MDQ STEP FOUR AND FIVE: DECISION MATRICES AND FINAL DECISION The purpose of Week 7's Brainstorming Discussion is to Evaluate and Make the Decision by comparing the alternatives based on the objectives. This process is achieved in Step Four by creating two decision matrices - unweighted and weighted. Step Five involves Assessing the Decision Process, which is where Harry will state the final decision and how it fulfills HH’s objectives by examining the MDQ process in how that final decision was derived. 1. Complete the following: o o o o o o o o o Explain the purpose in using decision matrices in Step Four of the MDQ. Use a scale of 0 - 3 to rate the first decision matrix. (0 being does not meet the objective well to 3 being meets the objective well). The decision matrices must have the four objectives and four alternatives from the previous week's discussions. Post the first decision matrix in the text box (unweighted). Do NOT use attachments. Explain WHY and HOW Harry derived the ranking of the objectives and alternatives (each of the individual numbers) in the first matrix. Review the Example using MDQ: Which House Do We Purchase? Use weights that total to 100% for the second decision matrix.Post the second decision matrix in the text box (weighted). Explain WHY and HOW Harry derived each of the weights for the objectives. Based on the results of the Decision Matrices, evaluate and analyze all of HH’s alternatives and objectives. State the final decision by explaining and justifying it with the numbers in the matrix. The final decision is based on the matrices! Discuss Step Five: The Final Decision. Explain HOW the final decision (chosen alternative) fulfilled Hannah's Hat’s objectives. All conclusions, justifications, reasoning's, and explanations must be supported with course material in the form of APA in-text citations (page/paragraph numbers required) and a reference list. CASE STUDY APPLICATION: Create a memo to the internal stakeholders of the company to discuss the decision that you have made regarding moving forward in a way that fixes the financial situation that outlines exactly how you have come to the decision. In your memo, you want to provide specifics, some of which you provided in Week 5: o Triggers for Decision o Decision Statement o Goal of Decision o Purpose, Scope, and Perspective o Four Objectives (Class Consensus) o Alternatives and how they met your objectives o Your decision matrices (weighted and unweighted) and how you chose to weight each criteria Your final decision Make sure that all of your steps make sense with one another and fully align so that your final decision completely lines up with the rest of the steps in the process. The final post must include a variety of sources from the class material as well as the use of scenario or case study facts where appropriate. o o 7/29/2021 Example using MDQ: Which House Do We Purchase? - BMGT 317 6981 Decision Making (2215) Making a Decision on Purchasing a House Using the MDQ Decision Making Model Using a decision making model allows us to objectively make a decision by considering all of the variables. If you want to buy a house, you must figure out what you are looking for in a house before going to a realtor to search for possibilities. With limited time, you would not look at every single house on the market or waste your time looking at houses that do not meet your needs. The decision statement for this decision that needs to be made would be: Which house should we purchase? Objectives need to created. What do you want in this house? What do the other people in my family want in this house? Create a wish list of all the things everyone is looking for in this house. The group of individuals providing input are the stakeholders. The list may have 20 things, which would need to be narrowed down to a reasonable number of objectives (wish list) by deciding what is most important and what sacrifices you are willing to make. Let us narrow it down to six objectives, which is a reasonable number for this example. At least 3 bedrooms At least 2 bathrooms 2 car garage A basement area No more than 5 miles from the elementary school (no school commute for kids) An up-to-date kitchen All of these objectives are measurable because the houses we are considering either have these things or they do not. There are no gray areas or subjectivity as each of these is quantifiable. Even the realtor is clear on what you want. None of those houses have all six of these objectives, which is reason we are trying to decide using the MDQ Model. If one of the houses did have all six objectives, there would be no decision to make nor a need for a decision making model. To buy a house cannot be one of the objectives! Any alternative (all six of the houses) would or should accomplish the objective of buying a house. The decision statement of “which house do we purchase?” already implies you are buying a house. It is obvious you are looking to buy a house based on your decision statement because the decision you are trying to make is which house to buy - not whether you should buy a house. Therefore, to buy a house cannot be one of the objectives, because all alternatives will presumably satisfy this objective. You should not create an alternative that does not satisfy buying a house. If you do, that means you applied the