ch 3and4

ch 3and4 - 5/21/10 Chapter 3: Decision M ak ing P rocess...

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5/21/10 Chapter 3: Decision Making Process Decisions – a choice among competing alternatives and the implementation of the chosen alternative o Time frame Strategic – long term Non-programmed, systematic and can be proactive and reactive Translate the vision into reality Tries to reduce the risk of starting a business or a new product Mintzburg (1973) o Entrepreneurial decisions Made with a high degree of uncertainty o Adaptive decisions Reactive responses to environmental conditions Ex. The kindle – Amazon then Ipad - Apple o Planning decisions Proactive and reactive decision at the same time New product and new business Tactical – objectives, plan we use to put long term effects into play o Certain amount of info 3 situations Certainty – all the information that we need, no surprises Uncertainty – outcome is uncertain 1
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Risk – some idea of probability of outcome, not 100% o Process – steps leading to: action outcome assessment Types of managerial decisions o Programmed vs. non-programmed Herbert Simon Programmed If you know that X will happen, Y will follow Know exactly what’s going to happen Best used on repetitive types of activity Procedures in place that can handle if something goes wrong Non programmed Strategic If X happens we don’t know what will follow Unique situations Have to do this with some risks or uncertainty o Proactive vs. reactive Proactive See something that needs to be done and do it before it needs to be Saves time and money A game plan Reactive Done in response to something else Done after things have blown up in our face 2
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Loses time and money Some think you can make a proactive and a reactive decision at the same time Introduce a new product using new machinery (new machinery – proactive, reactive – don’t know outcome) o Intuitive vs. systematic Intuitive We guess, gut feeling Based on prior experience Can be biased Systematic Very complex logical Cost a lot of money, long Have to go through certain process o Develop clear set of objectives o Gather relevant information o Come up with rational and creative alternative solutions
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This note was uploaded on 06/02/2010 for the course MGMT 3200 taught by Professor Sauley during the Spring '10 term at LSU.

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ch 3and4 - 5/21/10 Chapter 3: Decision M ak ing P rocess...

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