1.Which decision-making techniques and concepts described in this chapter are most appropriate to the BLM’s situation? Show how you would apply them.
2. What suggestions would you make to help the Bureau improve is handling of the wild horse problem?
3.How would you model this problem?
In this chapter, we examined four steps managers should take to make effective decisions. The chapter made the following points:
1.Decision making involves selecting one course of action from various alternatives. As such, it cannot be divorced from the planning process. There are at least four steps in decision making:
(i) identifying the problem or opportunity;
(ii) gathering facts;
(iii) making the decision;
(iv) implementing and evaluating the decision,
2.Effective administrators know that very few problems or events are isolated. Most are manifestations of underlying problems. Therefore, before attempting a quick fix on a series of problems, they try to discover the basic problem.
3.In framing the response to a problem, careful attention should be given to what is called the upper and lower limits of the decision. Upper limits of the decision refer to the ever-present limitations that determine how far the administrator can go. Lower limits of the decision refer to what, at a minimum, must occur for the problem to be solved. Barnard introduced an idea quite similar to that of lower limits that he called the limiting (or strategic) factor in decision making. This is the factor “whose control, in the right form, at the right place and time, will establish a new system of conditions which meets the purpose.”
4.In an era of scarcity, interest in weighing costs against benefits rises. The method of choice for these kinds of assessments is cost–benefit analysis (CBA). Most CBA involves familiarity with certain common elements: the measurement of cost and benefits, the distribution impacts, the discount factor, and decision rules.
5.Direct benefits and costs are those closely related to the main project objectives. Indirect benefits and costs, called extra realities or spillowers—are more in the nature of by-products. The term tangible is applied to benefits and costs that one can measure in dollars; those one cannot are referred to as intangible.
6.Opportunity cost is the value of what certain resources could have produced had they been used in the best alternative way.
7.One technique closely associated with cost-benefit analysis is cost-effectiveness analysis. This technique attempts to answer the question, How much output does one get for a given expenditure? The advantage of cost-effectiveness analysis is that output or benefits need not be expressed in dollars.
8.The technique of decision analysis can help us better structure complex problems. In this approach, the decision is not viewed as isolated because today’s decisions depend on the ones we will make tomorrow. And the quality of today’s decision depends on what may or may not occur tomorrow—and these are chance events we cannot control. In such situations, a payoff matrix or a decision tree can be helpful.
9.The four basic steps in systems analysis are problem formulation, modelling, analysis and optimisation, and implementation.
10.Operations research (or management science) and the Systems approach share many characteristics, but they are not the same. The scope of the former is narrower. It tends to be concerned with problems that can be represented by mathematical models that can be optimised.
11.Group decision making is generally called for when there are no immediate deadline pressures and the problem is relatively uncertain or complex and has potential for conflict, requires interagency or intergroup cooperation, and its solution has important personal and organisational consequences. Group decision making is also called for when widespread acceptance and commitment are crucial to successful implementation.
12.To make the best decisions, people must understand their own biases. Awareness of the following seven can help administrators make better choices: (1) seeing only one dimension of uncertainty; (2) giving too much weight to readily available or recent information; (3) being overconfident; (4) ignoring the laws of randomness; (5) being reluctant to audit and improve decision making; (6) seeing only one dimension of uncertainty; and (7) escalating commitment to a course of action in which people have made a substantial prior investment.
13.The general procedure for carrying out program evaluation is reminiscent of the classical research experiment. The steps are to (1) define the goals of the program; (2) translate goals into measurable indicators of goal achievement; (3) collect data on the indicators for those who have been exposed to the program and for those who have not; and (4) compare the data on program participants and controls in terms of goal criteria.