Types Of Decision Making Environment Commerce Essay

In our day to day life we often face situation where we have to make decision. It could be an individual decision on obtaining a new car or perhaps a work decision to unveiling a new product. What can we do to fix this? How will this impact my children, my spouse? When will this task be completed? Just how much will it cost? To certain people, decision making is something that seems very hard and complicated for them to do. Some decisions are created to solve certain problem where some decisions are created for better changes. Making a decision is not a fairly easy task, an incorrect decision will impact you terribly while making a right decision will benefits and helps you. This statement will discuss the types of decision making surroundings and several examples that illustrate those conditions.


Decision making is the thinking process of deciding on a choice between several available options. It acts as an objective to remove any doubt and hesitation before we choose something. The best decisions tend to be the decision that may bring success and effective results. When doing decision making, we should look at both advantages and disadvantages of every option. We have to always think and consider all the alternatives prior to making up a decision. Sometimes there could be a better alternative choice that people didn't put under consideration, therefore it is very important to us to continue to keep keep tabs on and record down the key reason why decision are made. These paths and record can be utilized in the future for reference and improvements purpose, and will save us a lot of time by preventing any past errors. Wikipedia (2012) points out that

Decision making can be thought to be the mental functions (cognitive process) leading to selecting a course of action among several substitute situations. Every decision making process produces a last choice. [1] The end result is definitely an action or an thoughts and opinions of preference.

To make a good decision, the ability to forecast the outcome of the available options is very important. Regarding to Al-Tarawneh, Hussien A. (2012) Usually decision making process engaged the steps below

Define the Problem

Determine Requirements

Establish Goals

Identify Alternatives

Step 1. Determine the Problem

The first step of defining a difficulty is to collect all the required data and identify the reason and root causes of a problem. At this stage, our goal is to secure a conceptual definition. This conceptual classification will be use as basics that we can redefine and form later. However it does not imply that we are looking at simply a part of picture or just a wild estimate.

Step 2. Determine Requirements

At this stage, we determine certain requirements and conditions that must resolve the issue. As being a software installation, there are certain requirements that necessary to be reaching before it can be successfully installed. This is to ensure the solution we have been applying continues to be safeguarding our shareholder worth.

Step 3. Establish Goals

Goals are the desirable result that we would want to see in your choice making final result.

Determine the goals are in fact establishing a target very good compare to the minimum amount desires.

Example, the necessity of solving problem "A" is that people do not lost some of our existing customers in the process. Inside the other hand, create goals that people are aiming for is to boosts and get new customer. It always drives us to archive something better.

Step 4. Identify Alternatives

And last but not least we identify all the alternatives. Any of these alternatives must at least meet up with the lowest condition of requirements we've determine earlier. We must check out all the alternatives to see will it really meet up with the requirements or not. Those alternatives that not meet up with the need are removed. By doing these filtering, we will conclude with few of the best options. Following that we can compare and make a decision that your best alternative to choose from is.

3. 0 Types of Decision Making Environment

In decision making, we may encounter time where we just don't have the required information to produce a decision and keep having hesitation. Sometimes it's a decision that we have a great deal of information with and incredibly certain with the conditions. There are 3 types of decision making environment that people can classify. A couple of

Decision Making using Conditions

Decision Making in Uncertain Conditions

Decision Making in Risky Conditions

3. 1. 0 Decision Making using Conditions

Decision making under a certain conditions means that the person who makes your choice have all the complete and necessary data for him to consider. With all the current information available, see your face is able to predict what your choice result will will lead into. By in a position to predict the outcome we can easily make a certain decision with certainty. The outcome that provides the best consequence will usually be utilized and carried out. If we are given 2 choices and first selections are much better than the next choice, surely we can determine easily which option to choose from. Several examples of Decision Making using Conditions are as below

3. 1. 1 Example 1 (Personal)

Jason just goes to KL to work and he's looking for location to rent. He had been offered with two alternative rental places. Lease A and Rental B. Rental A is close to Jason's work place and is at walking distance. Rentals B is somewhat far from his working place and required him to operate a vehicle to walk. Both rentals fees are RM500 per room. With the complete information above, Jason can make decision in a very certain condition.

