Please discuss in detail the various decision making methodologies in management and the hows and why you would prefer one method as opposed to another. Also discuss alternative solutions.
Please provide appropriate level references.
Decision making method:
THE PARETO METHOD: This uses the 80/20 principle that if you solve 20 percent of the problems you can get 80% of the benefits.
1. In this the problems are listed and so are the options that are available.
2. Group the options that are parts of a larger problem.
3. Apply an apposite score to each of the options.
4. Work at the group with the highest importance.
The Pareto analysis not only allows the decision maker to solve the most important problem but it also provides a weight showing how important the problem is.
The alternative solution is to work through all the problems, not only can it lead to loss of focus but also lead to solving unimportant problems.
Decision Making Using COST BENEFIT ANALYSIS:
In this decision making method a financial value is assigned to costs and benefits. If the cost/benefit ratio is satisfactory then the decision to go ahead is taken on the other hand if the cost/benefit ratio is not satisfactory then the decision not to go ahead is taken.
Cost benefit analysis works well when it is easy to assign figures and numbers to different option.
Alternative solution is that when the cost benefit is not taken into account those decisions that might lead to loss may be taken up.
Decision Making Method; SIX THINKING HATS:
This means taking different perspectives at the problem; It forces the ...
This explanation provides you a comprehensive argument relating to decision making methodologies, including the selection of methods and alternatives to each. 897 words with references.