Abstract
Decision-making systems are computer-based systems that interpret processed information to make the best choice. They choose an action or value from possible activities, each conducting to different outcomes. Some outcomes are favored over others based on the criteria of the decision maker. This article presents the existing technology used in decision-making systems. The authors focus then on explaining how to make the optimal decision based on the available information and criteria. The authors conclude that decision techniques are chosen based on the type of application and the quality of available data. Some techniques are simple but not accurate such as the fishbone and five whys techniques. Other methods, such as decision trees, are more complex to build, but unlike a fishbone diagram, it assists humans in evaluating upcoming choices. It forces the examination of all available outcomes of a decision and traces a possible path to the best alternative.
TopIntroduction
Decision-making is one of the steps that humans take in every moment in their lives. When they open their eyes from the early morning, they start making decisions to snooze the alarm or get up. All long the day, decisions make a big part of human life.
After a simultaneous interaction between multiple functional systems differently, decisions are taken; each has its pros and cons. Individuals in organizations use the information collected and processed to make good decisions. These decisions may influence and change the course of the organization and the lives of other employees in this organization. In the business dictionary (Gibson, 2009), decision-making is the thought process of selecting a rational or logical choice from a set of available options. Decision-making theory was first introduced by Simon (Mintrom, 2015). The decision-making process consists of two parts: the actual decision-making process and the implementation process.
In (Scott & Bruce, 1995), the authors proposed four different types of decision-making models: Rational decision-making style, in which thorough research for alternative logical evaluation is done
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Intuitive decision-making style, in which reliance on hunches is the main characteristic
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Dependent decision-making style, which depends directly on advice and direction from others
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Avoidant decision-making style, in which we try to avoid making decisions
The decision-making theory is a multidisciplinary field where philosophers, economists, psychologists, computer scientists, and statisticians are expertise. Generally, two types of decision theory can be distinguished: normative and descriptive decision theory. These theories are studied separately.
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Normative decision theory, which looks for yield instructions about what decision-makers are rationally required or must
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Descriptive decision theories that describe and predict how people make decisions; it is a practical discipline, which was first introduced and experimented with within psychology.
Furthermore, decisions are classified into three categories based on the level at which they happen:
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Strategic decisions adjust the journey of an organization.
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Tactical decisions are the decisions about how things will happen.
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Operational decisions refer to the decisions taken daily by employees.
Table 1 shows examples of decisions level within an organization.
Table 1. Examples of decision levels, decision cases, and decision makers
| Decision Level | Example | Decision Maker |
| Strategic Decision | • Merge with another organization to increase profit and globalization.
• Create a new product line to ensure business continuity.
• Downsize the organization to maintain the continuity of the business. | • Director
• CEO |
| Tactical Decision | • Which employees should be let go during downsizing the organization.
• Which employees should be let go during downsizing the organization.
• Which employees should be let go during downsizing the organization. | • Manager |
| Operational Decision | • In addition to face-to-face class, various
• Which employees should be let go during downsizing the organization. | • Employee |
Key Terms in this Chapter
Strategic Decision: A type of decision that has effect over years and even exceed lifetime of the project
Operational Decision: Decisions that are regulated based on the internal and external conditions. Usually this type has influence for no longer than one year.
Fishbone Diagram: A visual tool that identifies many causes of a particular problem.
Quest: A technique able to handle categorical variables and give unbiased feature selection.
Rational Decision: Steps and processes that cover decision-making methods to get the best solution of a problem.
Five Whys Technique: An interrogative and repetitive technique, usually used to inspect the cause-and-effect relationships for a particular problem.
Tactical Decision: A: decision type that has a medium-term impact on a company; it covers the details implementation of the director’s strategy.