The simplest quickest decision exercise is the direct intuitive method. Deciders may simply assign percentage points between 0 - 100 to each option (or objective) to represent its relative priority or weighting. Variations on this intuitive method are used in such management methods as management by objectives outranking, social judgement theory, cost benefit analysis. Delphi, Kepner-Tregoe, Coverdale, nominal group method and decision analysis.
Magnitude estimation systematises the direct intuitive methods. Decider close one option as the common benchmark. This option is the same for everyone, has slightly below average priority relative to other options and is allocated an arbitrary value of 35 priority units. Each decider conpares all the options in turn with the benchmark option. He/she assigns priority units to them (between 1 and 999) all things considered given the benchmark is 35 units.
Judgement analysis is the most reliable and valued method and has built-in reliability checks when used with standard software packages (eg. PDS, Priorities) The Deciders successively compare one option with another, pair-by-pair on a judgement scale (Saaty 1980, Foster & Algie 1984)
Example:
Which Service Departments should expand?
All things considered, which option warrants more priority - Service Department A or Service Department B?
Hou much more priority does one Service Department warrant than the other in terms of the following 1-9 scale.
The absolute point 9 signifies a certainly as strong as our knowledge that the earth is round not flat. Generally, deciders try to avoid using the extreme points of the scale. They rarely use equality point (scale point 1) since there is usually a just noticeable difference in priority between options. They rarely use the absolute point (scale point 9) since there are few things they are as absolutely sure of as they're sure the earth is round.
The Judgement Scale
This is the judgement scale used when doing any judgement analysis exercise:
The following questions are :
Do we have any implicit sense of the relative priorities between all the options?
What do our valuations of the options amount to overall?
What is the priority scale implicit in our valuations?
From the answers to such questions, the individual decider's priorities can be immediately calculated using standard computer programs like Priorities, PDS, AHP, Lightyaer etc. which embody various validated techniques for deriving weights from paired comparisons (eigenvector, geometric means, etc). The decider's proposal is the resolution of the issue as given by the option priorities.
An Individual's Decision
Priorities are often collectively or participatively decided by teams, rather than by individual alone. The questions are:
The answer to these questions provides a team priority scale of options. The team priority scale is the one which articulates and satisfies each individual decider's priorities between options (as expressed in his/her individual weightings) to the maximum that is allowable of other decider's counteracting priorities are to be correspondingly satisfied.
This team priority scale provides the basis for forming a sufficient degree of consensus to enable collective decisions to be made and subsequent action to be taken. The higher the capability of building a consensus, the higher is the team capability for decision and action. Conversely, significant disensus tends to preclude concerted team decisions and actions.
Objective
Example : Which Service Department should expand?
Objective: Ideally, Currently, Optimistic, Pessimistic.
Deciders sometimes wish to approach decision-making more thoroughly, with some discussion of the pros and cons of each option. They may wish to consider serveral different factors or objective of comparison and unpack the general criterion "all things considered".
A Team's Decision
Issue: Which Service Departments should expand? Criterion: All things considered
A crieterion answers the question: why are some options more important than others? Unless the cireteria are resonably clear, we are likely like Alice in the Looking glass to find our heads "filled with ideas without knowing exactly what they are" or whether they are relevant to anything.
Objective embody the organisation's experience and wisdon. Unless they are specific, they become a mercenary army that can be turned on anyone. If too generalised, anyone can dip into them to justify any arbitrary decision. Some useful questions are :
What are we trying to achieve? Which objectives or objective do/ should guide our decisions and actions? What objective should guide our priority choices? What assumptions are we making?
Depending on the issue objective may be:
Contextual cireteria (eg. survival) provide relevant terms of reference which precondition or legitimate any decision. Contributive objective (eg. morale) provide arguments or reasons why a particular decision might in principle be justified. Constitutive objective include ego objective (eg. pleasure), peer objective (eg. belongingness) moral objective (eg. professional norms), manking objective (eg. consumer rights). Conditional objective (eg. financial limits) provide indications of the circumstances or constraints within which a decision appropriately applies
Some meta-objective are always implicitly or explicitly relevant over either the short or longer terms are
desirability or optimality (ie what's best) achievability, practicability, feasibility or likely impact (ie what's probable) acceptability to interested parties potential (what could be best)
Some objective used in successful business include
Some tests of adequate objective are:
Can you decide relative weightings between them? Does it make sense to say that any one objective is more important than the others for some relevant reasons?
Policy
The influence of these factors or objective on the final decision will vary as each decider will have different views about the relative importance of each criterion or objective. The deciders weighting of the objective or objectives constitute his/ her proposed policy. The team weighting constitutes the team policy.
The focal questions are:
What are our policy-related priorities? Do our priorities and policies aligh? How do our objective apply to options? What are the implications of our objectives for this issue? What policies are implied by our options priorities?
Each decider applies the objective to the option. He/she runs through each criterion in turn to produce an overall weighting of options with-objective. These are the priority of all the options in the light of each criterion in turn and the weighting of each criterion.
Decisions
The final decision is given by the overall priority weighting of all the options on all the weighted objective by all the relevant deciders to the extent of their influence. This covers : - Individual and team priorities. - Individual and team objective weights. - Individual and team option priorities on a objective-by-objective basis. - Measure and standard of individual and team consistency, coherence and agreement. There are three basic kinds of decision corresponding to three kinds of issue. The top option alone is taken up in One-answer decisions. If only one option can be implemented, then the highest priority option is the decision. All options are taken up in Do Everything decisions in which all options can be – something must be – implemented. The priorities indicate the degree of commitment and their ranking may indicate the sequence of action. The top set of priority options are taken up in Balanced decisions where several options can or should be implemented. Objective questions about the final decision include: Is the decider consistent? Is the decision coherent? Does it reflect intended policy? Do the team agree? Have they thought the issue through individually or together? Are all deciders satisfied this is the most justifiable decision achievable? A series of startling discrepancies are regularly revealed in most managerial decision-making evaluated by the priority scaling approach (Algie & Foster 1984). Team decisions are found to be at variance with the views and wishes of individual members of the team taken together. Each decider’s priorities between options are almost invariably at odds with their reasoning and objective. When discovering their explicit priorities and inconsistencies, deciders almost invariably want to revise their decisions if the issue is at all difficult and significant. Without going through such a process, deciders have to await feedback from real life on their unconfirmed and typically inconsistent decision. Reality can be a harsh teacher.