decision making project report

Decision

Making

Group Members:

Syeda Tazeen Fatima

Sajida Bashir

Riasat Ali

Farhan Kausar

Presented To:

Miss Leeza Riaz Ahmad

DECISION MAKING: INNER CIVIL WAR

National college of Business Administration & Economics -LHR

EXECUTIVE SUMMARY

This study consists of gathering information about the Importance

of decision making in a person’s life. After the importance there is a

chapter stating some major Types of decision making e.g. impulsive

decision making, Rational decision making, Emotional decision

making etc.

Third chapter consist of situations where one needs to decide

something but it vary in many ways. Like how men v/s women

differ in decision making, personal v/s professional life decisions

and the difference between effective v/s ineffective decision

making.

Later on the 4th chapter consists of decision making process and 6

C’s of decision making. Chapter 5th is about some tools one can use

for decision making. Last chapter discuss the Impact of decision

making in both good and bad decisions.



ACKNOWLEDGEMENT

Group Members

Thanks to almighty Allah for enabling us to fulfill all the requirements for the

completion of this report.

It would not be a justice in presenting this report without mentioning the people

around us who have been inextricably related with the completion of this report.

For assisting us in all respect and regards to complete this report our heart felt

thanks to my supervisor Mam Leeza Riaz Ahmad, who enriched my knowledge

with wealth led ideas to pursue and power of writing this report. It could not have

been possible to accomplish this report without her thoughtful guidance and

expertise. It is also a great pleasure to record honorable regards to all those who

helped us lot in learning and enhancing my knowledge and ability during the this

especially to Miss Maryum Afzal.

Finally for all possible errors, omissions and shortcomings in writing of this report

only we are responsible for which we hope that all concerning regards of this

report will forgive us.



TRAINNER’S PROFILE

SAJIDA BASHIR

TEACHER

AMERICAN LYCETUFF LAHORE

TAZEEN FATIMA

ASSET CONTROLLER

ALLIED BANK LIMITED

RIASAT ALI

CORRESPODANCE OFFICER

RESCUE 1122

FARHAN KAUSAR

SOCIAL WORKER

YRC , LAHORE

http://www.americanlycetuff.edu.pk/



TABLE OF CONTENTS

CHAPTER 1: INTRODUCTION ................................................................................................................. 6

CHAPTER 2: TYPES OF DECISION MAKING .................................................................................... 7

RATIONAL .............................................................................................................................................. 7

INTUITIVE............................................................................................................................................... 8

COMBINATIONS .................................................................................................................................... 8

SATISFYING ........................................................................................................................................... 9

FURTHER TYPES OF DECISION MAKING ............................................................................................ 9

REVERSIBLE DECISION MAKING: .................................................................................................... 9

IRREVERSIBLE DECISION MAKING: ................................................................................................ 9

DELAYED DECISION MAKING:........................................................................................................ 10

QUICK DECISION MAKING: .............................................................................................................. 10

EXPERIMENTAL: ................................................................................................................................. 10

TRIAL & ERROR: ................................................................................................................................. 10

CHAPTER 3: DECISION MAKING SITUATIONS ................................................................................. 11

Decisions under Certainty, Risk and Uncertainty ........................................................................ 11

Men Women decision making ................................................................................................................... 12

CHAPTER 4: DECISION MAKING PROCESS ...................................................................................... 14

Step 1: Create a Constructive Environment ................................................................................................ 15

Step 2: Investigate the Situation in Detail ............................................................................................... 15

Step 3: Generate Good Alternatives ........................................................................................................ 15

Step 4: Explore Your Options ................................................................................................................. 16

Step 5: Select the Best Solution .............................................................................................................. 16

CHAPTER 5: TOOLS OF DECISION MAKING ..................................................................................... 17

CHAPTER 6: IMPACT OF DECISION MAKING ................................................................................... 19

Pros of Individual Decision Making ....................................................................................................... 19

Cons of Individual Decision Making ...................................................................................................... 19

Advantages and Disadvatages of Group Decision-making ......................................................................... 20



CHAPTER 1: INTRODUCTION

We make decisions every single day. Some are simple, others are more complex. Some of your

daily routine decisions are so easy that you make them without giving them much thought. Like,

what you are going to have for your breakfast? What you are wearing? But difficult or

challenging decisions demand more consideration. For example deciding your major subject,

changing your job, who you want to marry? These are the sort of decisions that involve:

Uncertainty – Many of the facts may be unknown.

