Plan 14

 Introduction 5
 Revision on OC 3*10
– Students presentations
 Discussion: Decision making 40
 Check HW: case Asset1bank (after the event) 25

 HW 5
–
https://www.studysmarter.co.uk/explanations/business-studi
es/organizational-behavior/organizational-decision-making
– Ppt
– Final project
– Bias (explain)
 Focus writing
 What do I lack to become a good manager...
 Managerial decision - making
…is the process through which Managers in
an organization arrive at a suitable alternative
solution to a given problem...
Characteristics Of Managerial
Decisions

Risk Uncertainty

Lack of
Conflict
Structure
 Characteristics Of Managerial
Decisions
 Lack of structure:

– Programmed Decisions

– Non-Programmed Decisions
 Comparison

Programmed Decisions Non-Programmed Decisions

Problem Frequent, repetitive, routine. Novel, unstructured. Much

Much certainty regarding uncertainty regarding cause &
cause & effect relationships. effect relationships.

Procedure Dependence on policies, Necessity for creativity, intuition,

rules, & definite procedures. tolerance for ambiguity, creative
problem solving.

Diversification in new products &

Business Periodic reorders of inventory. markets.
example
Characteristics Of Managerial Decisions

Uncertainty & Risk:

 Certainty: Have sufficient info to predict precisely

consequences of one’s actions

 Uncertainty: Have INsufficient info to know consequences of

different actions

 Cannot estimate likelihood of various consequences of their

actions
Characteristics Of Managerial Decisions
 Risk: Available info permits estimation of likelihood of various
consequences

 Probability of action being successful less than 100 %, &

losses may occur

Good Managers prefer to manage risk

Characteristics Of Managerial Decisions

 Conflict:
 Opposing pressures from different sources
 Few decisions are without conflict
 Decision Making Stages
Identifying &
diagnosing
the problem
Generating
alternative
solutions

Evaluating
alternatives

Making the
decision (choice)
Identifying
resources and Implementing
constraints the decision

M&E
the decision
https://slidetodoc.com/managerial-decision-making-developed-by-cool-
pictures-multi/
Slideshare.net
 Decision making Concepts

 Maximizing
 Satisficing
 Optimizing
 Decision making Concepts

Making the Choice:

 Maximize: Decision realizing best possible outcome

 Requires search thoroughly for complete range of alternatives
 Each alternative carefully assessed
 Compare one alternative to another
 Decision making Concepts

 Satisfice: Choose option that’s acceptable although not

necessarily best or perfect
 Compare the choice w/the goal, not against other options
 Search for alternatives ends when an okay solution is found

 Optimizing: Achieve best possible balance among several

goals
Models of organizational decision making

 Incremental Model: Major decisions arise thru series of smaller

decisions
 Piecemeal approach to larger solutions
 Coalitional Model: Groups w/differing preferences use power &
negotiation to influence decisions
 Used when people disagree about goals or compete for
resources
 Models of organizational decision
making
 Garbage Can Model: Chaotic process leading to seemingly
random decisions
 Occurs when people  unsure of their goals & what
should be done
 Dramatic departure from rationality in decision making
 Phycological /Cognitive bias
 Framing effect
 Attentional bias
 Confirmation bias
 False consensus effect
 Misinformation effect
 Halo effect
 etc
 HW
 Ppt
 Article:
https://www.studysmarter.co.uk/explanations/busi
ness-studies/organizational-behavior/
organizational-decision-making
 Case in FP groups: Asset1Bank
 Final Project – (preliminary results, consultations)
 Cognitive biases, explanation