model incorrectly or misunderstood your decision statement. This is the reason in this course students spend four weeks on the MDQ. You need to go step by step, understanding the reasons for the decision statement and specific objectives. After justifying the objectives, you need to create a list of alternatives that will be used to accomplish the objectives. Brainstorm, research online, ask the realtor for applicable listings (houses that have some of your objectives) and go see some of these houses. In considering many alternatives, you decide to narrow down six possible alternatives (houses with street addresses or nicknames such as 123 Main Street, 456 Clark Road, etc.) to choose from and apply to the MDQ model. https://learn.umgc.edu/d2l/le/content/582311/viewContent/21886414/View 1/4 7/29/2021 Example using MDQ: Which House Do We Purchase? - BMGT 317 6981 Decision Making (2215) Once you know your objectives and alternatives, it is time to create the decision matrices. The first decision matrix would include six objectives and six alternatives. That would be a reasonable decision matrix to use in evaluating the situation. The complexity in having six objectives and six alternatives is the reason you are using the decision making model. In creating the first matrix, rate each of the alternatives against each of the objectives in terms of their importance. In other words, come up with numbers for each of the boxes in the first matrix. Only the decision maker knows how or why an objective was rated with a specific number for each of the alternatives. Your logic as the decision maker may vary from a different decision maker. This is the reason in your project you have to explain how the numbers were derived and support them so that your logic is clear to someone looking at the matrices. Matrices are not self-explanatory. For example (first decision matrix table), using a scale of 0 – 3, you would rank 123 Main Street (alternative) to at least 3 bedrooms (objective). How well does 123 Main Street meet the objective of at least 3 bedrooms? 123 Main Street has 4 bedrooms. Therefore, you might rate it as a “3” and in your explanation express the fact you gave it this ranking because the house has 4 bedrooms. This house meets the objective very well because it has one additional bedroom beyond what the wish was and it more than satisfies the family. Nothing is considered obvious in the decision matrix because the table creator is the one doing the analysis. For your project, you are required to provide support and detailed explanations by using the case study facts, course material and additional research. The same process is used in creating the weights for the second matrix. The second matrix uses weights. What if I cannot find a house that meets every objective? Most likely this will happen to you. Which objectives are more critical than the others? For example, if the kids are starting elementary school, that objective may be more significant at this time than if they were in their last year of high school. Out of the six objectives, you may give the elementary school a weight of 30%, because this is most important to you. Similarly, bathrooms 20%, bedrooms 20%, basement 15%, kitchen 5%, and 2 car garage 10%. Why? This is the part you have to explain in great detail. Each of those associated weights/percentages must be explained, justified, and supported based on facts , course articles, additional research, and MDQ application process. Once you have completed this entire process, examine both matrices, to see what the final decision is for the decision that needs to be made. Based on the results, you would justify how the chosen alternative meets more of the objectives than the other alternatives. The matrices dictate the final decision, which is based on the final numbers. Step-by-Step Application: Decision statement is "Which house do we purchase". Objectives: What do you want or desire? 3 Bedrooms, 2 Bathrooms, 2 Car Garage, Basement, School Distance, Up to date Kitchen Alternatives: How will you accomplish what you want in terms of what houses are you considering of purchasing? 123 Main Street, 456 Clark Road, etc….. Decision Matrices Matrix One (unweighted): The resulting table (with the first house you visited scored): First Decision Matrix House 3 BR 2 Baths 2 car garage https://learn.umgc.edu/d2l/le/content/582311/viewContent/21886414/View Basement School Dx Kitchen Total Value 2/4 7/29/2021 Example using MDQ: Which House Do We Purchase? - BMGT 317 6981 Decision Making (2215) 123 Main St 3 2 0 1 2 1 9 456 Clark Rd 3rd Alternative 4th Alternative 5th Alternative 6th Alternative For your project, you will need to explain each of the numbers in the first decision matrix by supporting how you logically scored each box. For example, the numbers showing in the first row for 123 Main Street – 3,2,0,1,2,1 – all have to be explained individually. The same will be required for 456 Clark Road, 3rd alternative, and so on. Now you are going to add the WEIGHTS you have decided on for each of these six objectives: Total of the weights should equal 100%. Matrix Two (weighted): House 3 BR 2 Baths 2 car garage Basement School Dx Kitchen Total Value 123 Main St 3 x 20% 2 x 20% 0 x 10% 1 x 15% 2 x 30% 1 x 5% 1.8 456 Clark Rd 3rd Alternative 4th Alternative 5th Alternative 6th