ADMS2400 JUNE.11 WEEK 6_Lecture 10 Decision Making 1
Topic: Decision Making
1. Decision Making Models
The Rational Model
The Bounded Rationality Model
2. Decision Making Problems
3. Individual Vs. Group Decision Making
► Decision making refers to the process of generating and choosing from a set of
alternatives to solve a problem.
The more knowledge and skills employees possess, the more likely they are to
make accurate and sound decisions.
Two Types of Knowledge
► Explicit knowledge is the kind of information you are likely to think about when you
picture someone sitting down at a desk to learn.
► Tacit knowledge is what employees can typically learn only through experience.
Up to 90% of the knowledge contained in organizations occurs in tacit form
Types of Decisions
► Programmed decisions are decisions that become somewhat automatic because a
person’s knowledge allows him or her to recognize and identify a situation and the
course of action that needs to be taken.
When a situation arises that is new, complex and not recognized, it calls for a
non-programmed decision on the part of the employee.
As employees move up the corporate ladder, a larger percentage of their decisions
become less and less programmed
Rational Decision Making Model
► Rational decision-making model offers a step-by-step approach to making decisions
that maximize outcomes by