Evaluating Decision Making Processes Essay.
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Details: Many processes exist to use to make decisions. Some people use formal processes that are documented somehow, while others simply go through a process in their mind to arrive at a decision. Of course, the complexity of the decision may play a role in what process is used as well. Many processes exist for decision making, including cost/benefit analysis, matrices, decision trees, and many more. It is important to understand how each of these processes works so that you know which would be most appropriate to use when trying to arrive at a decision.
in a paper, evaluate a minimum of five different decision making processes. How does each of the processes work? Would you consider them informal or formal processes?
Provide a situation in which each of these processes would be most appropriate. Discuss whether there are similarities between any of the processes.
( 1.0 Analyze a business problem to determine the appropriate decision-making strategy.
5.0 Develop strategies that move a decision from determining a solution through the evaluation stage of its effectiveness after implementation.)
Here’s a snippet of the essay.
Decision-making is the process of identifying and selecting alternatives or courses of action based on the preferences and values of the decision maker (Nutt & Wilson, 2010). Coming up with a decision means that there exist alternatives that have to be considered, in such an instance, a decision maker must not only identify as many alternatives as possible but also select the best alternative that best fits with his objectives, goals, values, desires among others. Further, when attempting to make a good decision, an individual must weigh the negatives and the positive of each alternative and also take into consideration all the other alternatives (Maroun, 1991). For decision-making that is effective, an individual must have the ability to forecast the result of each alternative as well as determine which alternative is best suited for that particular situation. While the basic steps in the decision-making process might be the same, there are many different tools and techniques that can be utilized when attempting to make a decision. Just like many other areas, effective decision-making can benefit from the addition of structure and focus. Although these tools are not completely perfect; they support the decision making process through assisting in surveying the available alternatives as well as collecting and evaluating the data or information that is needed in selecting the most appropriate course of action (Maroun, 1991). The discussion below is a description of how these decision-making processes work and where each one of them is best-suited when trying to arrive at a decision.
Cost Benefits Analysis
In some cases, a firm may decide to undertake a new project; when such a project is highly involving and complex in nature, employees or workers may be unable to keep up with the increased workload. Consequently, the organization manager must consider whether to employ a new team member or worker. When such a decision has to be made, the benefits of employing a new worker must significantly outweigh the associated costs. It is in this kind of a situation where the cost-benefit analysis is most appropriate. The concept of cost-benefit analysis was first introduced in the 1930s by a French engineer called Jules Dupuit. In the 1950s, the concept gained popularity as a simple way of evaluating a project costs and benefits in order to determine whether to venture into a project (Nutt & Wilson, 2010). As the name suggests, the cost-benefit analysis involves summing up the benefits of a particular alternative or course of action and then comparing these benefits with the costs associated with the course of action (Basili & Zappia, 2008). The outcome of the cost benefit analysis is mainly expressed as a payback period. A payback period refers to the time taken for a project’s benefits to repay its costs (Nutt & Wilson, 2010). When choosing between different alternatives, decision makers utilizing this process select a project that can pay back in a specific period. There are many other situations where the cost-benefit analysis can be used, for instance, when evaluating a new project, deciding whether to employ new workers or when determining a capital project feasibility. It is good to note that the cost-benefit analysis is best suited for making simple and quick financial decisions.
Decision matrix analysis is an important technique in decision-making. Particularly, this tool is most appropriate in situations where a number of good courses of action to choose from exist, and when many different factors have to be taken into consideration (Nutt & Wilson, 2010). This makes the decision matrix analysis a great technique to utilize in almost any critical decision where obvious and clear options do not exist. For instance, an organization may need to get new outsourced IT supplier, having identified a number of different suppliers; the firm has to select one of them. The organization may decide to select a low-cost alternative; however, it may not want to consider the cost alone-factors like underlying technology, service level and contract length need to be taken into consideration. This is the kind of scenario where decision matrix analysis is most appropriate; it helps the decision maker to take decisions rationally and confidently. The technique works by getting the decision maker to list his options or alternatives as rows on a table and the factors that need consideration as columns (Maroun, 1991). The decision maker then proceeds to score each alternative/factor combination, weigh this score in terms of the factor relative importance, and finally sum up these scores in order to get an overall score for each alternative.