Decision making

Many of the techniques in Chapter 3 are attempts to make decision making more structured.

Many of the techniques in Chapter 3 on project selection are based on the rational-economic model.

Some research has found that organizations with the most comprehensive solution-seeking techniques are often the poorer financial performers!

Before we can look more closely at the effectiveness w ith which groups can make decisions we need to look in general terms at the decision-making process. Decisions can be categorized as being:

• structured, generally relatively simple, routine decisions where rules can be applied in a fairly straightforward way:

• unstructured, more complex and often requiring a degree of creativity.

Another w ay of categorizing decisions is by the amount of risk and uncertainty that is involved.

Yet another distinction is between the rational-economic model and the satisficing model. The rational-economic model of decision making is the basis of classical economics. It predicts, for example, that a prospective buyer of personal computer equipment will purchase goods at the lowest possible price. This assumes that the decision maker has a complete knowledge of the state of the market. In order to achieve this, days, weeks, or months could be spent phoning dealers.

Sensible people probably follow a satisficing approach and would look at a limited number of representative outlets to get a general idea of prices. Any potential loss of money through having missed an even lower offer would probably be offset by the sav ings in time, phonecalls. travel and so on.

Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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