Review the decision-making process. Discuss each step in the process and the relationships among them.

The decision-making process defines a decision problem, creates alternative courses of action, and chooses among them using decision criteria. The criteria for choosing among alternatives can include the cost, profit, danger, or pleasure of each alternative. Although decision making focuses on choice, it also intends to reach a goal.

Decision making fits within the larger context of problem-solving activities in organizations. Individuals in organizations, especially managers, face problems, opportunities, and events that require action. The problem-solving process identifies the problem, tries to find root causes, and creates options that become input to a decision-making process. Decision making is the part of the problem-solving process that chooses a course of action.

Both individuals and groups can make decisions. Individuals do a good job with well-structured problems that have several tightly coupled parts. Groups do a better job with ill-defined problems with loosely coupled parts. They work well with problems too complex for a single person to solve. Such decisions include those affecting multiple constituen cies and decisions needing the commitment of those affected to get effective execution.

Although decision making is a basic function of a manager’s role, nonmanagers also make decisions. Organizations that embrace quality management or use self-managing teams involve many nonmanagers in decision processes. Throughout this chapter, the term decision maker refers to a person at any organizational level who chooses a course of action when faced with a decision situation.