Alternative The first number is the value of that factor for a specific house based on the first matrix. The second number is the weight you have assigned that factor (its importance in %). Multiply the two numbers. Put the total at the end of each row. https://learn.umgc.edu/d2l/le/content/582311/viewContent/21886414/View 3/4 7/29/2021 Example using MDQ: Which House Do We Purchase? - BMGT 317 6981 Decision Making (2215) Fill in the value for each of six houses you visit, and the highest score is the one you should buy. Why? Because the numbers in the table dictate which alternative satisfies as many of your objectives, based on your importance of each objective. This same thought process and application of the MDQ will be used in deciding which alternative to choose (the final decision). https://learn.umgc.edu/d2l/le/content/582311/viewContent/21886414/View 4/4 7/29/2021 Hannah's Hats Case Study - BMGT 317 6981 Decision Making (2215) Brainstorming Case Study - Hannah's Hats Purpose Throughout this course, you will be using this case study to make a strategic business decision. Harry Hannah needs to make to keep his hat sales growing. The purpose of these brainstorming exercises is to develop the critical thinking and decision making skills necessary to make a contemporary business decision. Along with critical thinking skills, you will develop research, communication and data evaluation skills. Outcomes you will meet by completing the brainstorming exercises: Applies the basic steps of the MDQ model to make a sound business decision Describes and explains the reasoning behind the application steps used and the ultimate decision Demonstrates the use of collaboration to help determine the final decision Analyzes, evaluates and explains both the decision factors in making the decision as well as the stakeholders involved CASE STUDY Hannah's Hats is an online children’s hat retailer with a brickand-mortar store in Chicago, Illinois. The company has 27 employees and was founded by Harry Hannah in 2015. At that time, Hannah was a single father of 3-year-old twin boys. After five years, sales were $1 million. The company topped $7 million in sales after the winter of 2020. Hannah’s Story Working as a freelance children’s clothing buyer, Harry could work from home and be a stay at home dad to his twins, Harry, Jr. and Harold. This was important to him and to his wife, Harriet, a software designer whose job involved a great deal of travel. However, on one cold night in November, Harry was contacted by local police who informed him that his wife had been killed in an auto accident. She was returning home after seeing a client in the Chicago suburb of Arlington Heights. Devastated by the news, Harry did everything he could to keep himself together for the kids. He needed help; he decided to send them to day care three days a week so he could deal with getting his new life together. Every day Harry noticed the caretakers trying to find the children's hats and mittens when he came to take the boys home. Harry noticed that many of the children had mitten clips that seemed to help reduce the number of lost mittens. The hats, however, were another matter. https://learn.umgc.edu/d2l/le/content/582311/viewContent/21886411/View 1/3 7/29/2021 Hannah's Hats Case Study - BMGT 317 6981 Decision Making (2215) Chicago winters are exceptionally bad for children because the wind whips across Lake Michigan and freezes every part of the face that has moisture, especially the mouth. While many of the children’s coats had attached hoods, this was not enough. Parents used wool scarfs tied around the children’s faces (below the eyes) to stop the painful feeling of the cold. The scarves were awkward and bulky for the children who often pulled them off or dropped them in their travels. Harry decided to design a hat that could be attached with Velcro onto a coat hood or a coat collar and designed to fit closely around the mouth, nose, ears, and eyes of a child just like a ski mask. The hat could be easily attachable relegating the need for scarves to the past. Harry knew the hat could come in a variety of colors and have various child-friendly designs. Several months passed. Harry discovered that payments from Harriet’s workmen’s compensation and her life insurance would provide him and the children some financial freedom for years if invested wisely. Harry thought a better way to change his family’s life would be to invest some portion of the money in his hat idea. Founded as a small storefront shop near Marshall Fields, Hannah’s Hats also developed a loyal following online. Through its creative use of social media, sales took off. Harry expanded his product line to include matching winter gloves and socks. Beginning in the fall of 2017, Harry, flushed with success from his children’s hats, decided that the design could be adapted to work for adults as well. The company invested $150,000 in new designs and inventory for attachable hats for adults. By offering seasonal products for the whole family, Harry thought Hannah’s Hats would double their sales in three to five years. With visions of becoming a destination store like LL Bean’s flagship store, Hannah’s Hats moved from its old store near Marshall Fields to a large space on the Navy Pier. This cost Hannah’s Hats $25,000. Harry also moved the warehouse