DEnM 323: Management
Decision in Engineering
Report in Unit 1B
COMPLEX DECISIONS
PRESENTED BY: JOHN MICHAEL B. BASA
DEFINITION
COMPLEX DECISION
- is the act or process of deciding which composed of two or
more parts that are hard to separate, analyze or solve.
Other areas of decision theory are concerned with decisions that are difficult simply
because of their complexity, or the complexity of the organization that has to make them.
Individuals making decisions are limited in resources (i.e. time and intelligence) and are
therefore boundedly rational; the issue is thus, more than the deviation between real and
optimal behaviour, the difficulty of determining the optimal behaviour in the first place.
-Wikipedia
Levels of Decision-Making
Scope of Decision
Decision Making is a complex process that must be understood completely
before it can be practiced effectively.
Decision making can occur at several levels.
1. Individual acting to satisfy his needs. (Maslow Hierarchy of Needs).
Levels of Decision-Making
Scope of Decision
2. Relates to the solution of problems – personal, employment or social.
a. Problem solving by individuals entails the use of strategies (plans or
patterns) of searching for relevant alternatives, especially when the
slightest degree of complexity prevails.
b. Problem-solving behavior is adaptive. Individuals start with a tentative
solutions , search for information, modify the initial solution, and
continue until there is some balance between expected and realized
results.
c. Even in the most restricted problem-solving situation, the individual’s
personality and his aversion to or preference for risk enter into his
choice of strategies, his use of information and his ultimate solution.
Levels of Decision-Making
Scope of Decision
3. In complex society, individuals usually find need satisfaction as member of
groups that have particular purposes. Group choices reflect a special synthesis
of compromised desires of individual members.
a. Organizations make extensive used of programmed decisions, which
involve reasonable well-structured pattern of search
b. Organizations often use rather simple rules of thumb to make decisions as
well as the analytical frameworks that are so often attributed to
organizational decision making.
c. Organizations make decisions that are bound and biased by the local
rationality of the decision unit.
d. Organizations engage in directed search for relevant alternatives.
e. Organizations learn.
Levels of Decision-Making
Scope of Decision
4. Decision making at the level of the organizations is expressed primarily
through the basic function of the manager: (1) planning, (2) organizing, (3)
staffing, (4) directing, and (5) controlling.
5. Decisions made at the level of the system of enterprise tend to be oriented
toward: (1) consumer welfare, (2) allocation of resources and (3) production
and distribution of goods and services.
6. Decisions are also made at the level of the total society which the primary
objective is social welfare with significant corollaries of (1) good life, (2)
culture, (3) civilization, (4) order and (5) justice.
Decision Characteristics
Complex Decisions
Category I: decisions are most likely to be
made by individual managers at the
operating level of organization
Category II: top managers normally
concentrate, which may be made in one
or more groups, including middle
manager, and formally ratified by the
chief executive, or which, to a lesser
extent, may be made unilaterally by him.
Characteristics of a Complex Decisions
Uncertainty
Interpersonal
Impacts
Intricacy
Complex
Decisions
Alternatives
Risk
Complex Decisions
Uncertainty
A decision under uncertainty is when there are many unknowns and no
possibility of knowing what could occur in the future to alter the outcome
of a decision.
Competitor
s
Governmen
t
Legislations
Economic
Shift
Technologic
al Changes
Customer
Demand
Complex Decisions
Intricacy
The definition of intricacy is the quality or state of being complex or
showing a strong attention to detail.
Cost
Location
Barber
Customer
Feedback
Hazard Control
(COVID)
Complex Decisions
Risk
Risk is defined as the probability of an event and its consequences. Every
decision has a certain level of risk (possibility of a negative outcome) associated
with it.
LOW RISK
HIGH RISK
Complex Decisions
Alternatives
It is a choice limited to one of two or more possibilities, as of things,
propositions, or courses of action, the selection of which precludes any
other possibility
Burger
Pasta
Rice Meal
Outcome
Decision
• Alternative
s
Goal
• To eat
• Satisfactio
n
Complex Decisions
Interpersonal Impacts
It deals with the way individuals choose to conduct themselves, how their
behavior effects others and the type of interaction within the structure of
relationships.
HISTOR
Y
DIFFERENCE
S
CULTURES
VALUES
GOALS
COMPLEX DECISION-MAKING
According to Anton Rossouw, we live in a world of uncertainty
because the future is inherently un-knowable, but we can make
sense of it and guess what the future may hold for us. That is
complex decision making where there is no one obvious right
answer to any question but multiple answers that can lead down
multiple paths.
In a complex decision-making situation, there
is no obviously correct choice. Instead, there
are multiple answers that warrant further
experimentation before committing to a single
approach.
Characteristics of Complex Decision Making
Decision on “What” and Decision about
“How”
Research in decision making has
traditionally focused on how people – as
individuals – choose among alternatives
and specifically about how they go about
finding the best alternative or making the
right decision.
Infinitely
Sensitive
Completel
y
Informed
Rational
Rational Decision
Maker
homo economicus (Lee,
1971)
Characteristics of Complex Decision Making
Decision on “What” and Decision about
“How”
Decision making as Identifiable Process.
