Chapter 10 - Chapter 10 Decision Making in Organizations...

Chapter 10: Decision Making in Organizations
• Decision making  the process of making choices from among several
alternatives
o One of the most important managerial activities
o Represents one of the most common and most crucial work roles of
executive decision making
A General, Analytical Model of the Decision-Making Process
• A conceptualization of the eight steps through which individuals and
groups making decisions
o Identify the problem
o Define objectives
o Make a predecision
o Generate alternatives
o Evaluate alternatives
o Make a choice
o Implement choice
o Follow up
• Highlights three important phases of decision-making
o Formulation
 Process of understanding a problem
o Consideration
 Process of determining and selecting a decision
o Implementation
 Process of carrying out the decision made
Decision Formulation
Problem Identification
• To decide how to solve a problem, one must first recognize and identify
it
• People often distort, omit, ignore, and/or discount info around them
that provides cues regarding the existence of problems
• Denying a problem may be the first impediment to solving it
Defining Objectives

• After a problem is identified, the next step is to define the objectives to
be met in solving the problem
• Important to conceive a problem in such a way that possible solutions
can be identified
Making a Predecision
• Predecision  A decision about what process to follow in making a
decision
• By assessing the type of problem in question and other aspects of the
situation, managers may opt to make decisions themselves or have
another make a decision for them
• Decisions about how to make a decision should be based on research
that tells us about the nature of the decisions made under different
circumstances
• Decision support systems  computer programs in which information
about organizational behavior is presented to decision makes in a
manner that helps them structure their responses to decisions
o Effective in helping people make decisions about solving problems
Decision Consideration
Generating Alternatives
• Stage in which possible solutions are identified
• In attempting to come up with solutions
o People tend to rely on previously used approaches that might
provide ready-made answers for them
Evaluating Alternative Solutions
• Of the alternatives, which one is the best?
• Various alternatives need to be identified
• Some may be more effective than others
• Some may be more difficult to implement than others
Making a Choice
• After several alternatives are evaluated one that is considered
acceptable is chosen
• Choosing which course of action to take is the step that most often
comes to mind when we think about decision making

Decision Implementation
Implementing the Decision
• Carrying out the decision
Following Up
• Monitoring the effectiveness of the decisions they put into action is
important to the success of organizations
• Have any new problems been causes by implementing the solution?