from a 10,000 sq. ft. space near the old store to a 20,000 sq. ft. space closer to his home in Arlington Heights. This location was considerably further from the store. As the boys grew older, Harry left most of the work to his staff. He set out to increase the sales through travel and spent most of his time marketing products through several marketing channels. He was determined to have his hats available to every possible cold weather clothes customer. He introduced numerous marketing initiatives, including a partnership with Blizzard Relief, an organization intended to increase awareness of the clothing needs of the homeless during massive cold weather storms. To sustain these efforts, Hannah’s Hats bulked up its marketing staff that consisted of Hannah and three of the employees who worked in the warehouse. Gradually, the marketing team grew to 5 full-time employees. Additionally, Hannah hired an IT person to handle the online sales. From 2017 to 2019, Hannah’s Hats grew at an annual rate of 35 percent. Hannah’s talks and marketing pitches to large retailers attracted the attention of two investors. The investors told Hannah that with their help they could grow the company to be a $75 million dollar business. Hannah began to think bigger, “If the investors think they can grow Hannah’s Hats to be a $75 million-dollar business, why can’t I”? This goal became his new objective. Hannah doubled his marketing trips and went after Walmart and Target to broaden his customer base. Although both companies liked his product, they felt that a cheaper version was needed to meet their target customers. Hannah continued his heavy marketing plan but despite his effort sales began to flatten. Expenses grew higher, especially with the adult hats. Hannah knew he had to change his plan fast or they would be in trouble. He sought expert help to gain some idea of his company’s current position. The following conclusions were reported to Hannah. Finances: The rate of overall sales growth had declined from 35% annually to 25%. The children’s hats had increased sales by 11% over the last year. Adult hat sales had dropped by 22% over the last year. The company was still growing but at a slower rate. https://learn.umgc.edu/d2l/le/content/582311/viewContent/21886411/View 2/3 7/29/2021 Hannah's Hats Case Study - BMGT 317 6981 Decision Making (2215) Operational expenses for the company had increased by 8% last year. Much of which was due to increased advertising in a more expensive mode (5% and increased operational expenses with the new location and warehouse taking up rest). E-sales were up by 25% with sales of children’s and adult hats being about equal. Opportunities: Investor interest E-commerce growth Big store interest if a cheaper line were developed New product line for Summer Threats: LL Bean entering the children’s market with a similar product Chinese e-commerce competition with a cheap line Hannah reviewed the report and instinctively knew that he had to restructure his growth plans. A decision had to be made that would position Hannah’s Hats for better growth potential. Using the information in this case study and the MDQ model, help Hannah make his decision and position his business for future growth. https://learn.umgc.edu/d2l/le/content/582311/viewContent/21886411/View 3/3 7/28/2021 Week 7 Lecture and Readings - BMGT 317 6981 Decision Making (2215) Week 7: Applying Step 4 - Evaluating the Alternatives and Making the Decision Introduction: Weighting and Ranking the Alternatives Applying Sound Reasoning Skill #9: Applying the Decision Matrix Tool to Evaluate the Alternatives and Make the Best Choice In step four the decision alternatives have been created and now we have to evaluate the choices to see which one best fits the objectives of the decision maker(s). Right now if you are thinking of the car example you are being blinded by the fancy SUV that is over the budget. You really want that one and you can afford it if you go for the car pool idea (bias). However, you know that if you go through the rest of the process you may find that there is a better option. You need a little objectivity right now. It is time for the Decision Matrix. Evaluate and Make Decision Evaluate and make a decision by comparing the alternatives based on information and values (which objective is most important to you. Ask yourself which is best for me and those I care about, if this is a personal decision, or what is best for the business or organization? Before deciding, rate the alternatives on the elements or objectives. Use the Decision Matrix to help in this part of the evaluation process. Here is an example to get you started. Refer to Which House Do We Purchase. Decision statement: Which House Do We Purchase? Objectives: What do you want or desire? 3 Bedrooms, 2 Bathrooms, 2 Car Garage, Basement, School Distance, Up-to-date Kitchen Alternatives: How will you accomplish what you want in terms of what houses you are considering purchasing? 