Class 16 Decision Making

Class 16 Decision Making - Decision Making Chapter 6...

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Unformatted text preview: Decision Making Chapter 6 Chapter 6 Decision Making Criteria – Write these down Decision Making Criteria – Write these down Identify the problem Establish the decision making criteria Allocate weights to the decision making criteria List alternatives Analyze alternatives Choose an alternative Implement the decision Evaluate the decision Decision Making Simulation Decision Making Simulation Critical Thinking Companies want “thinkers”, Companies want “thinkers”, problem solvers, innovators…not just “doers” Understand current events and current How do you become a How do you become a “thinker”? business events (Wall Street Journal) Be curious…ask why Learn your business…P & L, Operations… know how all the parts work…not just your part Critical Thinking Critical Thinking Inference – The reasoning involved in drawing conclusions from evidence or known information Recognition of Assumptions – The ability to recognize statements or information that have been assumed to be true or taken for granted Deduction – A type of inference that reasons from general premises to specific conclusions Interpretation – The meaning or significance of a collection of facts Evaluation of Arguments – The ability to judge the strength of an argument based on logical criteria Inference Inference The reasoning involved in drawing conclusions from evidence or known information – High labor costs equals either low productivity, high wages, or overtime Recognition of Assumptions Recognition of Assumptions The ability to recognize statements or information that have been assumed to be true or taken for granted – Hosting sales versus complex sales Deduction Deduction From general premise to specific conclusion – “Our hiring managers keep rejecting the candidates we send them” Interpretation Interpretation The meaning or significance of a collection of facts. – Number of prospecting calls – Number of appointments – Number of presentations – Number of closes Evaluation of Arguments Evaluation of Arguments The ability to judge the strength of an argument based on logical criteria – “I need more people to answer the phones” Decision Making Criteria – A Business Case Decision Making Criteria – A Business Case Identify the problem Establish the decision making criteria Allocate weights to the decision making criteria List alternatives Analyze alternatives Choose an alternative Implement the decision Evaluate the decision You have just become a new supervisor… You have just become a new supervisor… You have a team of 5 people and you are a marketing manager Your boss says there are a lot of marketing programs that need to be developed but the budget is very tight right now What is your next step? Next step… Next step… You review the budget and you talk with your team You identify that printing costs seem to be high based on the amount of promotional items that have been produced Your team tells you that if you could spend $50,000 more on advertising this year it would drive an additional (incremental) $500,000 in sales What should you do now? Next step… Next step… Go to your boss to clarify his/her thoughts in order to firm up the decision making criteria What would you ask him/her? The boss says sales is most important, The boss says sales is most important, but your team hasn’t been able to grow new sales so you must cut costs. What is your decision making What is your decision making criteria? Decision Making Criteria Decision Making Criteria Costs New Programs New Sales What weight would you give each? Decision Making Criteria Decision Making Criteria Costs ­ 6 New Programs ­ 8 New Sales ­ 10 What weight would you give each? What are your alternatives? What are your alternatives? Alternatives Alternatives Cut your budget and cut your programs Keep budget and programs the same Increase your budget and increase sales Keep your budget the same but improve your programs Find a less expensive printer and cut costs and keep programs the same Alternatives (costs 6, programs 8, sales 10) Alternatives Cut your budget and cut your programs (cost 10, programs 1, new sales 1) Keep budget and programs the same (cost 5, programs 4, sales 4) Increase your budget and increase sales (cost 1, programs 7, sales 10) Keep your budget the same but improve your programs and sales (cost 5, programs 5, sales 8) Find a less expensive printer and cut costs but keep programs the same (cost 10, programs 4, sales 4) Alternatives (costs 6, programs 8, sales 10) Alternatives Cut your budget and cut your programs (cost 10, programs 1, new sales 1) – 78 score Keep budget and programs the same (cost 5, programs 4, sales 4) – 102 score Increase your budget and increase sales (cost 1, programs 7, sales 10) – score 162 Keep your budget the same but improve your programs and sales slightly (cost 5, programs 5, sales 8) – score 150 Find a less expensive printer and cut costs but keep programs the same (cost 10, programs 4, sales 4) – score 132 Thinking “Traps” in Decision Thinking “Traps” in Decision Making Framing Framing Being overly influenced by how a problem is explained or seen We don’t need to meet as a group and build a cohesive team prior to starting work on the project as we are all too busy. Confirming Evidence Confirming Evidence Selectively seeking out information that supports your point of view We have some students that work and some that live off campus. We can do most of this remotely don’t you think? Yeah…that stuff the professor said about the steps for building high performing teams…it’s not that important. We won’t go through the “storming” phase. We’ll go right to norming and performing. We’ll be fine. Anchoring Anchoring Giving too much value to the first piece of information received I learned when I first came to campus you can usually start assignments within a week to a few days of the due date and still be fine. So even though the professor warned us, several times, well in advance that we should test the Webex technology out and get comfortable with it early, we were confident we could figure it out the day before it was due. Status Quo Status Quo Favoring decisions that perpetuate the current situation When I am done for the day I have a routine where I eat, I study and then I relax. It would break the status quo to check the CSPD internship postings or spend 15 minutes practicing development of my business vocabulary. Sunk Costs Sunk Costs Making choices that justify flawed past decisions I messed up early with my grades and I only have a 2.4 so there is no reason to work too hard now as a 3.0 is impossible. Decision Making Continuum Decision Making Continuum Ownership/Cross Functionality Ownership/Cross Functionality WSJ Quiz WSJ Quiz WalMarts Core Customer comes from households WalMarts Core Customer comes from households earning 1. 2. 3. 4. $40,000 to $80,000 a year $30,000 to $70,000 a year $10,000 a month $50,000 to $100,000 a year 25% 25% 25% 25% 1 2 3 4 WalMart has a strategy to try and drive “one stop WalMart has a strategy to try and drive “one stop shopping”, what economic trend is mentioned that can boost sales for WalMart given this strategy? 1. 2. 3. 4. Falling soy bean prices Falling gas prices Rising gas prices Improved corporate profit margins 25% 25% 25% 25% 1 2 3 4 What career is Anthony Robles considering based What career is Anthony Robles considering based on the article? 1. 2. 3. 4. Professional wrestling TV sports announcer Wrestling coach Motivational speaker 25% 25% 25% 25% 1 2 3 4 Web shows can cost as little as ______ for a 43 Web shows can cost as little as ______ for a 43 minute show before talent costs. 1. 2. 3. 4. $100,000 500,000 $900,000 $75,000 25% 25% 25% 25% 1 2 3 4 The average web video watcher spent 4 hours and The average web video watcher spent 4 hours and 39 minutes watching internet video in January which is up what percent from a year ago? 1. 2. 3. 4. 10% 25% 40% 45% 25% 25% 25% 25% 1 2 3 4 ...
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This note was uploaded on 04/08/2011 for the course HRM 1101 taught by Professor Nelson during the Spring '08 term at Temple.

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