ch06 (2) - Managerial Decision Making Decision Making is...

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Managerial  Decision  Making
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Decision Making is not Easy Unclear information. Often conflicting points of view. It must be done amid ever-changing factors:
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Types of Decisions Programmed decisions : situations that occur often enough to enable decision rules to be developed. Nonprogrammed decisions : are made in response to situations that are unique, are poorly defined and largely unstructured. many involve strategic planning. Decision making the process of identifying problems and opportunities, then resolving them.
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Programmed and Nonprogrammed Decision Differences Certainty all the information the decision maker needs is fully available. Risk decision has clear-cut goals. good information is available. future outcomes associated with each alternative are subject to chance. Uncertainty managers know which goals they with to achieve. information about alternatives and future events is incomplete. managers may have to come up with creative approaches to alternatives. Ambiguity by far the most difficult decision situation. goals to be achieved or the problem to be solved is unclear. alternatives are difficult to define. information about outcomes is unavailable.
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Conditions that Affect the Possibility of Decision Failure Organizational Problem Problem Solution Low High Possibility of Failure Certainty Risk Uncertainty Ambiguity Programmed Decisions Nonprogrammed Decisions
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Selecting a Decision Making Model Depends on the manager’s personal preference. Whether the decision is programmed or non- programmed. Extent to which the decision is characterized by risk, uncertainty, or ambiguity.
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Three Decision Making Models Classical Model Administrative Model Political Model
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Classical Model Based on economic conditions Is considered to be normative
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This note was uploaded on 09/08/2011 for the course ECON 101 taught by Professor Smith during the Spring '11 term at Central Lancashire.

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ch06 (2) - Managerial Decision Making Decision Making is...

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