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Lesson 1 Decision Making
Lesson 1 Decision Making
Lesson 1 Decision Making
Learning Objectives
After reading this chapter, you should be able to:
Problem
A discrepancy between an
existing and a desired state of
affairs
Decision criteria
Factors that are relevant in a
decision
Characteristics of Management
Decision Making
Programmability
Conflict Risk
Crisis
Characteristics of Management
Decision Making (Cont)
Programmed Decisions
Programmability
Non-programmed Decisions
Certainty
Uncertainty
Uncertainty
Characteristics of Management
Decision Making (Cont)
– occurs when the outcome of
Risk
management decision is uncertain
Risk has both positive and negative aspects
Decision environment for risk vary depending upon company
culture and size
Conflict – occurs when there are opposing goals,
scares resources, or differences in priorities
Crisis – a situation that involves small amounts of
time to make a decision that can impact the
survival of the organization
Characteristics of Management
Decision Making (Cont)
Structured problems
* Involved goals that clear.
*Are familiar(have occurred before)
*Are easily and completely defined-
information about the problem is available and
complete.
Programmed decision
*A repetitive decision the can be handled by a
routine approach.
Problems and Decisions ( cont’d)
Unstructured problems
* Problems that are new or unusual and for which
information is ambiguous or incomplete.
* Problems that will require custom-made
solutions.
Non-programmed decisions
* Decision that are unique and nonrecurring.
* Decision that generate unique responses.
Types of Programmed Decisions
Policy
* a general guideline for making a decision
about a structured problem.
Procedure
* A series of interrelated steps that a
manager can use to respond ( applying a
policy) to a structured problem.
Rule
* an explicit statement that limits what a
manager or employee can or cannot do.
Programmed vs. Non-
programmed Decisions
Characteristics Programmed Non-programmed
decisions decisions
Type of problem Structured Unstructured
Evaluating
the decision
Step 1 – Identify and Define the Problem
18
Step 3-Evaluating Alternatives
Self-serving Anchoring
Decision-Making Effect
Sunk costs Errors & Biases
Selective
Perception
Randomness
Confirmation
representation
framing
Availability
Characteristics of an Effective
Decision-Making
It focuses on what is important
It is logical and consistent.
It acknowledges both subjective and objective
thinking and blends analytical with intuitive
thinking.
It requires only as much information and analysis
as is necessary to resolve a particular dilemma.
It encourages and guides the gathering of relevant
information and informed opinion.
It is straightforward,reliable, easy to use, and
flexible.
A General-
Decision
Making
Model
A General Decision-Making model
Organization Politics
Illusion of Control
Organizational Models of Decision-Making
Leadership Style
Stimulating Creativity
Leader Decision Making Styles
Consensus Mapping
Brainstorming
(Storyboarding)
Delegation skills
Managers who know how to delegate
are able to accomplish more than
those who feel the need to be involved
in every decision, no matter how trivial.
Effective Time
Management Practices
Plan a list of things that need to be done today.
Plan weekly, monthly, and annual schedules of
activities.
Schedule difficult and challenging activities when
you are at your highest level of energy and
alertness.
Set deadlines.
Effective Time
Management Practices (continued)
Answer phone messages and e-mail
in batches during a lull in your
work schedule.
Have a place to work uninterrupted.
Do something productive during non-productive
activities.
Effective Delegation
Determine what you want
done.
Match the desired task with
the most appropriate
employee.
Communicate clearly when
assigning the task.
Ask questions to make sure the
task is fully understood.
Set clear guidelines.
Effective Delegation (continued)
Decision Making
– The process of identifying and choosing alternative
courses of action to meet the demands of a situation.
Trends in Decision Making
– The pace of decision making is accelerating:
managers report making more decisions and having
less time to make them.
• Complex streams of decisions
• Sources of decision complexity
• Perceptual and behavioral decision traps
(Cont’d)
Behavioral models
Descriptions of management based on behavioral
scientists observations of what managers actually
do in their jobs.
Guideline for making decision more effective