Complexity – There can be many, interrelated factors to consider.

High-risk consequences – The impact of the decision may be significant.

Alternatives – There may be various alternatives, each with its own set of uncertainties

and consequences.

Interpersonal issues – You need to predict how different people will react.

When you’re making a decision that involves complex issues like these, you also need to engage

your problem-solving, as well as decision-making skills. It pays to use an effective process in

these circumstances, to improve the quality of your decisions and to achieve consistently good

results.

Decisions can often fail because

the best alternatives are not clear

at the outset, or key factors are

not considered as part of the

process. A logical and ordered

process can help you to do this by

making sure that you address all

of the critical elements needed for

a successful outcome.



CHAPTER 2: TYPES OF DECISION MAKING

There are many types of decision making and these can be easily categorized into the following 4

groups:

Rational

Intuitive

Combinations

Satisfying

RATIONAL

Rational decision making is the commonest of the types of decision making that is taught and

learned when people decide that they want to improve their decision making. These are logical,

sequential models where the emphasis is on listing many potential options and then working out

which is the best. Often the pros and cons of each option are also listed and scored in order of

importance.

The rational aspect indicates that there is considerable reasoning and thinking done in order to

select the optimum choice. Because we put such a heavy emphasis on thinking and getting it

right in our society.

For Example:

when Xerox invented photocopy machine they went in the market asking people if they

need photocopy machine and it turned out that no one wanting a photocopy machine

since everyone was using carbon papers and type writers even the companies like IBM

and General Electric rejected the idea of photocopy machine but this did not stop Xerox

to market their machine, they marketed it and it was so successful in north America that

photocopying came to be properly known as Xeroxing.



INTUITIVE

The second of the types of decision making are the intuitive models. The idea here is that there

may be absolutely no reason or logic to the decision making process. Instead, there is an inner

knowing, or intuition, or some kind of sense of what the right thing to do is.

And there are probably as many intuitive types of decision making as there are people. People

can feel it in their heart, or in their bones, or in their gut and so on. There are also a variety of

ways for people to receive information, either in pictures or words or voices.

People talk about extra sensory perception as well. However, they are still actually picking up

the information through their five senses. Other types of decision making in the intuitive

category might include tossing a coin, throwing dice, tarot cards, astrology, and so on.

For Example:

Violet Jones is a manager at the Intestinal Distress Tacos fast food restaurant. She has noticed

that the taco shells are disappearing at a faster rate than the sales. There are some ways that

Violet can investigate the missing taco shells.

Violet does not have the time in her business managerial schedule to spend a long time

investigating the taco shell mystery. She is losing money daily and must fire the individual

responsible. She has relied on her intuition in the past, and it has successfully rewarded her into

management positions. She uses patterns of behavior, cues and body language.

For example, Violet has noticed that her newest employee, Ernie, has been avoiding her and not

making eye contact. She has a gut feeling that he may be her taco shell thief.

COMBINATIONS

Many decisions are actually a result of combinations of rational and intuitive processes. This can

be deliberate where a person combines aspects of both, or it can occur unwittingly. A person has

listed the pros and cons of the options, assigned numerical values and added them all up (The

rational part). But the end result is not really satisfactory, they are uneasy somehow (the intuitive

part), so they change the parameters, and the numbers add up differently. This new result is more

'satisfactory', so they go with that one.



SATISFYING

Instead of evaluating all the possible options and choosing the best, satisfying is where we pick

the first one that will give us the result. We choose an option that is good enough, one that

satisfies our needs and sacrifices other potentially better options

FURTHER TYPES OF DECISION MAKING

REVERSIBLE DECISION MAKING:

Reversible decisions are not final and binding. In fact, they can be changed entirely at any point

of time. It allows one to acknowledge mistakes and fresh decisions can be taken depending upon

the new circumstances.

