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Decision Making in Organizations

Decision Making in Organizations
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  • 0:05 How to Make a Decision
  • 0:57 Stages of Decision Making
  • 2:34 Types of Decisions
  • 4:39 Lesson Summary
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Lesson Transcript
Instructor: Paul Zandbergen

Paul has a PhD from the University of British Columbia and has taught Geographic Information Systems, statistics and computer programming for 15 years.

Information systems support decision making in organizations. Understanding the nature of decision making can help in using information systems more effectively.

How to Make a Decision

Effective decision makers are needed in every organization. How an individual makes decisions, however, differs from person to person. Some people take their time to make decisions, while others make quick decisions. Some people follow a particular strategy, while others go with their intuition.

Consider how you decided where to go to college. You needed to decide what to study and where. How did you decide this? Did you follow a logical series of steps, or did you follow your instinct? Maybe you woke up one day and just knew the right answer, or perhaps you've been agonizing over the decision for months and still can't decide?

Now consider what information you used to make your decision. How important were the opinions of your family and friends? Did you use a guide to decide the best college? Did you have any peers in school who influenced your decision?

Stages of Decision Making

You can think of making a decision in terms of three stages of decision making:

1. Intelligence stage - You identify the problem or opportunity and determine the constraints.

The problem could be that you need a good college degree to start a great career. So you need to decide where to go to college. The constraints could be things like the cost of tuition, the distance to your family and the majors you are interested in.

2. Design stage - You develop alternative solutions and evaluate their feasibility.

In this stage, you would collect information on a number of colleges and come up with some of their pros and cons. Perhaps one college is more prestigious and more costly, but it's one of the best places for your major of interest, and they offer scholarships if your grades are good enough.

3. Choice stage - You decide on a course of action.

Ultimately, you need to make a decision because the application deadlines are coming up. You need to weigh the information you have organized about the various colleges and make the decision that you think is the best for your long-term goals in life. Not that easy, is it? Once you have decided where you want to go to college, you need to complete the applications and actually get into college!

While these stages sound a little abstract, they help to think about the information you need along the way. For example, some of the resources at Study.com may help you find out which universities are good places to study the majors you are interested in. Other resources may help you compare the tuition costs and the availability of scholarships at different colleges.

Types of Decisions

There are a number of different ways to look at decisions. One way to characterize decisions is to look at them as programmed or non-programmed. A programmed decision is one that can be made into a rule or rigorous procedure.

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