• The assumptions of homo economicus refers to the nature of decision
making as a process, as something that takes place in the mind of
individual decision maker.
Decision making as an activity.
• Decision making is not discrete and identifiable event, but rather
represents an attribution after a fact.
• Decision making is not a primarily a choice among alternatives.
• Decision making is not usually a distinct event that takes place at a specific
point in time, or within a certain time window and which therefore can be
dissociated or isolated – even if ever so briefly – from what goes on in the
environment,.
Characteristics of Complex Decision Making
Decision on “What” and Decision about
“How”
Decisions and actions
Characteristics of Complex Decision Making
Decision on “What” and Decision about
“How”
Feedback
• Lag behind
• Invariably aggravate any
shortage of time
• Impossible to make plans
Feedforward
• Predictions may be inaccurate
and inappropriate
• May lead to unexpected
results
Balance between feedback and feedforward
Characteristics of Complex Decision Making
Decision on “What” and Decision about
“How”
Efficiency-thoroughness trade-off (ETTO)
• It is a common feature of human performance on the level of individuals
and of organizations alike.
Efficiency
Thoroughness
• means that the level of
investment or amount of
resources
used
or
needed to achieve a
stated goal or objective
are kept as low as
possible.
• means that an activity is
carried out only if the
individual or organization is
confident that the necessary
and sufficient conditions for
it exist so that the activity
will achieve its objective and
not create any unwanted
side-effects.
Characteristics of Complex Decision Making
Decision on “What” and Decision about
“How”
Decision failure modes
In the field of human reliability and socio-technical accident analysis, failure
modes are characterized in terms of the possible manifestation or phenotypes
(Hollnagel, 1993).
Characteristics of Complex Decision Making
Decision on “What” and Decision about
“How”
Consequences
The definition of consequence is ” a result or effect of an action or condition.”
Changing the view of decision making from focusing on what to focusing on
how also changes the issue of decision support completely. One consequence is
that decision automation is no longer an issue, since decision making cannot be
automated without ceasing to be decision making. The further consequence is
that discussion of “intelligence” in decision support must also change.
Characteristics of Complex Decision Making
Decision on “What” and Decision about “How”
What to do?
How to do it?
Stay in control
Cope to complexity
• Balance
• ETTO
• Consequence
Distinct process
Become part of
activity and system
(Decision and
Action)
Conclusion
Decisions become complex due to several factors that may influence
the decision-maker, the process and the decision itself. These factors
can be:
1. Level of Decision-Making. The higher the rank and number of
individuals to be managed the higher the decision complexity. This
can change the structure of decision-making.
2. Characteristics of Complexity. It is discussed that decisions
become complex due to uncertainty, intricacy, risk, alternatives and
interpersonal impact.
3. The Decision-Process. The process is susceptible to external force
that can affect the structure of decision and increase its
complexity.
Additional
What makes some decisions more complex than
others?
❖ The problems are not posed in a form amenable to classical decision theory
❖ There are fundamental domain uncertainties.
❖ Decisions may be unique (non-repeated).
❖ There may be multiple stakeholders and participants to the decision.
❖ Domain knowledge may be incomplete and distributed across these stakeholders.
❖ Beliefs, goals and preferences of the stakeholders may be diverse and conflicting.
❖ Beliefs, goals and preferences of stakeholders, the probabilities of events and the
consequences of decisions, may be determined endogenously, as part of the decision
process itself.
Additional
What makes some decisions more complex than
others?
❖ The decision-maker may not fully understand what actions are possible
until he or she begins to execute.
❖ Some actions may change the decision-making landscape, particularly in
domains where there are many interacting participants.
❖ Measures of success may be absent, conflicting or vague.
❖ The consequences of actions, including their success or failure, may
depend on the quality of execution, which in turn may depend on attitudes
and actions of people not making the decision.
❖ As a corollary of the previous feature, success of an action may require
extensive and continuing dialog with relevant stakeholders, before, during
and after its execution.
Additional
What makes some decisions more complex than
others?
❖ Success may require pre-commitments before a decision is finally
taken.
❖ The consequences of decisions may be slow to realize.
❖ Decision-makers may influence the consequences of decisions and/or
the measures of success.
❖ Intelligent participants may model each other in reaching a decision,
what I term reflexivity.
REFERENCE:
❖
Wikipedia
❖
Merriam-Webster Dictionary
❖
Cook, M., Noyes, J. & Masakowski, Y. (2006). Decision Making in Complex Environment. Alexandra House
❖
Wanamaker, C. (2016, August 29). Simplifying the Complex Decision Making Process. Website.
https://discover.hubpages.com/business/Simplify-the-Complex-Decision-Making-Process
❖
McBurney P. (2021).What makes some decisions complex?. Website. https://gdrc.org/decision/complexdecisions.html
❖
Rossouw A. (2013). Complex Decision Making. Website. https://tabar.com.au/blog/2013/7/26/personalcomplex-decision-making
❖
Harrison, E. (1975), The Managerial Decision-Making Process, Houton Mifflin Co.
Engr. John Michael B. Basalo
EMAIL ADD : jmbbasalo@gmail.com
FACEBOOK: Jey Emhinyero
CP NO: . +639173040210