Exam 2 Lecture Notes

Exam 2 Lecture Notes - 1 MGT 3200 DECISION-MAKING: PART ONE...

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MGT 3200 DECISION-MAKING: PART ONE I. DECISION-MAKING AND MANAGEMENT Decisions are means to an end rather than ends in themselves. They are organizational mechanisms through an attempt is made to achieve operative goals and overall organizational goals. Decision-making is a key activity at all levels of management. Managers also must make decisions related to all functions of management not only to the planning function. Thus, decision-making techniques are applicable and valuable to all management functions. However, while decision-making is applicable to all management functions, it is most closely associated with the planning function. II. TYPES OF DECISIONS A) Programmed decisions are specific procedures that have been developed for repetitive and routine problems. Thus, decisions are programmed to the extent that they are repetitive and routine, and a specific procedure has been developed for handling them. B) Nonprogrammed decisions are specific to management problems that are novel and unique. They are complex and unstructured. Thus, there is no established procedure for handling them, either because it has not arisen in exactly the same manner before or because is complex or extremely important. Such decisions deserve special treatment. While the two classifications are broad, they point out the importance of differentiating between programmed and nonprogrammed decisions. The management of most organizations faces great numbers of programmed decisions. Such decisions should be treated without expending unnecessary organizational resources on them. On the other hand, nonprogrammed decisions must be properly identified as this is the type of decision that forms the basis for allocating billions of dollars worth of resources a year. Unfortunately, it’s the process involved in this type of decision that we know the least about. Traditionally, programmed decisions have been handled through rules, standard operating procedures, etc… Operational researchers through the development of mathematical models have facilitated the handling of the types of decisions. On the other hand, nonprogrammed decisions have traditionally been handled by general problem-solving processes, judgment, intuition, and creativity. Unfortunately, the advances that modern management techniques made in improving nonprogrammed 1
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decision-making have not been nearly as great as the advances that they have made in programmed decision-making. Ideally, the main concern of top management should be nonprogrammed decisions while 1 st -line management should be concerned with programmed decisions. Middle-level management in most organizations concentrates mostly on programmed decisions, although in some cases they will participate in nonprogrammed decision-making. Obviously, problems arise in organizations where top management expends too much
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Exam 2 Lecture Notes - 1 MGT 3200 DECISION-MAKING: PART ONE...

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