Making Decision

By :

1.M. Dafirino Hardjono (1506105065)

2.I Putu Astawa (1506205043)
3.Rade Christiawati Sitorus (1506205058)
4.Ketut Adi Ananta S. (1506205088)
 Theory of
Making Decisions

Decision - a choice whereby a person

comes to a conclusion about given
circumstances / situation.
Decision making - making choices
among alternative courses of action which
may also include inaction .
 Understanding Making
Decisions
It is a solution selected after examining
several alternatives chosen because the
decider foresees that the course of action he
selects will do more than the others further
his goals and will be accompanied bye the
fewest possible objectionable
consequencesManely H. Jones
Decision-making is the selection based on some
criteria from two or more possible alternatives.
George R.Terry

A decision can be defined as a course of action

consciously chosen from available alternatives for
the purpose of desired result
J.L. Massie

A decision is an act of choice, wherein an

executive forms a conclusion about what must
be done in a given situation. A decision
represents a course of behaviour chosen from
a number of possible alternatives.
D.E. Mc. Farland
 Process of
Making Decisions
According to Dewey and Simon, problem-solving consists
of five following stages:
Identification of the problem

Obtaining necessary information

Production of possible solutions

Evaluation of such solutions

Make the decision

Example
Amy really wants a new
Cell phone. Unfortunately
,the one she wants costs
$1.500, and she has only
$1.000. She wonders
how she will get the rest
of money.
Step 1 : Identification the problem

Amy dont have

enough money to buy
Cell phone she wants
Step 2 : Obtaining necessary information

1. Looking for another

....Cell phone price
2. Looking for
....someone who will
....give him some loan
Step 3 : Production of possible solutions

1.Save her money until shes has got

enough money
2.Borrow money from her parents or friends
3.Buy a cheaper one.
Step 4 : Evaluation of such solutions
1.Save Her Money until shes got enough money.

She will feel proud about her decision, she

will get the Cell phone she really wants
She has to wait
Step 4 : Evaluation of such solutions
2. Borrow money from her parents or friends

Amy will get the cell phone right away.

She Wont fell independent, maybe friends

or parents will say NO
Step 4 : Evaluation of such solutions
3. Buy a cheaper one.

Amy will get the cell phone right away.

She Wont get the phone that she really

wants
Step 5 : Make The Decision

And Than,
Amy Decided to wait until
she has enough money to
buy cell phone that she really
want.
 Types of Decisions

Traditionally, organizations count on three

different types of decisions:
Strategic relating to the identification of long-term or
overall aims and interests and the means of achieving
them Organizational relating to the way different aspects
and parts of a group are arranged with the aim of being
more orderly and efficient
Operational relating to
Most groups seek a maximum of the way a group or
participation and agreement for strategic organization works on a
decisions, while letting operational daily basis
decisions be made in small groups or
work teams.
 the Manager
as Decision Maker

1. A decision maker who was perfectly

rational would be fully objective and
logical. He or she would define a
problem carefully and would have a
clear and specific goal.
2. Further, the decision maker is
aware of all the possible
consequences of each alternative.
such as :
- Clear preferences.
- Constant preferences.
- No time or cost constraints.
3. Those assumptions of rationality apply to any
decision. Because we're concerned with
managerial decision making in an
organization, however, we need to add one
further assumption. Rational managerial
decision making assumes that decisions are
made in the best economic interests of the
organization. That is, the decision maker is
assumed to be maximizing the organization's
interests, not Ms or her own interests.
-Known options. It is assumed that
the decision maker is creative, can
identify all the relevant criteria, and
can list all the viable alternatives.
Further, the decision maker is
aware of all the possible
consequences of each alternative.

- Clear preferences. Rationality

assumes that the criteria and
alternatives can be ranked
according to their importance.
 -Constant preferences. In addition
to a clear goal and preferences, it's
assumed that the specific decision
criteria are constant and that the
weights assigned to them are stable
over time.

- No time or cost constraints. The rational decision

maker can obtain full information about criteria and
alternatives because it's assumed that there are no
time or cost constraints. --Maximum payoff. The
rational decision maker always chooses the
alternative that will yield the maximum payoff.
 Conclusion

Decision making is an indispensable part of life.

There are five process in decision making that help you to
find the right solution. Also there are three type of decisions
as your additional knowledge that you must to know.
Manager as a decision maker who was perfectly rational
would be fully objective and logical in the decision making
process that would consistent lead forward selecting
alternative that maximizes the likelihood of achieving the
goal.