3. 1. 2 Example 2 (Consumer)

Shop ABC has just exposed beside Shop DEF which is selling an array of daily consumer products. Consumers around the region now have another substitute place they can shop from. Shop ABC has better overall price compare to look DEF, and Shop ABC worker are friendlier. Both Shop are open up from 8am to 10pm. Beside that Shop ABC have their own shop issues rewards greeting card where shop DEF don't have any special campaign. With the scenario above, the consumer has enough information to choose of these two places. This is a decision that will be made under certain condition.

3. 1. 3 Example 3 (Business)

ABC Company has been working for many years, which is a company that provides data entrance as service. The printers that they are using are incredibly obsolete and faulty from time to time. The panel of the business decided to change and recharge all the prevailing printers. Since there are large options of brand they can choose from, they have recently come out with the ultimate two different brand selections that are popular in the market. The final two alternatives of brand are Canon and HP. With all the current info easily collected from the printer's website, they were able to accumulate all the mandatory info easily and come out with a table to compare the downsides & pros to make the final decision of which brand they are going to purchase. With all the current information available, predictions are easy to make and this is a choice made under certain condition.

3. 2. 0 Decision Making in Uncertain Conditions

Making a conclusion if you are uncertain of the problem is comparable to insufficient information that will help us to choose. Because of insufficient information, the decision manufacturer doesn't know the near future and not in a position to predict the results of every option he has. In order to make a decision with such conditions, the decision maker would have to judge and made the decision based on their experience. If they do not have such experience, they need to consult and seek advice from people who have more experience. There's a little risk included there however since we are not able to predict the result however experience from days gone by would close the distance. The following are some examples when coming up with a decision in an uncertain condition. They are really

3. 2. 1 Example 1 (Personal)

Jason happens to be using a very old version of Nokia Phone. Seeing everyone is by using a very advanced cellphone, he decided to change his cellphone to a good phone. Smart cell phones in the market are using window OS, Apple Operating-system and Android OS. Jason never used such user interface on a mobile phone before. Which mobile phone Operating-system is more user friendly and which function of the telephone is better, he's not that certain. He then seeks advice from his friends and asks for thoughts. After getting enough advice, he then bought the smart phone. On this scenario, Jason does not have all the sufficient information, so he gets tips from his friends. Jason is making the decision within an uncertain condition.

3. 2. 2 Example 2 (Consumer)

A new make of cleaning detergent has been created into the market. It is call "Detergent XYZ" Within the advertising campaign and product boasting it's the most effective detergent ever before in market. Only 1 1 small glass of detergent would be sufficient to clean all the dusty clothes clean and white. Individuals are drawn to the new product however they are uncertain how well the merchandise is. Will this new detergent clean well? Would it bad for their skin area or hands? The only real information that the user know, it can clean but how well they won't know nevertheless the price of the detergent is cheap. In cases like this, consumers are choosing to buy the detergent within an uncertain condition.

3. 2. 3 Example 3 (Business)

ABC Restaurant is well-known for their chicken grain at Kampung ABC. They have been selling chicken grain for recent years. Business has been good; nonetheless they want to expend the business enterprise. Hence they made a decision to try out advertising Duck Grain, since that could first shop ever in Kampung ABC that acts that. ABC Restaurant is not sure will the people in the village would eat this new menu. Would people in Kampung ABC accept duck as well? How much would they sell Duck Rice? Will the Duck Grain be sold as the same price as Rooster Grain or cheaper? In cases like this, ABC Restaurant are facing a period where they are making the decision within an uncertain condition.

3. 3. 0 Decision Making in Risky Conditions

Making a choice in high-risk conditions means that people are making the decision that might result the condition even big or from bad to very bad. Only minimal information is available to predict the results. A wrong analysis on making the decision under high-risk conditions may result the company go through huge lost of income or even bankrupt.

3. 3. 1 Example 1 (Personal)

Jason has been around a marriage with Mariah for nearly 1 year. They both love each other. Mariah recommended to Jason so both of these get married. Jason now confronted with a situation where he has uncertain conditions that can help him to decide. Taking the relation to the next level or do not get married. Jason struggles to predict the outcome of the matrimony either would make him more content or suffer. It is because Jason only is aware of the girl for nearly 12 months, but sometimes it got very long or even forever to know one's true nature. Jason hasn't yet gets endorsement from his parents and it is not sure if Mariah parents like him or not. Jason is also doubting will this matrimony will results her current profession or not. However since Jason love Mariah so much, he just agrees to marry her. In this situation, Jason is making the decision under a high-risk condition.

