6-1. Decision Making

6-1. Decision Making - DECISION MAKING Much of what...

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Unformatted text preview: DECISION MAKING Much of what managers do involves making decisions Poor decision making can seriously harm an organization. The first criteria for good decision making is good information Timely, high quality, complete, relevant, easily understood Variety of people with different knowledge more information synergy diverse group gives more ideas Effective Managers Able to collect and analyze information Keep up with current information technology Recognize need for high quality information Capable of both systematic and intuitive thinking Problem Seekers rather than Problem solvers (or even worse problem avoiders) ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ Effective Managers Understand the advantages and disadvantages of individual and group decision making, and know when to use each. Understand, recognize, and avoid or correct for decision biases, escalation of commitment and groupthink. ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ RATIONAL DECISION MAKING MODEL FROM ECONOMICS BASIC ASSUMPTION: PEOPLE ARE RATIONAL, LOGICAL, ORGANIZED AND HAVE SPECIFIC GOALS FOR EACH SITUATION ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ RATIONAL DECISION MAKING MODEL 1. IDENTIFY THE PROBLEM 2. DEVELOP KEY OBJECTIVES AND CRITERIA 3. GENERATE ALTERNATIVES 4. ANALYZE ALTERNATIVES 5. SELECT BEST SOLUTION 6 IMPLEMENT THE DECISION 7. MONITOR AND EVALUATE RESULTS ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ BOUNDED RATIONALITY MODEL HERB SIMON AND JAMES MARCH (1950s) Man Is Not Rational Information Overload Limited Resources Satisficing rather than Optimizing ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ LIMITATIONS OF RATIONAL MODEL 1. Problems are clear 2. Objectives are clear 3. Everyone agrees on the criteria and...
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6-1. Decision Making - DECISION MAKING Much of what...

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