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bateman.Chap003.2 - Managerial Decision Making Making...

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Unformatted text preview: Managerial Decision Making Making Chapter 3 QUESTION OF THE DAY AOL recently announced 3 acquisitions including technology blog TechCrunch. This is intended to redefine itself as a hub for internet videos & bulletin boards for trendy topics. 1. Is this a decision which will affect the future of AOL? 2. What is the “vision” AOL is following? 3. Why are these decisions necessary? “The business executive is by The profession a decision maker. Uncertainty is his opponent. Overcoming it is his mission.” Overcoming ­John McDonald ­John McDonald 3-3 Managerial Decision Making Managerial Lack of Structure Lack Programmed decisions • Decisions encountered and made before, having objectively correct answers, and solvable by using simple rules, policies, or numerical computations. 3­5 Non programmed decisions • New, novel, complex decisions having no proven answers. Why Do Managers Sometimes Avoid Making Decisions? Avoid Managers can’t be sure how much time, energy, or trouble lies ahead Getting involved is risky; tackling a problem but failing to solve it can hurt a manager’s track record It is easier to procrastinate or get busy with less demanding activities The Stages of Decision Making The Identifying and diagnosing the problem 3­7 Making the Choice Making Maximizing • Making the best possible decision Satisficing • Choosing an option that is acceptable, although not necessarily the best or perfect Optimizing • Achieving the best possible balance among several goals Question Question ___________ is achieving the best possible balance among several goals A.Maximizing B.Satisficing C.Optimizing D.Minimizing 3­9 The Best Decision The Vigilance • A process in which a decision maker carefully executes all stages of decision making 3­10 Question Question ___________ is the process in which a decision maker carefully executes all stages of decision making. A.Innovation B.Quality C.Satisficing D.Vigilance 3­11 Barriers to Effective Barriers Decision Making Why don’t managers use rational decision processes? • • • • Improperly defined or misidentified goal Too few solution alternatives generated Poorly planned execution Inadequate or nonexistent monitoring Barriers to Effective Barriers Decision Making Psychological biases Biases that interfere with objective rationality including the illusion of control, framing effects, and discounting th illusion of control, framing effects, and discounting t Time pressures The pressure to act quickly; managers employ a variety of tactics to manage time pressures Social realities Interpersonal factors that decrease decision­ making effectiveness Pros and Cons of Using a Pros Group to Make Decisions Table 3.2 3­14 Managing Group Decision Making Making 3­15 Encouraging Creativity Encouraging 3­16 Managing Group Managing Decision Making Brainstorming • A process in which group members generate as many ideas about a problem as they can • Criticism is withheld until all ideas have been proposed Organizational Organizational Decision Making Constraints on decision makers: money, time, people, resources, etc. Models of organization decision making • Bounded rationality • Incremental model • Coalitional model • Garbage can model Decision making in a crisis Decision Making in a Crisis Decision 3­19 What kinds of crises could your company face? Can your company detect a crisis in its early stages? How will it manage a crisis if one occurs? How can it benefit from a crisis after it has passed? Crisis Decisions Crisis How NOT to handle We don’t have a crisis We can handle a crisis without pre­ planning In a crisis, someone (the govt.?) will rescue us Accidents are the cost of doing business The most important thing is a crisis is to protect the company image ...
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