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Unit 5: Decision-making

(d) Mental fatigue occurs, which results in slower work or poor quality work. Notes
(e) Decision fatigue occurs, where the decision-maker tires of making decisions. Often
the result is fast, careless decisions or even decision paralysis–no decisions are made
at all.
3. Decision Streams: A common misconception about decision-making is that decisions are
made in isolation from each other: you gather information, explore alternatives, and
make a choice, without regard to anything that has gone before. The fact is, decisions are
made in a context of other decisions. The typical metaphor used to explain this is that of a
stream. There is a stream of decisions surrounding a given decision, many decisions made
earlier have led up to this decision and made it both possible and limited. Many other
decisions will follow from it.

Examples:
(a) When you decide to go to the park, your decision has been enabled by many previous
decisions. You had to decide to live near the park; you had to decide to buy a car or learn
about bus routes, and so on. And your previous decisions have constrained your subsequent
ones: you can't decide to go to a park this afternoon if it is three states away. By deciding
to live where you do, you have both enabled and disabled a whole series of other decisions.
(b) When you enter a store to buy a VCR or TV, you are faced with the preselected alternatives
stocked by the store. There may be 200 models available in the universe of models, but
you will be choosing from, say, only a dozen. In this case, your decision has been constrained
by the decisions made by others about which models to carry.

5.2 Decision-making Process

Managers have to make decisions, whether they are simple or extremely complex. Making a
good decision is a difficult exercise. It is the product of deliberation, evaluation and thought. To
make good decisions, managers should invariably follow a sequential set of steps. Decision-
making is a process involving a series of steps as shown in the Figure 5.1 below.
First Step: The first step is recognition of the problem. The manager must become aware that a
problem exists and that it is important enough for managerial action. Identification of the real
problem is important; otherwise, the manager may be reacting to symptoms and fire fighting
rather than dealing with the root cause of the problem. In order to monitor the problem situation
(decision-making environment), managers may have to look into management reports, check
progress against budgets, compare the results against industry competitors, and assess factors
contributing to employee efficiency or inefficiency, etc. They have to use judgement and experience
in order to identify the exact nature of the problem. In other words, the manager must determine
what is to be accomplished by the decision.
Second Step: The second step in the decision-making process is gathering information relevant
to the problem. A successful manager must have the ability to weed out the wheat from the chaff
before deciding on a specific course of action. Once aware of a problem, he must state the real
problem. He must try to solve the problem, not the symptoms. The manager must pull together
sufficient information about why the problem occurred. This involves conducting a thorough
diagnosis of the situation and going on a fact-finding mission.
Third Step: The third step is listing and evaluating alternative courses of action. Developing
alternative solutions (to the problem) guarantees adequate focus and attention on the problem.
It helps managers to fully test the soundness of every proposal before it is finally translated into
action. During this step, a thorough "what if" analysis should also be conducted to determine the

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