Professional Documents
Culture Documents
Chapter 07
Chapter 07
Chapter 07
Learning Objectives
After studying the chapter, you should be able to:
Differentiate between programmed and nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process. Describe the six steps that managers should take to make the best decisions. Explain how cognitive biases can lead managers to make poor decisions.
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Learning Objectives
Identify the advantages and disadvantages of group decision making, and describe techniques that can improve it. Explain the role that organizational learning and creativity play in helping managers to improve their decisions. Describe how managers can encourage and promote entrepreneurship to create a learning organization and differentiate between entrepreneurs and intrapreneurs
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Decision Making
Programmed Decision
Routine, virtually automatic decision making that follows established rules or guidelines. Managers have made the same decision many times before Little ambiguity involved
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Decision Making
Non-Programmed Decisions
Nonroutine decision made in response to unusual or novel opportunities and threats. The are no rules to follow since the decision is new. Decisions are made based on information, and a managers intuition, and judgment.
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Decision Making
Intuition
feelings, beliefs, and hunches that come readily to mind, require little effort and information gathering and result in on-the-spot decisions
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Decision Making
Reasoned judgment
decisions that take time and effort to make and result from careful information gathering, generation of alternatives, and evaluation of alternatives
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Question?
Which decision model assumes the decision maker can identify and evaluate all possible alternatives? A. Neo-classical B. Classical C. Administrative D. practical
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Figure 7.1
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Figure 7.2
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Uncertainty
Probabilities cannot be given for outcomes and the future is unknown.
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Figure 7.4
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Ethicalness
Economic Feasibility Can organizations performance goals sustain this alternative? Practicality Does the management have the capabilities and resources required to implement the alternative?
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Figure 7.5
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Discussion Question?
Which step in the decision making process is the most important? A. Generating alternatives B. Choosing an alternative C. Evaluating alternatives D. Learning from feedback
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Feedback Procedure
1. Compare what actually happened to what was expected to happen as a result of the decision 2. Explore why any expectations for the decision were not met 3. Derive guidelines that will help in future decision making
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Figure 7.6
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Representativeness
The decision maker incorrectly generalizes a decision from a small sample or a single incident.
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Escalating Commitment
Committing considerable resources to project and then committing more even if evidence shows the project is failing.
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Promote Diversity
Increasing the diversity in a group may result in consideration of a wider set of alternatives.
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Figure 7.7
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Question?
What is the ability of the decision maker to discover novel ideas leading to a feasible course of action? A. Originality B. Imagination C. Creativity D. Ingenuity
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Figure 7.8
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2. Mental Models
3. Team Learning
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5. Systems Thinking
Knowing and understanding how actions in one area of the firm will impact other areas of the firm.
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Entrepreneurship
Entrepreneurs
Individuals who notice opportunities and take the responsibility for mobilizing the resources necessary to produce new and improved goods and services.
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Entrepreneurship
Intrapreneurs
Individuals (managers, scientists, or researchers) who work inside an existing organization and notice an opportunity for product improvements and are responsible for managing the product development process.
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