Managerial Decision Making

Managerial Decision Making - Managerial Decision Making...

Info iconThis preview shows pages 1–9. Sign up to view the full content.

View Full Document Right Arrow Icon
Managerial Decision Making Chapter 9
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Types of Decisions and Problems:Programmed and Nonprogrammed Decisions Programmed decision – a decision made in response to a situation that has occurred often enough to enable decision rules to be developed and applied in the future. Nonprogrammed decision – a decision made in response to a situation that is unique, is poorly defined and largely unstructured , and has important consequences for the organization / Decisions to build a new factory, develop a new product or service, enter a new geographical market,etc./
Background image of page 2
Certainty, Risk, Uncertainty, Ambiguity Every decision situation can be organized on a scale according to the availability of information and the possibility of failure. The four positions on the scale are certainty, risk, uncertainty, and ambiguity. Whereas programmed decisions can be made in situations involving certainty, many situations that managers deal with every day involve at least some degree of uncertainty and require nonprogrammed decision making.
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Certainty, Risk, Uncertainty, Ambiguity Certainty - all the information the decision maker is fully available. Risk – a decision has clear-cut goals, and good information is available, but the future outcomes associated with each alternative are subject to chance. Uncertainty – Managers know what goal they wish to achieve, but information about alternatives and future events is incomplete. Ambiguity – the goals to be achieved or the problem to be solved is unclear, alternatives are difficult to define, and information about outcomes is unavailable
Background image of page 4
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Decision-Making Models Classical model – a decision-making model based on the assumption that managers should make logical decisions that will be in the organization’s best economic interests. The classical model is considered to be normative , which means it defines how a decision maker should make decisions and provides guidelines for reaching an ideal outcome for the organization
Background image of page 6
Decision-Making Models Administrative Model – a decision-making model that describes how managers actually make decisions in situations characterized by nonprogrammed decisions, uncertainty, and ambiguity. Bounded rationality – the concept that people have the time and cognitive ability to process only a limited amount of information on which to base decisions. Satisficing means that decision makers choose the first solution alternative that satisfies minimal decision criteria. Intuition – the immediate comprehension of a decision situation based on past experience but without conscious thought.
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Political Model The third model of decision making is useful for making nonprogrammed decisions when conditions are uncertain, information is limited, and there is disagreement among managers about what goals to pursue or what course of action to take. Managers often engage in coalition building for making complex organizational decisions A coalition is an informal alliance among managers who support a specific goal
Background image of page 8
Image of page 9
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 06/05/2011 for the course MANAGMENT 25 taught by Professor Fu during the Spring '11 term at Asbury.

Page1 / 34

Managerial Decision Making - Managerial Decision Making...

This preview shows document pages 1 - 9. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online