Chap006 - Chapter 6 Decision Making Chapter Overview Our focus in Part 3 is on Management Strategy and Decision Making Planning and the formulation

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Chapter 6 Decision Making Chapter Overview Our focus in Part 3 is on Management Strategy and Decision Making. Planning and the formulation of strategy establish broad objectives for an organization so that manager scan set priorities and deadlines and marshal resources to accomplish short and long-term goals. In Chapter 5 we explored managing the planning process. We will explore the topic of decision making in this chapter. Planning (Chapter 5) and decision making run parallel to one another and managers should incorporate both when trying to establish a strategic direction for their firm. Decision making is the process of identifying problems and opportunities and resolving them, as individual employees, teams, and managers. A programmed decision has established routines and procedures for resolving the issue; a non-programmed decision occurs in a unique situation where no previously established routines or procedures apply. Management decisions are made under conditions of uncertainty and risk. When there are opposing goals, scarce resources, or differences of opinion regarding priorities, management decision making is often characterized by conflict. Decisions are made at strategic, tactical, and operational levels. The six stages of decision making are: (1) identifying and diagnosing the problem; (2) generating alternative solutions; (3) evaluating alternatives; (4) selecting the best alternative(s); (5) implementing the decision; and (6) evaluating the decision. Criteria used to evaluate and select alternatives should include quality and acceptance. Optimizing is finding the best alternative. Satisficing is selecting the first alternative that meets a minimum criterion. Some of the factors that limit decision making quality include: (1) organizational politics, (2) emotions and personal preferences, (3) the illusion of control, (4) intuition, and (5) escalation of commitment to a failing course of action. Group decisions share the advantages of increased acceptance, pooling of knowledge and differing perspectives, and other benefits, if problems of undue social pressure, minority domination, politics, and groupthink can be avoided. Effective leaders facilitate quality group decision making processes. To stimulate creativity, brainstorming, storyboarding, the nominal group technique, and the Delphi technique may help. Also, effective time management skills, delegation, and proactive decision making can lead to quality decisions. Following this chapter on decision making, we will explore the topic of strategic management in Chapter 7. Gomez-Mejia, Management, Third Edition 1
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Chapter 6 Decision Making Learning Objectives (PPT 2) 1. Recognize the nature of management decisions: programmability, uncertainty, risk, conflict, decision scope, and crisis situations. 2.
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This note was uploaded on 10/11/2010 for the course MNGT 5000 taught by Professor Jones during the Fall '10 term at Webster University Geneva.

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Chap006 - Chapter 6 Decision Making Chapter Overview Our focus in Part 3 is on Management Strategy and Decision Making Planning and the formulation

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