This preview shows page 1. Sign up to view the full content.
Unformatted text preview: Managerial Decision
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
profession a decision maker.
Uncertainty is his opponent.
Overcoming it is his mission.”
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
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
___________ is achieving the best possible balance among several goals
D.Minimizing 39 The Best Decision
The Vigilance • A process in which a decision maker carefully executes all stages of decision making 310 Question
___________ is the process in which a decision maker carefully executes all stages of decision making.
D.Vigilance 311 Barriers to Effective
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
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
Group to Make Decisions Table 3.2
314 Managing Group Decision
Making 315 Encouraging Creativity
Encouraging 316 Managing Group
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
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
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 ...
View Full Document
This note was uploaded on 01/13/2012 for the course 620 300 taught by Professor Gordon during the Fall '10 term at Rutgers.
- Fall '10