For Example:

The simplest response to the energy crisis of the early 1970s, for example, was to turn down the

thermostat during the winter and raise it during the summer. It had the additional virtue of being

fully reversible in seconds. Conservation measures were more difficult to take back, but were

often only moderately expensive, and a subsequent lowering of energy prices did not render

them counterproductive, even if it did reduce the return on invested capital. Changing an energy

source, on the other hand, was often a complex and expensive reaction to the crisis and costly to

reverse. Yet a number of companies did convert from oil to coal in the 1970s and now wish they

could recall a decision made on the basis of inadequate information and executive

overconfidence.

IRREVERSIBLE DECISION MAKING:

These decisions are permanent. Once taken, they can't be undone. The effects of these decisions

can be felt for a long time to come. Such decisions are taken when there is no other option.

For Example:

Processor. It’s not always (or often) the choice developers make first. But it is irreversible

because it's almost impossible to change processors partway through development without

throwing out most of the work you've done and starting over. All the hardware that touches the

chip will change and most of the software will, too. Changing processors midstream is



disastrous, so choosing the right chip (or chips) is key. This decision lives on long past the

current product's life cycle.

DELAYED DECISION MAKING:

Such decisions are put on hold until the decision maker thinks that the right time has come. The

wait might make one miss the right opportunity that can cause some loss, especially in the case

of businesses

QUICK DECISION MAKING:

These decisions enable one to make maximum of the opportunity available at hand. In order to

be able to take the right decision within a short span of time, one should also take the long-term

results into consideration.

For Example:

Examples of when extremely fast decision making is needed include: combat, avoiding a car

accident, or anything requiring an immediate decision. Another common name for split second

decision making is “thinking on your feet.”

EXPERIMENTAL:

One of the different types of decision making is the experimental type in which the final decision

cannot be taken until the preliminary results appear and are positive.

For Example:

For example, before deciding whether to acquire a new CRM software application, a company

may have a small group of customer service agents try it out first. Or a company may decide to

send a small group of agents to a new training course to test whether the training makes any

difference in the quality of service they provide.

TRIAL & ERROR:

This approach involves trying out a certain course of action. If the result is positive it is followed

further, if not, then a fresh course is adopted. Such a trial and error method is continued until the

decision maker finally arrives at a course of action that convinces him of success.

For Example:



Trial and error has traditionally been the main method of finding new drugs, such as antibiotics

what chemical will work well as an antibiotic?"

CHAPTER 3: DECISION MAKING SITUATIONS

Decisions under Certainty, Risk and Uncertainty

Knowledge of Outcomes

An outcome defines what will happen if a particular alternative or course of action is chosen. Knowledge

of outcomes is important when there are multiple alternatives. In the analysis of decision making, three

types of knowledge with respect to outcomes are usually distinguished:

1. Certainty: Complete and accurate knowledge of outcome of each alternative. There is

only one outcome for each alternative.

2. Risk: Multiple possible outcomes of each alternative can be identified and a probability of

occurrence can be attached to each.

3. Uncertainty: Multiple outcomes for each alternative can be identified but there is no

knowledge of the probability to be attached to each.

Taking Decisions Under Certainty

If the outcomes are known and the values of the outcomes are certain, the task of the decision

maker is to compute the optimal alternative or outcome with some optimization criterion in mind.

As an example: if the optimization criterion is least cost and you are considering two different

brands of a product, which appear to be equal in value to you, one costing 20% less than the

other, then, all other things being equal, you will choose the less expensive brand.

However, decision making under certainty is rare because all other things are rarely equal.

Linear programming is one of the techniques for finding an optimal solution under certainty.

Linear programming problems normally need computations with the help of a computer.

Taking Decisions Under Risk

The making of decisions under risk, when only the probabilities of various outcomes are known, is

similar to certainty.

https://en.wikipedia.org/wiki/Antibiotics

http://decision-making-role.blogspot.com/2010/08/decisions-under-certainty-risk-and.html



Instead of optimizing the outcomes, the general rule is to optimize the expected outcome.

