Page 288 - DCOM303_DMGT504_OPERATION_RESEARCH

Unit 14: Decision-making

This does not mean that the process is simple. With the advances of computing technology, Notes
intelligent machines communicate with each other. As mechanical power replaced human muscle
power at the start of the industrialisation so will computing power replace brain power, which
it is already started doing. A wide spectrum of decisions involving virtually all fields of human
endeavor will now be made by machines. Initial emphasis in this type of decision-making has
been on modeling machine decisions on human decisions. Now the emphasis is shifting to
artificial intelligence process which has wide applications in the area of management as well.
All types of human decision-making are intellectual processes. This process has its roots in both
the conscious as well as the subconscious mind and always involves three stages. The first one is
cognition. It is the starting point for the mind that has searched for facts in the environment in
order to make a decision. Cognition means discovery or recognition of data that are assembled
into an information system. This assembly of recognised facts into usable information systems
represents the second stage. The mind may employ convergent or divergent thinking properties
in the assembly process. Finally, there is the testing stage: At this point the decision maker
evaluates the cognites in terms of their relevancy to a given problem. Either a decision is made
or not and any number of managerial action programs are the outcomes of this intellectual
process.

There might be one or more subconscious intellectual components that affect the decision-
making process negatively. The two most common flaws in decision-making are inertia and
impatience. This is a paradoxical situation. Inertia is often due to a fear of change. Impatience, if
regarded superficially, may appear to be somewhat of an opposite to inertia. But it has the same
roots.
Some other possible major contaminants of the decision-making process either rest in the
individual decision maker himself/herself or represent flaws in the general logic that is
employed. In the first case mental sets are operative which are consistent as well as persistent
and become especially pronounced in unstructured or ambiguous decision-making situations.

Whereas the subconscious decision-making frames of reference can be analysed in their effect
only once a decision has been made, flaws in the general logic can be minimised-although not
eliminated-by the appropriate design of the models and quantitative analyses that underlie the
decision-making process. Moving from general to technical, one may start with tabloid thinking
which represents an oversimplification of complex matter. Related to this logical flaw is the
over generalisation from the specific and, unless very carefully used, the arguments form analogy,
e.g., what is good for public sector is good for India. The first flaw may be called denying the
antecedent, the other affirming the consequent. The first is known to the reader in its general
configuration as - "if A is true, B is true and therefore if A is false, B must be false" like in "the only
way to increase profits is to increase sales". A may be necessary or sufficient to make B true, but
it may be quite false to argue that B could not be false without A being false. The second,
affirming the consequent, is often made in forecasting studies or relationship analyses as shown
later. In its general configuration it is known as - "if A is true, B is true and therefore if B is
true, A is true." This statement presupposes a reversible cause and effect relationship between
the two variables. However, cause and effect relationships-aside from being spurious-may be
(1) necessary, (2) sufficient, (3) contingent and (4) contributory.
They are explained below:

1. Necessary implies A must exist to cause B,
2. Sufficient implies A alone could cause B but B may be caused also by C,
3. Contingent implies A causes B but only if C is present, or
4. Contributory implies A increases the probability of B's occurrence.

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