chap 3a - 2/21/2012 Chapter Three Managerial Decision...

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Unformatted text preview: 2/21/2012 Chapter Three Managerial Decision Making Characteristics of Decisions J r . ‘ Decision I 0y] uchoice made fi'om available alternatives ‘ t 4 WV / 2V) l a” ;/ Importance of decision making nlinkingprocess-pervades all management functions ex} [3 4/2 E 4., )fl 4‘ ‘://K m U V5 Ll ghf l “The best managers make decisions constantly” (p ‘f". . m £2 sfifie P470 93703 nrelatlonship to responsxbility - Elliot J aques Iprescribed content I . \ \ [I s ‘ Idiscretionmy content 7) 3+ 0 )9 7/ (/ /’ ,Cl 5-! usensed as responsibility quuitable pay — it V digmflilux \ \ cal/mama WW dismal imam coma/1+, W V_(6l+.&/+L\,Q vesMb/Jé m Ojvemlw W peopLQ Wat/H +0 be p01) (CW WJsbak / Characteristics of Decisions (cont.) Lack of structure (p. 87) Programmed Non r0 rammed Problem Type Routine Unique Alternatives Limited Unknown Resolution Method Decision Rule (SOP) Problem Solving Decision Maker Lower-lech Top-level 2/21/2012 Characteristics of Decisions (cont.) Certainty (p. 87)— state that exists when decision makers have accurate and comprehensive information ncertainty — state that exists when decision makes have insyfiicieminfgmjmn I can’t identify] all potential consequences - can’t’ assess the likelihood a variOus consequences Risk (p. 88) — state that exists when the probability of success is less than 100 percent and losses may occur Conflict (p. 88) — opposing pressures from different sources, occurring on the level of psychological conflict or of é conflict between individuals or groups I approach-approach Iavoidance-avoidance Stages of Decision Making — Figure 3.2 (p. 89) iagnouugi‘jy Adam Smith a problem “Hf § Generatxng‘wg‘i 3 alternative.” 5 o Rational model is prescriptive rather than descriptive - “full execution of the six-stage model [is] the exception rather than Stages of Decision Making (cont.) 7 Identifying and recognizing the prob 7 disci‘épancy between current stateoi' c (11:1011 and ~ is desired, " w ‘ ' ’ A " ' g ga between performance and: * ast performance I aperfoniiance of other units a expected ’perfOrmance x , . _ v V . I ., , WA: p ornmny—aohance to achieve amoreédesn le stat thaif Qfil'semonéf ‘ ‘ '1 In : m? A of'percep‘tiOnfiéhw WWI/Li v I“! 992’ a; I WWWSJM emu/W * x W ‘ Q, 6'13 : haven/we " ' Decision-Making Steps (cont) 2 -— Generating ajtpflgigygofimgons (p. 90) ’I‘potential' solutions should respond to the needs of the ‘ situation and correct the underlying causes % neatly-mode solutions — ideas that have been tried before Icustom-mgde solutions a- new, creative solutions designed ”“specifically for the'problern I brainstorming — group members generate as many ideas about a problem as they can (p. 103) I requires postponing the evaluation of ideas Decision-Making Steps (cont) Stage 4 — Making the choice (p. 92) Idesired alternative Should represent the overall :goals and values‘ofltlie organization I identify decision criteria: ‘ : «3 “musts and shopldtry’s” " Imaximizing — decision realizes the best possible outcome Isatisficing — choose the first solution alternative that satisfies minimal criteria, regardless of whether better solutions are presumed to exrst Ichoose an alternative that is acggtable although not necessarily the best or p ect Icompare the alternative with the goal, not against other options Isearch for alternative ends when an okay solution is found Ioptimizin — achieving the best possible balance among severa goals Barriers to Effective Decision Making fifchoiagi‘calfhififlp. 97)“? r . Iillusion of control — peopleis belief that they can influence events, eyen when they have no control over what will hfippcn. , r » I ffhiiring‘ effects Tawde‘cision bias influenced by the way in which a problem or decision alternative is phrased or presented I people more likely to invest in a stock with a 70% chance of yielding a profit than a stock with a 30% chance of losing money Idiscormt the future — a bias weighting short-term costs and benefits more heavily than longer-term costs and benefits 2/21/2012 2/21/2012 Barriers to Effective Decision Making (cont) Time pressures (p. 98) made-off between speed and quality Social realities (p. 98) linfluence of social interaction on the decision-making proces Decision Making in Groups (p. 98) Potentialgat‘ivantagcs of using a group' ' i r Imore information available ‘ , ‘ o perspectives ,andfapproachessurface C m‘for iniellectual stimulation / 0gp members acquire understanding of the rationale for a decision .5: u it » , . usuongercomrnitnient to the deciSion Decision Making in Groups (cont.) Groupthink (p. 100) Igroup members avoid disagreement as they strive for consensus Iblindness about uthe group’s vulnerability -warnings about the group’s actions nopposin g views ustereotyping .mindguards Imanage groupthink by introducing cognitive conflict (p. 1% ’ evl s a vocate— a person who must criticize ideas to ensure that their downsides are fully explored Idialectic —- structured debate comparing two conflicting courses of action Imultile advocac cu [MI W 'Dhg ’ diSCL Meme/H’s Ctloovi’ ism/es Nb 0‘? UL , v WOW/9 bfianiS—i" OxYDUPWH’mG 4 he“ V‘ \ovo‘L 2/21/2012 Organizational Decision Making (cont.) iglodas of organizational decision processes (p. 104) ’ I dé5cribé new manager; actually make consequential decisions I , I ow *- xx” ' t . . . bau’iided rationalize —:less-than-perfect form of rationality in which’ decision makers cannot be perfectly rational’because decisions are complex and complete information is U unavailable r cannot be fully processed ’ ' ‘ aker has insufficient resources, time, ion, and cognitive ability to implement the rational '— é; a 711’ V154,“: fijflghiuflre Quay/1L? \Vl ,' l. L185 n lHerbert ‘Sflimoni organizational Decision-Making (cont.) 1, odelsol' organizational decismn processes (cont.) ) ‘uindementiiiitiodéi ’ major solutions arise through ascries of V smaller ecisions 534’ ‘ ‘ ; ‘ur/nake" e smallest response possflile that will make the roblém tolerable, 3 L ' \ klofls’exsightfif oiiginal goal(s) *‘ x . ' " M.coalifififialwpdel‘éygoups with differing preferences use power and negotiation to influence decisions ugarbage can model — a chaotic process leading to seemingly random decisions Organizational Decision Making (cont.) mfielsfiof orgai ational dgmsmn processes (cont.) ‘ , s . . / 11W in escalation: tendency to increase _ t ‘ sggmmitm W a previously selected course of action, even I " afiensggnficmt evidence’reveals that the original decision Viewers“ ‘ A a fier commitm fit without justificatipn asunkco' V parge front-end investment gyégovinvolvementfi ’1 A i , gwith escglation problem x ’ . img ‘ I): V, ' epargte unplentientationteam from innovation team Q ' ureduces egd itivoylvernentqa—Kfl/Wiei’fiecm 2 entices the eiper’tise of the innovators ...
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This note was uploaded on 04/01/2012 for the course MGMT 300 taught by Professor Hamilton during the Spring '11 term at Rutgers.

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chap 3a - 2/21/2012 Chapter Three Managerial Decision...

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