As an example: if you are faced with a choice between two actions one offering a 1% probability

of a gain of $10000 and the other a 50% probability of a gain of $400, you as a rational decision

maker will choose the second alternative because it has the higher expected value of $200 as

against $100 from the first alternative.

Taking Decisions Under Uncertainty

Decisions under uncertainty (outcomes known but not the probabilities) must be handled

differently because, without probabilities, the optimization criteria cannot be applied.

Some estimated probabilities are assigned to the outcomes and the decision making is done as if

it is decision making under risk.

In Daily Routine Gender Base Situation

Men Women decision making

This collection of gender differences in decision making come from many sources. It's important

to remember that we're talking here about humans.

This means that the gender differences in decision making are true in general, and may not be

true in specific cases.

It is well known that men and women have different shopping strategies, different ways of

communicating and place emphasis on different things in relationships. Let's have a closer look

at some of these.

Shopping!!

The 'shopping gender gap' has been well documented in retail anthropology. One specific aspect

of this is the factor of time. Men tend to make their purchasing decisions based on immediate

needs and how well the product or service will satisfy needs now and into the immediate future.

Long-term considerations seem to play little part for men.



For women, however, this trend is almost reversed. Frequently the long-term considerations, and

whether the purchase can be used again and again over time, may even be a stronger factor in the

woman's purchasing decision than instant satisfaction.

Obviously if you're selling to men, emphasise the immediate gratification. For women it's more

useful to ensure that they understand the benefits over the long-term. Or even to make sure that

they buy sufficient quantity to last them a long time.

It's also useful to keep in mind how this affects brand loyalty for both genders.

Emotion vs facts

When it comes to actually making the decision, women generally make purchase decisions on a

more emotive level, whereas men go more with the facts and data. Women prefer a narrative, a

story with the faces and the interaction and the relationships that are occurring. The female brain

seems to be more multitracked and networked compared to the male brain which is a lot more

compartmentalized.



CHAPTER 4: DECISION MAKING PROCESS

Working through this process systematically will reduce the likelihood of overlooking important

factors. Our seven-step approach takes this into account:

1:Create a constructive environment.

2:Investigate the situation

in detail.

3:Generate good

alternatives

4:Explore your options.

5:Select the best solution.

6:Evaluate your plan.

7: Communicate your decision,

and take action.



Step 1: Create a Constructive Environment

Decisions can become complex when they involve or affect other people, so it helps to create a

constructive environment in which to explore the situation and weigh up your options.

Often, when you are responsible for making a decision, you have to rely on others to implement

it, so it pays to gain their support. If it’s most appropriate to make the decision within a group,

To identify who to include in the process. To build commitment from others, make sure

that these stakeholders are well represented within your decision-making group (which

will ideally comprise five to seven people).

To decide whether to consult them or to give them a vote.

Encourage people to contribute to the discussions, debates and analysis without any fear

of the other participants rejecting their ideas.

Make sure everyone recognizes that the objective is to make the best decision possible in

the circumstances – this is not the time for people to promote their own preferred

alternative.

Step 2: Investigate the Situation in Detail

Before you can begin to make a decision, you need to make sure that you fully understand your

situation. It may be that your objective can be approached in isolation, but it’s more likely that

there are a number of interrelated factors to consider.

It is important to explore the problem from multiple perspectives, and to make sure you’re not

missing any important information is also an important step.

Step 3: Generate Good Alternatives

The wider the options you explore, the better your final decision is likely to be. Generating a

number of different options may seem to make your decision more complicated at first but the

act of coming up with alternatives forces you to dig deeper and look at the problem from

different angles.



Brainstorming is probably the most popular method of generating ideas. When ideas start to

emerge, try to organize them into common themes and groups.

Step 4: Explore Your Options

When you're satisfied that you have a good selection of realistic alternatives, it’s time to evaluate

the feasibility, risks and implications of each one.

Almost every decision involves some degree of risk. Use Risk Analysis to consider this

objectively by adopting a structured approach to assessing threats, and evaluating the probability

of adverse events occurring. Then, prioritize the risks so you can focus on the ones that are most

likely to occur.

