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Management Lecture Ch 7_5th Ed

Management Lecture Ch 7_5th Ed - CHAPTER SEVEN DECISION...

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CHAPTER SEVEN DECISION MAKING, LEARNING, CREATIVITY, AND ENTREPRENEURSHIP OVERVIEW OF THE CHAPTER In this chapter, we examine how managers make decisions and explore how individual, group, and organizational factors affect the quality of the decisions they make. We discuss the nature of managerial decision-making and examine some models of the decision-making process that help reveal its complexities. The main steps of the decision-making process and the biases that may cause capable managers to make poor decisions are explored. Also, how managers can promote organizational learning and creativity and improve the quality of decision making throughout an organization is explored. Finally, the role of both the entrepreneur and the intrapreneur are examined. LEARNING OBJECTIVES 1. Differentiate between programmed and nonprogrammed decisions, and explain why nonprogrammed decision-making is a complex, uncertain process. 2. Describe the six steps that managers should take to make the best decisions. 3. Explain how cognitive biases can affect decision-making and lead managers to make poor decisions. 4. Identify the advantages and disadvantages of group decision-making, and describe techniques that can improve it. 5. Explain the role that organizational learning and creativity play in helping managers to improve their decisions . 6. Describe how managers can encourage and promote entrepreneurship to create a learning organization and differentiate between entrepreneurs and intrapreneurs A MANAGER’S CHALLENGE: DECISION MAKING AND LEARNING ARE THE KEY TO ENTREPRENEURIAL PROCESS Marc Shuman is the founder and president of GarageTek, a company that designs and installs custom garage systems to organize and maximize storage capacity in home garages. Decision making has been an ongoing challenge for him. Favorable environmental conditions led him to believe that consumer demand existed for his product. He later decided to franchise his idea and within three years, GarageTek had 57 franchises in 33 states. However, Shuman faced another tough decision when he realized that some of the franchises were failing. Although his franchise agreement gave him the right to close them, he decided to give the troubled franchisees six months to get back on their feet. Shuman learned from this experience and now has tougher Jones, Contemporary Management, Fifth Edition 145
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CHAPTER SEVEN DECISION MAKING, LEARNING, CREATIVITY, AND ENTREPRENEURSHIP criteria in place for accepting new franchisees. He also decided to track franchise performance more closely so that potential problems can be quickly identified and solved. LECTURE OUTLINE I. THE NATURE OF MANAGERIAL DECISION MAKING Decision making is the process by which managers respond to the opportunities and threats that confront them by analyzing the options and making determinations, or decisions about specific organizational goals and courses of action.
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