3. 3. 2 Example 2 (Consumer)

A new pores and skin product has been release to the marketplace, it is just a face washer called ABC Face Cleaner. It is something commercialized to ensure skin whitening lead to just several time of using. There is absolutely no exact information make clear that how exactly does this product assist in improving the skin color and how long exactly it try get the effect. However due to the attractive price and the result promised, consumers decided to give the product a go. In this case, consumers are making a decision to choose the product under uncertain condition.

3. 3. 3 Example 3 (Business)

Company ABC has been retailing their services for quite a while. The table of the business is having a discussion either to avoid reselling the new product or put more investment to promote this product. The one information they have is the every week sales reports. It seems that for the first 7 weeks of the merchandise launching, the product are not offering good and are triggering them to suffer lost of earnings. However on the reviews, they also noticed that week by week the advertising rate is gradually increases. It is showing a rise sales rate development of 5% every week. Based on all the info they have, they say that, the product sales rate increase until 70% and company begins gaining gains starting on another 2 week. Without getting other information such as the way the consumers do see their product, they proceeded to go ahead and decide to get more upon this product. ACB Company is actually making the decision under a risky condition.

4. 0 Suggestion to boost Decision Making

Making a conclusion may seem very easy nonetheless it is not. To make certain that we've the best final result of your choice we made, we must ensure it is rational. The decision that people are making need to be based on thoughts, fair reason and also facts. To make sure we make the logical decision, Williams (2000) mentioned that six steps of process that must be adopted. This 6 process is proved at Body 4. 1.

Figure 4. 1 Rational Decision Making Process

Defining Problems

The steps of decision making always involving the steps of defining and identify the situation. The decision machine will have make a picture of the problems they are facing, and root cause of the challenge and the way to rectified them.

Indentifying Decision Criteria

In logical decision making, at this time we have been indentifying the decision criteria. These are the items that'll be put under consideration through the decision making.

Allocating Weights to Each Criteria

After determine the conditions earlier, we will then allocate weight to all of them.

The weight here identifies the impotency of these criteria. To determine the weight of each criterion, relative evaluations are usually used. By doing a relative comparison, we will able to identify which conditions are the most important.

Generating Alternative Solutions

In this stage, the next phase would be think and list down the choice solution.

The process would will go smoother if more alternatives are made.

Evaluating Alternatives

After listing down all the possible alternatives, in this stage we evaluate and judging these alternatives one by one. Home elevators each solution must be obtained prior to the comparison is manufactured.

Selecting the perfect Decision

The final part of logical decision making is to choose from the best choice solution from the list we've. The best alternate are determine by the most decision standards that are meet. The alternatives that meet up with the most will be preferred instead if there are no alternatives that meet all of the decision criteria that people have posted down previously,

4. 2. 0 Example of Rational Decision Making Scenario


Step Used

For example, my company lately notices that works are delayed by a lot due to worker productivity. After inspection has been performed, they discovered that problem happen due to decrease performance of the computer the employee are using. Hence the management made a decision to upgrade the whole computer at work to increase productivity.

Defining Problems

Management then identifies the criteria required to be taken under consideration when buying the new computers. Your choice criteria that are such as price, warrantee and system support. (Make reference to dining room table 4. 2)

Indentifying Decision Criteria

After all the criteria have been determine, they now organizing the weight of the conditions based on which will be the most important. In cases like this, employee know how to use the user interface is defined to the highest and warranty is defined to the lowest as they have their own IT support. (Make reference to stand 4. 2)

Allocating Weights to Each Criteria

Next is finding out all available alternatives and these alternatives will be assessed. The alternatives that'll be taken into account will be Apple, DELL and HP. (Refer to stand 4. 2)

Generating Option Solutions

After all available alternatives is outlined down, we then evaluated them based on the criteria that we have listed down recently (Refer to table 4. 2)

Evaluating Alternatives

Lastly we select and make the decision predicated on alternatives which may have the meet up with the criteria the most. (Refer to stand 4. 2)

Selecting the perfect Decision

Criteria that must definitely be meet




Employees learn how to use the operating system interface.




Able to reuse the software license.




Work Request Supported.




Price below RM3000 per unit.




Standard Warranty Period.




Onsite Warranty Service.




Own IT people able to support it.




Table 4. 2 Indentifying Decision Criteria

5. 0 Conclusion

Decision making skill is important in both personal life and cooperate environment. Able to make the right decision will fixed the problem permanently. Making the decision by using rational decision steps will assists with choosing the right outcome final result among all the alternatives.

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