Decision Making: The Psychology Of Choice

Decision Making The psychology of choice

Presented By 1.Rahul Gupta 2.Sohail Shaikh 3.Satyam Tiwari

Introduction Decision Making  The action or process of making important decisions. The thought process of selecting a logical choice from the available options.  In psychology, decision-making is regarded as the cognitive process resulting in the selection of a belief or a course of action among several alternative possibilities. Every decisionmaking process produces a final choice, which may or may not prompt action.

DEFINITION Decision & Decision Making  A decision is a choice made between two or more available alternatives. Decision making is the process of choosing the best alternative for reaching objectives. (Samuel C. Certo, 2003)  Decision making can be defined as a process of choosing between alternatives to achieve a goal. It is the process by which an individual chooses one alternative from several to achieve a desired objective. (Manmohan Prasad, 2003)

Making Effective Decisions Factors: Perception.

Goals.

Priority.

Values.

Acceptability.

Demands.

Risk.

Style.

Resources.

Judgement.

Six C's of Decision Making 1. Construct. 2. Compile. 3. Collect. 4. Compare. 5. Consider. 6. Commit.

Six C's of Decision Making Construct a clear picture of precisely what must be decided.

Compile a list of requirements that must be met.

Collect information on alternatives that meet the requirements.

Six C's of Decision Making Compare alternatives that meet the requirements.

Consider the "what might go wrong" factor with each alternative.

Commit to a decision and follow through with it.

Types of Decision 1. Basic Decision or Strategic Decisions Types of Decisions 2. Administrative Decisions

3. Organisational or Personal Decisions Types of Decisions 4. Policy of Decisions

Types of Decision 5.Individual & Group Decisions Types of Decisions 6. Routine Decisions 7. Adaptive Decisions

TECHNIQUES OR BASIS OF DECISION MAKING 1.INTUTION:Decision making by intuition is characterized by inner feeling of the person. He takes a decision as per the dictates of his conscious 2.FACTS :It is considered to be the best basis of decisions making. Such decisions will be sound and proper 3.Experience : Past experience of a person becomes a good basis for taking decisions. When a similar situation arises the manager can rely on his past decisions and takes similar decisions.

TECHNIQUES OR BASIS OF DECISION MAKING 4.Operations research: It helps managers by providing scientific basis for solving organized problems involving interaction of components of the organization. 5.Values : Being confused and unclear about one‘s values may affect decisionmaking ability. Overcoming a lack of selfawareness through values clarification decreases confusion. 6.Individual Preference : Overcoming this area of vulnerability, involves selfawareness, honesty and risk taking.

Characteristic of Decision Making Process • From various courses of action, it is a process of choosing a particular course of action. • It is a human process which involves the application intellectual abilities.

• It is a rational process which is proceeded by deliberation and reasoning. It may also be called as end process. Characteristic of Decision Making Process

Characteristic of Decision Making Process • It is always related to situation in which a manager may take one decision in a particular set of circumstances and another in a different set of circumstances. • This involves certain specific purpose in which these may just be decisions not to decide.

Common Challenges of Decision Making Having too much or not enough information. Gathering relevant information is key when approaching the decision making process, but it’s important to identify how much background information is truly required. “An overload of information can leave you confused and misguided, and prevents you from following your intuition,” . In addition, relying on one single source of information can lead to bias and misinformation, which can have disastrous effects down the line.

Common Challenges of Decision Making Misidentifying the problem. In many cases, the issues surrounding your decision will be obvious. However, there will be times when the decision is complex and you aren’t sure where the main issue lies. Conduct thorough research and speak with internal experts who experience the problem firsthand in order to mitigate this. It will save you time and resources in the long run, Corporate Wellness Magazine says.

Common Challenges of Decision Making Overconfidence in the outcome. Even if you follow the steps of the decision making process, there is still a chance that the outcome won’t be exactly what you had in mind. That’s why it’s so important to identify a valid option that is plausible and achievable. Being overconfident in an unlikely outcome can lead to adverse results.

Conclusion We hope this course has set you thinking about how you and others make decisions. It has been a very brief and to some extent shallow introduction to some quite complex ideas. We have taken a brief excursion through different perspectives on decision making and we have considered how we think about risk from these different perspectives. How can you use these ideas to improve your own and others' decision making? The first way is to use them to develop greater insight into the pressures and influences that may be affecting how you process information, think, and decide.