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The Decision-Making Process

The Decision-Making Process. The Decision Making Process. Step One. Define the Problem. Step One—Define the problem. Problem a situation that raises a question in one’s mind or causes a person to be uncertain Problems often demand decision or action taking

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The Decision-Making Process

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  1. The Decision-Making Process

  2. The Decision Making Process

  3. Step One Define the Problem

  4. Step One—Define the problem • Problem • a situation that raises a question in one’s mind or causes a person to be uncertain • Problems often demand decision or action taking • You MUST define the problem in order to make a decision that will lead to its solution

  5. Step One—Define the problem • Scarcity • Condition of not being able to have everything we want • Results when our wants exceed our ability to satisfy them • Unlimited wants; limited resources • Examples: • Natural resources • Time • Skill • Knowledge • Tools • Materials, etc.

  6. Step Two Explore the alternatives

  7. Step Two—Explore the alternatives • Choice • A decision, the act of deciding • Could be many choices or only two or three • Alternative • One of two or more options that can be selected • Important: consider ALL the alternatives in making a decision

  8. Step Three Consider the Consequences

  9. Step Three—Consider the Consequences • Incentive • Something that encourages or persuades a person to act • Also called advantage or “pros” • Example: high pay is usually a job incentive • Disincentive • Something that discourages or dissuades a person from acting • Also called disadvantage or “cons” • Example: midnight to 7 a.m. shift • Suggestion • If possible, write down choices and list advantages and disadvantages • Be sure of your choices before the next step

  10. Step Four Identify your Values

  11. Step Four—identify your values • Difficult step • Select from your choices—the one YOU believe will be the best for you and your interests at this particular time • Value • Something a person considers important which is supported by a set of beliefs • Noneconomic (doesn’t involve money) • Values and beliefs influence our decisions

  12. Step Four—identify your values • All choices we make result in benefits and costs • Benefits/Cost Analysis • Rational comparison of the value gained (benefit) and the value of what must be given up (cost) when a choice is made • Opportunity Cost • The highest valued alternative that must be given up when another option is chosen • Two alternatives; choose one, opportunity cost is the one given up (not sum of ALL other alternatives)

  13. Step Five Decide & Act on Your Choice

  14. Step Five—Act on Your Choice • Take action step • Enjoy your choice!

  15. Step Six Evaluate the results

  16. Step Six • Was your decision a good one? • Did your decision give you satisfaction? • What was right about it? • What was wrong about it? • Did you evaluate your choices thoroughly? • If you had to do it over again, would you make the same choice? • Did you miss a choice that might have been a better alternative? • Learn from your decisions!

  17. Summary

  18. Summary • Situations occur in life that require decision making • Often, those decision are related to SCARCITY • Usually, there is more than one ALTERNATIVE to choose from • There is usually more than one VALUE to guide your decision

  19. Summary • You have the power to make choices in scarcity situations • our values influence our choices • Each of us has different INCENTIVES and DISINCENTIVES that influence our actions

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