123 Main Street, 456 Clark Road, etc….. Decision Matrices Matrix One (unweighted): The resulting table (with the first house you visited scored): First Decision Matrix House 3 BR 2 Baths 2 car garage 123 Main St 3 2 0 Basement School Dx 1 2 Kitchen Total Value 1 9 456 Clark Rd 3rd Alternative 4th Alternative 5th Alternative 6th Alternative In your response to this week you will need to explain each of the numbers in the first decision matrix by supporting how you logically scored each box. For example, the numbers showing in the first row for 123 Main Street – 3,2,0,1,2,1 – all have to be explained individually. The same will be required for 456 Clark Road, 3rd alternative, and so on. Now you are going to add the WEIGHTS you have decided on for each of these six objectives: Total of the weights should equal 100%. Matrix Two (weighted) House 123 Main St 3 BR 2 Baths 2 car garage 3 x 20% 2 x 20% 0 x 10% Basement School Dx 1 x 15% 2 x 30% Kitchen Total Value 1 x 5% 1.8 456 Clark Rd 3rd Alternative 4th Alternative https://learn.umgc.edu/d2l/le/content/582311/viewContent/21886444/View 1/2 7/28/2021 Week 7 Lecture and Readings - BMGT 317 6981 Decision Making (2215) 5th Alternative 6th Alternative The first number is the value of that factor for a specific house based on the first matrix. The second number is the weight you have assigned that factor (its importance in %). Multiply the two numbers. Put the total at the end of each row. Fill in the value for each of six houses you visit, and the highest score is the one you should buy. Why? Because the numbers in the table dictate which alternative satisfies as many of your objectives, based on your importance of each objective. This same thought process and application of the MDQ will be used for Project 1, in deciding which alternative Hannah should choose (the final decision). Improve Are their gaps in the quality of the decision? Do you see areas that you are uncertain of or believe lack enough information? Repeat the process after filling in the gaps to see if the choice is 100% what you want from the decision. (Decision Quality Model, 2007) Your total scores will suggest the best alternative and your decision. Assessing the Effectiveness of the Choice by Seeing How it Worked in Implementation Skill #10: Assess the decision choice made from the matrix results. After a decision has been made and implemented, it is important to assess the outcome(s) and process used to derive the decision. Assessing confirms if the alternative chosen led to the desired outcomes. Appraising the Decision Process Assessing the process by which a decision was made is also effective. Often lessons can be learned that benefit the future. Here are a few areas that demonstrate the need for examination of the process: Examining areas like risk and uncertainty in the context of the decision results can help review the success of the decision maker in dealing with the process. If estimates were off or if emotions played too big a part of the decision, then the decision maker can make adjustments in the future or find better tools to help minimize mistakes in future results. If the decision was made by a group, having a conversation with all participants is worthwhile because the members can reflect on how the process affected the outcome. For instance, did a few members insist on doing things their way when it turned out to be ineffective? In the future the group membership, or perhaps the leader should be changed. Whether enough information was gathered and whether its quality was high enough are two questions that should be considered. Were the decision tools used effective? Could other tools have been more effective in collecting or evaluating data? Finally, it is important to question whether all the relevant parties contributed information and knowledge needed for the decision, and whether everyone who should have been involved was given the chance to participate. Evaluating Outcomes After the Decision Has Been Implemented The objective of evaluating outcomes is for the decision maker to develop an understanding of the ramifications of his or her choices. Many of the lessons developed in this stage come out of examining the implications of the decision. How and who did the decision affect and why? One can also consider whether a decision had the desired effect. For example, a decision to hold additional training seminars may have been intended to make it more convenient for people to learn a new technology. However, if overall attendance did not increase, then the decision may not have addressed the underlying cause of why people did not go to training events. Once the outcome of a decision is known, the results may imply a need to revise the decision and try again. When decision outcomes are not clearly measurable or have ambiguous results—some parts good, some bad—is not uncommon for people to emphasize the favorable data and discount the negative. Maintaining self-esteem also may cause decision makers to attribute good outcomes to their actions and bad outcomes to factors outside their control. This type of bias can limit an honest assessment of what went right and what didn’t, and thus reduce what can be learned by carefully evaluating outcomes. Read: Measuring Decision Effectiveness Three Steps to Building a Decision Matrix View: Evaluating the Alternatives Applying Sound Reasoning Episode 15 This introduction was adapted from the following source: B. (n.d.). Boundless Management. https://courses.lumenlearning.com/boundlessmanagement/chapter/decision-making-process/ https://learn.umgc.edu/d2l/le/content/582311/viewContent/21886444/View 2/2 
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