Decision_making - Chapter 6 Decision Making: The Essence of...

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    Chapter 6 Decision Making: The  Essence of the Manager’s  Job
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    Objectives   Define decision and decision-making process. Describe the eight steps in the decision making  process. Describe the manager as decision maker. Assumptions of rational decision making Bounded rationality, satisficing, and  escalation of commitment. Intuitive decision making Programmed and nonprogrammed decisions Decision making conditions and styles Decisions making in today’s world.
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    Definitions A decision is a choice between two or more  available alternatives.  Decision-Making Process - Involves the steps  decision makers go through in making a  decision. It include: Identifying a problem and decision criteria,  allocating weights to the criteria, developing,  analyzing, and selecting an alternative that  can resolve the problem, implementing the  selected alternative, and concludes with  evaluating the decision’s effectiveness
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    Decisions managers make Top level managers – set organization goals,  formulate strategies for achieving goals etc. Middle level managers – set weekly or monthly  production schedules, handle problems that  arise, select and discipline, etc. First line managers – set daily or weekly  operational schedules, handle problems that  may arise, select and discipline employee,  appraise employees, recommend employees for  pay rise
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    Decision-making process Step 1. Identify the problem: Problem  discrepancy between an existing and desired  state of affairs. Characteristics of problems: A problems exists when a manager becomes  aware of a gap between existing and desired  performance. There is pressure to solve it. The manager must have authority,  information, or resources needed to solve the  problem
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    Decision-making process (Cont…) Step 2. Identify decision criteria.  How do we solve the problem?  What’s relevant in making our decision –  price, product, model, warranties, durability,  etc? Risks likely to be encountered. Outcomes that are desired Another example: If you need to hire a new  sales person, good interpersonal skills, superior  motivation, and knowledge of the selling process  might also be some of the criteria needed.
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    Decision-making process (Cont…) Step 3. Allocate weights to criteria.  Criteria must be valued based on their  importance. Assigning weights to each item places the 
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This note was uploaded on 04/09/2008 for the course BUS 103 taught by Professor Obiaku during the Spring '08 term at Community College of Allegheny County.

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Decision_making - Chapter 6 Decision Making: The Essence of...

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