2014 Cengage Learning. All Rights Reserved.

May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Decision
making is the Decision is a
process of choice made
identifying from
opportunities available
alternatives

2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 Programmed Decisions
Recurring problems
Apply rule
Nonprogrammed Decisions
Unique situations
Poorly defined
Unstructured
Important consequences

2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 Difference between programmed and
unprogrammed decisions
Certainty Situation in which all information
is fully available
Risk Future outcomes associated with an
alternative are subject to chance
Uncertainty - Depends on the amount and
value of information available

2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
4
 Ambiguity - Making decisions in difficult
situations
The goals and the problem are unclear
Wicked decisions involve conflict over goals
and have changing circumstances, fuzzy
information, and unclear links
There is often no right answer

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5
 Rational economic assumptions drive
decisions
Operates to accomplish established goals,
problem is defined
Decision maker strives for information and
certainty, alternatives evaluated
Criteria for evaluating alternatives is known;
select alternative with maximum benefit
Decision maker is rationale and uses logic

2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
6
 Administrative/descriptive approach
How managers really make decisions
Recognize human and environmental
limitations
Bounded rationality People have limits or
boundaries on how rational they can be
Satisficing Decision makers choose the first
solution that satisfies minimal decision
criteria

2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 Goals are often vague
Rational procedures are not always used
Managers searches for alternatives are
limited
Most managers settle for satisficing
Intuition Quick apprehension of situation
based on practice and experience

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 Decisions involve managers with diverse
interests
Managers must engage in coalition
building
Informal alliance to support specific goal
Without a coalition, powerful groups can
derail the decision-making process
Political model resembles the real
environment

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 Assumptions of the political model
Organizations are made up of groups with
diverse interests, goals, and values
Information is ambiguous and incomplete
Lack of time, resources, or mental capacity
to process all information regarding a
problem
Decisions are the result of bargaining and
discussion among coalition members

2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
10
 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
11
 Recognition of Decision Requirement Identify
problem or opportunity
Diagnosis and Analysis Analyze underlying causal
factors
Develop Alternatives Define feasible alternatives
Selection of Desired Alternative Alternative with
most desirable outcome
Implementation of Chosen Alternative Use of
managerial, administrative, and persuasive abilities
to execute chosen alternative
Evaluation and Feedback Gather information
about effectiveness
2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
13
 Directive style People who prefer simple,
clear-cut solutions to problems
Analytic style Managers prefer complex
solutions based on a lot of data
Conceptual style Managers like a broad
amount of information
Behavioral style Managers with a deep
concern for others

2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 Being influenced by initial impressions
Justifying past decisions
Seeing what you want to see
Perpetuating the status quo
Being influenced by problem framing
Overconfidence

2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 Mechanisms to help reduce bias-related
decision errors:
Start with brainstorming
Use hard evidence
Engage in rigorous debate
Avoid groupthink
Know when to bail
Do a postmortem

2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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