MANAGEMENT DECISION-MAKING TECHNOLOGY
As was discussed in Chapter 1, decision making is one of a manager’s primary
functions. Clancy (2003) maintains that even the most experienced manager cannot
eliminate all uncertainty when making decisions. However, to assist the manager
in making decisions, management analysts have developed tools that provide
order and direction in obtaining and using information or that are helpful in selecting
who should be involved in making the decision. Because there are so many of
these decision aids, this chapter presents selected technology that would be most
helpful to a beginning manager. Some of these aids encourage analytical thinking,
others are designed to increase intuitive reasoning, and a few encourage use of both
hemispheres of the brain.
Quantitative Decision-Making Tools
Some management authors label management decision-making aids as models;
others use the term “tools.” It is only important to remember that any decision-making
aid always results in the need for the person to make a final decision and
that all aids are subject to human error.
Decision Grids
A decision grid allows one to visually examine the alternatives and compare each
against the same criteria. Although any criteria may be selected, the same criteria
are used to analyze each alternative. An example of a decision grid
When many alternatives have been generated or a group or committee
is collaborating on the decision, these grids are particularly helpful to the process.
This tool, for instance, would be useful when changing the method of managing
care on a unit or when selecting a candidate to hire from a large interview pool.
The unit manager or the committee of nursing staff would evaluate all the alternatives
available using a decision grid. In this manner, every alternative is evaluated
using the same criteria. It is possible to weight some of the criteria more
heavily than others if some are more important. To do this, it is usually necessary
to assign a number value to each criterion. The result would be a numeric value
for each alternative considered.
Decision Trees
Because decisions are often tied to the outcome of other events, management
analysts have developed decision trees. Used to plot a decision over time, decision
trees allow visualization of various outcomes. The decision tree in compares the cost
of hiring regular staff to the cost of hiring temporary employees.
Here the decision is whether to hire extra nurses at regular salary to perform
outpatient procedures on an oncology floor or to have nurses available to the unit
on an on-call basis and pay them on-call and overtime wages. The possible
consequences of a decreased and an increased volume of procedures must both be
considered. Initially, costs would increase in hiring a regular staff, but over a
longer period of time, this move would mean greater savings if the volume of
procedures does not dramatically decrease.
Program Evaluation and Review Technique
Program evaluation and review technique (PERT) is a popular tool to determine
the timing of decisions. Developed by the Booz-Allen-Hamilton organization
and the United States Navy in connection with the Polaris missile program,
PERT is essentially a flowchart that predicts when events and activities must
take place if a final event is to occur.
PERT chart for developing a new outpatient treatment room for oncology procedures.
The number of weeks to complete tasks is listed in optimistic time, most likely time,
and pessimistic time. The critical path shows something that must occur in the
sequence before one may proceed. PERT is especially helpful when a group of people
are working on a project. The flowchart keeps everyone up-to-date, and problems are
easily identified when they first occur. Flowcharts are popular, and many people
use them in their personal lives.
Charting Workflow
Think of some project you’re working on; it could be a dance, a
picnic, remodeling your bathroom, or a semester schedule of activities
in a class.
Assignment:
Draw a flowchart, inserting at the bottom the date activities
for the event are to be completed. Working backward, insert critical tasks
and their completion dates. Refer to your flowchart throughout the project
to see if you stay on target.