Professional Documents
Culture Documents
Chapter 1.4 Decisionmaking
Chapter 1.4 Decisionmaking
The Nature of
Decision Making
• recognizing and
defining the
• nature
choosingof a decision
the situation
[most
• identifying alternatives
‘best’ effective]
alternative and
• putting it into practice.
Decision-Making Process. . . (continued)
• Programmed decision is
one that is fairly
structured or recurs with
some frequency (or
both).
• Nonprogrammed decision
is one that is
unstructured and occurs
much less often than a
programmed decision.
Programmed Decisions. .
Many decisions regarding
basic operating
systemsprocedures
and and
standard organizational
transactions fall into this
category.
McDonald’s employees
trained to makeare the Big
according to specific
Mac
procedures.
Starbucks, and many other
organizations, use programmed
decisions to purchase new
supplies [coffee beans, cups
and napkins].
Nonprogrammed Decisions. ..
Most of the decisions made by
top managers involving strategy
and organization design are
nonprogrammed.
Decisions about mergers, acquisitions
and takeovers, new facilities, new
products, labor contracts and legal
issues are nonprogrammed decisions.
Managers faced
with nonprogrammed decisions
must treat each one as unique,
investing great amounts of time,
energy and resources into
exploring the situation from all
views.
Intuition and experience are
major factors in these decisions.
Decision-Making Conditions
2) Identifying alternatives
a) Managers must realize that their alternatives may
be limited by legal, moral and
ethical
authority norms,
constraints, available technology,
economic considerations and
unofficial social
norms.
Rational Decision Making. . . (continued)
3) Evaluating alternatives
4) Selecting an alternative
a) Choosing the best alternative is the real test of
decision making.
b) Optimization is the goal because a decision is likely
to affect several individuals or departments.
c) Finding multiple acceptable alternatives may be
possible; selecting one and rejecting the others
may not be necessary.
Rational Decision Making. . . (continued)