Docstoc

18_HUL 204 - Decision making - Rational Stategies _1_

Document Sample
18_HUL 204 - Decision making - Rational Stategies _1_ Powered By Docstoc
					   DECISION MAKING
RATIONAL STRATEGIES (1)


                  Snehlata Jaswal


     HUL 204 Leadership, Decision making, and Communication in Organizations
          DECISION MAKING STRATEGIES

There are often many solutions to a given problem, and
the decision maker's task is to choose one of them.

The task of choosing can be as simple or as complex as the
importance of the decision warrants.

The number and quality of alternatives can also be
adjusted according to importance, time, and resources.

The ultimate choice of strategy often depends on the
personality of the decision maker
          TYPES OF DECISION MAKERS
• Traditional view: Economic man – search for
  alternatives and decision in favour of the best

• Atkinson (1957): Gamblers and conservatives –
  based on motivation to achieve success and
  motivation to avoid failure.

• Boulding (1958): Heroic man – ‘Damn the
  torpedoes, full speed ahead’

• Simon (1960): Satisficing man

Importance of social factors in all cases
            DECISION MAKING STRATEGIES
Optimizing
This is the strategy of choosing the best possible solution to the
problem; discovering as many alternatives as possible and choosing
the very best. How thoroughly optimizing can be done is dependent
on:
A. importance of the problem
B. time available for solving it
C. cost involved with alternative solutions
D. availability of resources, knowledge
E. personal values
Note that collection of complete information and the consideration
of all alternatives is seldom possible for most major decisions, so
limitations must be placed on alternatives.
             DECISION MAKING STRATEGIES
Satisficing
In this strategy, the first satisfactory alternative is chosen rather than
the best alternative. If you are very hungry as you are driving to
Delhi, you might choose to stop at the first decent looking restaurant
rather than attempting to choose the best restaurant from among all
(the optimizing strategy).
The word satisficing was coined by combining satisfactory and
sufficient. Simon (1960) contended that most bureaucratic
organizations used ‘satisficing’ solutions/ decisions.
For many small decisions, such as where to park, what to drink,
which pen to use, which tie to wear, and so on, the satisficing
strategy is perfect.
            DECISION MAKING STRATEGIES
Maximax
This stands for "maximize the maximums." This strategy focuses on
evaluating and then choosing the alternatives based on their
maximum possible payoff.
This is sometimes described as the strategy of the optimist, because
favorable outcomes and high potentials are the areas of concern. In
Atkinson’s terms it is used by the ‘gamblers’.
It is a good strategy for use when risk taking is most acceptable, and
when the go-for-broke philosophy is reigning freely.
            DECISION MAKING STRATEGIES
Maximin
This stands for "maximize the minimums." In this strategy, that of
the pessimist or the conservative the worst possible outcome of
each decision is considered and the decision with the highest
minimum is chosen. The Maximin orientation is good when the
consequences of a failed decision are particularly harmful or
undesirable. Maximin concentrates on the salvage value of a
decision, or of the guaranteed return of the decision. It's the
philosophy, "A bird in the hand is worth two in the bush."
Quiz masters on TV exploit the uncertainty many people feel when
they are not quite sure whether to go with a maximax strategy or a
maximin one: "Okay, you can now choose to take what you've
already won and go home, or risk losing it all and find out what's
behind door number three."
                     DECISION MAKING
I could put my $10,000 in a genetic engineering company, and if it
creates and patents a new bacteria that helps plants resist a
particular disease, I could make $50,000. But I could also lose the
whole $10,000.

But if I invest in a soap company, I might make only $20,000, but if
the company goes completely broke and gets liquidated, I'll still get
back $7,000 of my investment, based on its book value.

What should I do?
         Thank you




HUL 211 OBJECT PERCEPTION AND MEMORY

				
DOCUMENT INFO
Shared By:
Stats:
views:18
posted:6/12/2012
language:English
pages:9
Description: Leadership, communication and Decision is a must have course for every one. For a good Leadership you should have good communication skills and Decision making skills. These documents will teach you all that for free.