I.

Streams of Managerial
Decision Making.

A. Types of problems.
 Structured problems.
 Recognition stage is obvious.
 E.g.,--a missed delivery date.
 Unstructured problems.
 Problem itself is hard to recognize.
 Because of unclear or inadequate
information.
 E.g., about developments and trends.
 Recognition of a problem leads to activities to
solve the problem.
Decision Making Models
 Rational Model –
 Comprehensive problem definition
 An exhaustive search for alternatives
 Optimal solution/best alternative
 Bounded Rationality Model –
 Considers practical limitations of the individual’s
rationality (limited problem definition,
information search, evaluation of alternatives. etc
 Leads to satisficing – selecting an acceptable
goals – may thus not be the optimal alternative
Decision Making Models
 Political Model –
 Organizational decisions reflect the desires of
individuals to satisfy their own interests
 Decisions are a result of the distribution of power in the
organisation and the effectiveness of the tactics used by
the various
 Garbage Can Model
 A decision making situation has four streams: problems,
opportunities, interested participants and trigger events
 When a certain pattern of the streams fit, a decision is
made
 Example: Decision to adopt the death penalty
II. Goal Setting.

A.Definitions.
 Goal-setting: a process to increase
efficiency and effectiveness by
specifying the designed outcomes.
 Goals: future outcomes desired and
sought after.
II. Goal Setting.

B. Stakeholders and goal setting.

 Diverse groups have stakes and so continuously try to
develop, modify, and discard goals.
 More in dynamic complex environment than in stable
simple environment.
 New opportunities, threats, and weaknesses.
 Goals of different stakeholders frequently
incompatible.
 Goal setting most difficult when:
 Multiple stakeholders all have power.
 Multiple stakeholders will push their own interests
and perceive interests of others as incompatible.
 Stakeholders keep changing what they want from
the organization.
 Management is divided into competing groups.
II. Goal Setting.

C. Functions of goal setting.

 Guide and direct behavior.
 Provide challenges and standards for assessment
purposes.
 Justify actions and use of resources to pursue
them.
 Define the rationale for the structure of an
organization.
 Reflect what goal setters consider important for
planning and control.
 Provide insights into behavior of groups and
individuals and groups.