DECISION-MAKING: THE CHOICE PHASE

2.8 DECISION-MAKING: THE CHOICE PHASE

Choice is the critical act of decision-making. The choice phase is the o n e in which the actual decision is m a d e and where the c o m m i t m e n t to f o l l o w a certain course of action is made. The boundary b e t w e e n the design and choice phases is o f t e n unclear b e c a u s e certain activities can be p e r f o r m e d during b o t h of t h e m and b e c a u s e o n e can return frequently f r o m choice activities to design activities. For example, o n e can generate n e w alternatives while p e r f o r m i n g an e v a l u a t i o n of existing ones. T h e c h o i c e p h a s e includes the search, evaluation, and r e c o m m e n d a t i o n of an appropriate solution to the model. A solution to a m o d e l is a specific set of values for the decision variables in a selected alternative. In the MMS Running Case (see D S S in A c t i o n 2.16), choices were

e v a l u a t e d as to their viability and profitability. A c h o i c e was m a d e to correct data

70 P A R T I DECISION-MAKING AND COMPUTERIZED SUPPORT

DSS IN FOCUS 2.15

THE SEVEN DEADLY SINS OF DECISION-MAKING

Sawyer (1999) describes what she calls "the seven really involves understanding why and how they deadly sins of decision-making." These are common pit-

work)

falls of decision-making that decision-makers o f t e n 6. Hear no evil (discourage and ignore negative unwittingly encounter. They are all interrelated. The

advice—kill the messenger with the bad news) seven deadly sins are:

7. Hurry up and wait: making no decision can be the 1. Believing that you already have all the answers

same as making a bad decision (procrastination is (no attempt is made to seek outside information

not necessarily a good managerial technique). or expertise)

Of course, all of these lead to bad decisions that 2. Asking the wrong questions (you need the right

lead to unnecessary and high costs for firms and indi- information to make an informed decision)

viduals (including getting fired). Many of these "sins" 3. The old demon ego (a decision-maker feels he or

clearly i n v o l v e behavioral issues and lack of infor- she is right and refuses to back down from a bad

m a t i o n and expertise that leads to less objectivity policy or decision)

in the decision-making process. These "sins" often ap- 4. Flying-by-the-seat-of-your-pants saves money—

pear in the press and on the Web as ways not to make doesn't it? (by not seeking out information, an orga-

decisions.

nization saves money—and makes bad decisions)

Source: Based on D.C. Sawyer, Getting It Right: Avoiding the

5. All aboard the bandwagon: if it works for them, High Cost of Wrong Decisions , Boca Raton, FL: St. Lucie it'll work for us (copying s o m e o n e else's ideas

Press, 1999.

advertising plan was modified, and new data and features were to be added to the firm's D S S .

Note : S o l v i n g t h e m o d e l i s n o t t h e s a m e a s s o l v i n g t h e p r o b l e m t h e m o d e l represents. The solution to the model yieldsa recommended solution to the problem. The problem is

c o n s i d e r e d s o l v e d o n l y if t h e r e c o m m e n d e d s o l u t i o n is successfully implemented.

Solvinga decision-making model involves searching for an appropriate course of action. These search approaches include analytical techniques (solvinga formula), algorithms (step-by-step procedures), heuristics (rules of thumb), and blind search

( s h o o t i n g in t h e dark, i d e a l l y in a l o g i c a l w a y ) . T h e s e are c o v e r e d in C h a p t e r 4. Each alternative must be evaluated. If an alternative has multiple goals, these

m u s t all b e e x a m i n e d a n d b a l a n c e d o f f a g a i n s t t h e o t h e r s . S e n s i t i v i t y a n a l y s i s i s u s e d t o determine the robustness of any given alternative (slight changes in the parameters

s h o u l d i d e a l l y l e a d t o slight o r n o c h a n g e s i n t h e a l t e r n a t i v e c h o s e n ) . W h a t - i f a n a l y s i s is used to explore major changes in the parameters. Goal seeking helps the manager

d e t e r m i n e v a l u e s o f t h e d e c i s i o n v a r i a b l e s t o m e e t a s p e c i f i c o b j e c t i v e . A l l o f this i s covered in Chapter 4.