All entries for March 2011
March 18, 2011
There are many tools and techniques that have been discussed during the 'RDM' module. AHP is one of the most important technique among those tools for decision making and chosing between alternatives. It is a technique that is used in many organizations today fotr decision making. It does a pairwise comparison of the alternatives or choices that we have and also the attributes. It first does the pairwise comparison of attributes and then the alternatives with attributes and at the end we chose the one with more value.
It is a very important method for quantitative decision making and a lot of numbers are used to come up with the final decision. So, it can be used when there is a problem of uncertainity regarding some decision and there is a need to make a robust decision.So, we can use this tool in the future to deal with some complex or imporatant decision.
March 15, 2011
Among many of the tools used for effective decision making Decision Tree is one of the most important ones. It is a step by step procedure that shows the whole decision process in the form of a diagram. It is used to chose between alternatives if we are dealing with an important decision. It is presented in the form of a tree with branches, decision nodes and branch nodes. We assign probabilities to the chance events that may occur and also put costs associated with different decision nodes. We need to know the monetary values or utility values in order to make effective use of this technique.
It is very helpful when selecting among two options within consideration. It is an effective decision making tool that is used in many organizations for important and complex decision making. So, we can use this powerful and systematic tool in our organizations for effective and vital decision making.
Throughout our lives we daily encounter situations and problems where we have to make decisions. Decison making is an integral part of human life and is present everywhere. There is hardly any situation, process or position where we don't have to make decisions, in short it is a an inevitable activity and proper thinking is required for effecient decision making. Although, decisons could be by very less effort and consideration but they cannot yeald good results. To produce effective results the decison making process should be sequenced and the decison should be robust. A robust decision is one that yealds good results no matter what the circumstances are and it is very important in the business processes. Business decisons should be robust because there is no room for error whilr making a professional decision. THis module also teaches about the proceses and tools that can aid in robust decision making and are used all over for making effective business decisions.
So, decison making is very imporatant and a challenging task is today's business world and it is veru important to follow methods and procedures to conduct this activity. It is the basis for any successful process / business and should be robust in order to yeald effective results. Good decisions often lead to good results but there is very less probability that bad decision would lead to excellent results.
When it comes to casual decision making, our visual judgement plays a very important role. We tend to follow a step by step process. First of all when we see something, we immediately interpret it according to our visual judgement and come up with a decision. But this judgement process is not reliable for complex situations because our visual jugdement can often be wrong and result in a wrong decison because we tend to overlook things that can result in false judgement so it cannot be trusted. We also saw an interesting Gorilla video through which we found out that human sight tend to notice and focus on few things and does not capture everything. So, these natural human behaviours can lead to misinterpretation and wrong judgement. It is a faliure of system 1 thinking and our visual capabilities cannot capture all the objects within sight.
It is really imporatant to notice and learn about these shortcomings because although they don't make a lot of difference otherwise but while in a complicated tituation this could be misleading. So, we should not trust our raw judgement and try to use system 2 thinking instead of system 1 thinking.
In normal situations, there is no great need to follow any procedure or method to come come up with a decision, random jugdement can be used to take a decision and many of the times it is the right decision as well but when it comes to tackling complex and challenging situations vague understanding and judgement is not suitable. For example while handling business problems and situations there is a need to adopt a proper way for making important decisons. So, while tackling important situations system 2 thinking is required. It helps to come up with an authentic decision by following a step by step procedure of first understanding a situation / problem, analyzing it and then coming up with a decision in a sequential manner. It requires effort and is based on logic.
System 2 thinking is really imporatant because we face a lot of complicated situations and we do require critical thinking because imporatant situations cannot be interpreted vaguely and there should be a proper thought process for handling them. For many of the professional decisions system 2 thinking is considered authentic and is used all over. So, we should not rely just on our instincts while making crutial decisions and should apply logic.
System 1 thinking is a that can be used for making simple daily routine decisions. It is a decision that is reached without any proper thinking process and systematic procedure, without taking any factors into account. It can not be useful when there are complex pronlems at hand because in case of a complex issue first of all one has to understand the problem first and then reach a decision because it can not be tackled without proper consideration. System 1 thinking is also misleading because human intuitions are not strong and personal judgement can lead to false decisions.
Although system thinking is very important because it helps us to judge normal situations and immediately come up with a decision according to our thinking but is not feasible for complex situations and can often lead to falseinterpretation and therefore a wrong decision. So, one should only use system 1 thinking in everyday situations. Because human judgement capabilities are noty enough for all kinds of problems.