Step 5: Select the Best Solution

Once you’ve evaluated the alternatives, the next step is to make your decision. If one particular

alternative is clearly better than the rest, your choice will be obvious. However, if you still have

several competing options, there are plenty of tools that will help you decide between them.

https://www.mindtools.com/brainstm.html

https://www.mindtools.com/pages/article/newTMC_07.htm



CHAPTER 5: TOOLS OF DECISION MAKING

1. Cost benefit analysis

2. Pareto analysis

3. SWOT ANALYSIS

Cost–benefit analysis (CBA), sometimes called benefit–cost analysis (BCA), is a systematic

approach to estimating the strengths and weaknesses of alternatives that satisfy transactions,

activities or functional requirements for a business.

Pareto Analysis is a statistical technique in decision-making used for the selection of a limited

number of tasks that produce significant overall effect. It uses the ParetoPrinciple (also known



as the 80/20 rule) the idea that by doing 20% of the work you can generate 80% of the benefit of

doing the entire job.

SWOT analysis (alternatively SWOT matrix) is an acronym for strengths, weaknesses,

opportunities, and threats—and is a structured planning method that evaluates those four

elements of a project or business venture. A SWOT analysis can be carried out for a company,

product, place, industry, or person.



CHAPTER 6: IMPACT OF DECISION MAKING

There are so many choices these days. How is one to know what to choose? There have always

been choices, no getting around it. The problem comes when there are too many choices. Some

people have trouble with making choices because they hate to make a decision. They are afraid

of the consequences of making the wrong decision.

We have two situations to compare. One is individual thinking and other is group thinking.

Advantages and disadvantages of both areas under,

Pros of Individual Decision Making

An individual generally makes prompt decisions. While a group is dominated by various

people, making decision-making very time consuming. Moreover assembling group

members consumes lot of time.

Individuals do not escape responsibilities. They are accountable for their acts and

performance. While in a group it is not easy to hold any one person accountable for a

wrong decision.

Individual decision making saves time, money and energy as individuals make prompt

and logical decisions generally. While group decision making involves lot of time, money

and energy.

Individual decisions are more focused and rational as compared to group.

Cons of Individual Decision Making

A group has potential of collecting more and full information compared to an individual

while making decisions.



An individual while making any decision uses his own intuition and views. While a

group has many members, so many views and many approaches and hence better

decision making.

A group discovers hidden talent and core competency of employees of an organization.

An individual will not take into consideration every members interest. While a group will

take into account interest of all members of an organization.

Advantages of Group Decision-making

Since the group members have different specialties, they tend to provide more

information and knowledge. Also, the information tends to be more comprehensive in

nature and the group can generate a greater number of alternatives.

Implementation of the decision is more effective, since the people who are going to

implement the decision also participate in the decision making process. This also

increases the commitment of the people to see the implementation to success.

The participative decision making process builds up ground work as a training group for

subordinates, who develop the skills of objective analysis and deriving conclusions.

The group decision making is more democratic in nature while the individual decision

making is more autocratic in nature. The democratic processes are more easily acceptable

and are consistent with the democratic ideals of our society.

Permits participants to choose from a variety of structured and unstructured techniques

and methods to perform the task

Disadvantages of Group Decision Making

One possible disadvantage of group decision making is that it can create a diffusion of

responsibility that results in a lack of accountability for outcomes. In a sense, if everyone

is responsible for a decision, then no one is.

https://www.boundless.com/management/definition/accountability



Group decisions can make it easier for members to deny personal responsibility and

blame others for bad decisions.

Group decisions can also be less efficient than those made by an individual. Group

decisions can take additional time because there is the requirement of participation,

discussion, and coordination among group members

One of the greatest inhibitors of effective group decision making is groupthink.

Groupthink is a psychological phenomenon that occurs within a group of people in which

the desire for harmony or conformity results in an irrational or dysfunctional decision.

https://www.boundless.com/management/definition/efficient

https://www.boundless.com/management/definition/effective

https://www.boundless.com/management/definition/dysfunctional

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