the future and
partly because they are of such importance.
• 2. Tactical. Tactical decisions support strategic decisions. They tend to be
medium range, medium significance, with moderate consequences.
• 3. Operational: These are every day decisions, used to support tactical
