Chapter 6 The Decision Making Process

Chapter 6 The Decision Making Process - Chapter 6: Decision...

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Chapter 6: Decision Making: The Essence of the Manager’s Job The Decision Making Process Decisions – A choice form two or more alternatives - Managers at all levels and in all areas of organization make decisions, they make choices - Top level managers o Decisions about their organization’s goal o where to locate new facilities o what new market to move into o what products or services to offer - Middle and lower managers o Decisions about production schedule o Quality problems o Pay raises o Employee discipline - All organizational members make decisions that affect their jobs and the organization they work for. - Decision making is a comprehensive process not just a simple act of choosing among alternatives Decision making process – A set of eight steps that include identifying a problem, selecting an alternative, and evaluating the decision’s effectiveness - Developing - Analyzing - Selecting alternatives that can resolve the problem - Implements the alternative - Concludes with evaluating the decision’s effectiveness Identification of a problem Identification of decision criteria Allocation of weights to criteria Development of alternatives Analysis of alternatives Selection of an alternative Implementation of the alternative -> -> -> -> -> -> V Evaluation of decision effectiveness ^ ------------------------------------------------------------------------------------------------------------ < V Step 1: Identifying the Problem - The decision making process begins with the existence of a problem - Problem – A discrepancy between an existing and a desired state of affairs - If conditions aren’t what they should be or what managers would like them to be, then a problem (discrepancy) exists o But that’s not enough to make a problem A problem without pressure to act, is a problem postponed To trigger the decision process, the problem must put pressure on the manager to act Problems can come from deadlines, financial crisis, competitor actions, customer complaints, expectations from boss, organization polices, or an upcoming performance evaluation 1/9
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Chapter 6: Decision Making: The Essence of the Manager’s Job Step 2: Identifying Decision Criteria - Once a manager identifies a problem, the decision criteria important to resolving the problem must be identified - Decision criteria – Criteria that define what’s relevant in a decision - Every decision maker has criteria that guide his or her decisions Step 3: Allocating Weights to the Criteria - If the relevant criteria aren’t equally important, the decision maker must weight the items in order to give them the correct priority in the decision - 10 would be twice as important as a 5 Step 4: Developing Alternatives - Requires decision makers to list viable alternatives that could resolve the problem - This step is where decision makers want to be creative in coming up with possible alternatives Step 5: Analyzing Alternatives - Once alternatives have been identified , the decision maker must analyze each one
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This note was uploaded on 04/08/2010 for the course BUS mgmt340 taught by Professor Tompson during the Spring '10 term at University of Illinois, Urbana Champaign.

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Chapter 6 The Decision Making Process - Chapter 6: Decision...

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