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Making
Decisions

Chapter Ten
McGraw-Hill/Irwin
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.

Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

Models of Decision Making
Decision making
 identifying and
choosing solutions
that lead to a desired
state of affairs

10-2

Models of Decision Making
The Rational Model
 proposes that managers use a logical four-step
approach to decision making.

10-3

Rational Model
Identifying the Problem
 Problem – exists when the actual situation and
the desired situation differ
 Opportunity - represents a situation in which
there are possibilities to do things that lead to
results that exceed goals and expectations

Generating Solutions
 For routine decisions alternatives are readily
available through decision rules
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Rational Model
Selecting a Solution
 Is the potential solution ethical?
 Is it feasible?
 Will it remove the causes and solve the
problem?

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Rational Model
Implementing and Evaluating the
Solution
 After solution is implemented, the evaluation
phase is used to evaluate its effectiveness
 Optimizing – producing the best possible
solution

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Summarizing the Rational Model
1. The quality of decisions may be enhanced...

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