HSA 171 CAR
1436/6/9
Decision Making Conditions. Behavioral Influences individual Decision Making. 3
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Certainty: a situation in which a decision maker can make accurate decision because all outcomes are known. All decision variables and the results or solutions are known in advance. Decisions made under conditions of certainty are programmed decisions. This is possible only in the most simple situations E.g. reorder inventory automatically when stock falls below a determined level. 5
Risk: a situation in which the decision maker is able to estimate the likelihood of a certain outcome. The condition when there are PAST data/experiences about certain problem. E.g. crisis problem. 6
Uncertainty: a situation in which a decision maker has neither certainty nor reasonable probability estimates available. The condition in which the outcome of any decision can’t be predicted Or if the outcome can be predicted but the probability of that outcome actually happening cannot be predicted. E.g. promotion of a NEW product/service. 7
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9 CertaintyRiskUncertainty manager has perfect knowledge of all the information needed to make a decision. the manager lacks complete information. information is so poor. The challenge is simply to study the alternatives and choose the best solution. manager may understand the problem and the alternatives, but has no guarantee how each solution will work managers can't even assign probabilities to the likely outcomes of alternatives SimpleDifficultMost Difficult Programmed DecisionsNon Programmed Decisions Individuals involved in DM Individual and Groups involved, Require high conceptual skills. Group DM, need Creativity in solving Problems.
Several behavioral factors influence the decision-making process. They may have an impact and therefore should be understood. 1. Ethics Anything related to the common ethics as: Laying to supervisors, individual conflicts, ………….. etc. 10
2. Values Basic guidelines and beliefs that a decision maker uses when confronted with a situation requiring choice. Anything related to beliefs, religions, community rules, …. etc. 11
3. Personality Any psychological forces either conscious or subconscious Three types of variables under personality factor can affect the decision making: ◦ Personality variables: attitude, needs, behavior, ….. etc ◦ Situational variables: external situations (observable) in which the individual find himself. ◦ Interactional variables: the individual reaction from a specific situation. 12