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ManagerialDecisionMakingChapter91ManagerialDecisionMakingChapManagerialDecisionMakingDecisionmakingisnoteasyItmustbedoneamidever-changingfactorsunclearinformationconflictingpointsofviewManager’sChallenge:Tupperware2ManagerialDecisionMakingDeciManagerial

DecisionMakingDecisionCharacteristicsDecision-makingModelsStepsExecutivesTakeMakingImportantDecisionsParticipativeDecisionMakingTechniquesforImprovingDecisionMakinginToday’sOrganizationsTopicsChapter93ManagerialDecisionMakingDeciDecisionsandDecisionMakingDecision=choicemadefromavailablealternativesDecisionMaking=

processofidentifyingproblemsandopportunitiesandresolvingthem4DecisionsandDecisionMakingDCategoriesofDecisionsProgrammedDecisionsSituationsoccurredoftenenoughtoenabledecisionrulestobedevelopedandappliedinthefutureMadeinresponsetorecurringorganizationalproblemsNonprogrammedDecisions–inresponsetounique,poorlydefinedandlargelyunstructured,andhaveimportantconsequencestotheorganizationEthicalDilemma:TheNo-ShowConsultant5CategoriesofDecisionsProgramDecisionsandDecisionMakingManydecisionsthatmanagersdealwitheverydayinvolveatleastsomedegreeofuncertaintyandrequirenonprogrammeddecisionmakingMaybedifficulttomakeMadeamidchangingfactorsInformationmaybeunclearMayhavetodealwithconflictingpointsofview6DecisionsandDecisionMakingMCertainty,Risk,Uncertainty,Ambiguity

CertaintyalltheinformationthedecisionmakerneedsisfullyavailableRiskdecisionhasclear-cutgoalsgoodinformationisavailablefutureoutcomesassociatedwitheachalternativearesubjecttochanceUncertaintymanagersknowwhichgoalstheywishtoachieveinformationaboutalternativesandfutureeventsisincompletemanagersmayhavetocomeupwithcreativeapproachestoalternativesAmbiguitybyfarthemostdifficultdecisionsituationgoalstobeachievedortheproblemtobesolvedisunclearalternativesaredifficulttodefineinformationaboutoutcomesisunavailable7Certainty,Risk,Uncertainty,ConditionsthatAffectthePossibilityofDecisionFailureOrganizationalProblemProblemSolutionLowHighPossibilityofFailureCertaintyRiskUncertaintyAmbiguityProgrammedDecisionsNonprogrammedDecisions8ConditionsthatAffectthePos

SelectingaDecisionMakingModelDependsonthemanager’spersonalpreferenceWhetherthedecisionisprogrammedornon-programmedExtenttowhichthedecisionischaracterizedbyrisk,uncertainty,orambiguity9

SelectingaDecisionMakingMThreeDecision-MakingModels

ClassicalModel

AdministrativeModel

PoliticalModel10ThreeDecision-MakingModelsCClassicalModelAssumptionsDecisionmakeroperatestoaccomplishgoalsthatareknownandagreeduponDecisionmakerstrivesforconditionofcertainty–gatherscompleteinformationCriteriaforevaluatingalternativesareknownDecisionmakerisrationalanduseslogicNormative=

describeshowamanagershouldandprovidesguidelinesforreachinganidealdecisionLogicaldecisionintheorganization’sbesteconomicinterests11ClassicalModelAssumptionsLogiAdministrative

ModelTwoconceptsareinstrumentalinshapingtheadministrativemodelBoundedrationality:peoplehavelimitsorboundariesonhowrationaltheycanbeSatisficing:meansthatdecisionmakerschoosethefirstsolutionalternativethatsatisfiesminimaldecisioncriteriaHerbertA.SimonHownonprogrammeddecisionsaremade--uncertainty/ambiguity12Administrative

ModelTwoconceAdministrativeModelManagersactuallymakedecisionsindifficultsituationscharacterizedbynon-programmeddecisions,uncertainty,andambiguityDecisiongoalsoftenarevague,conflictingandlackconsensusamongmanagers;RationalproceduresarenotalwaysusedManagers’searchesforalternativesarelimitedManagerssettleforasatisficingratherthanamaximizingsolutionintuition,lookstopastexperienceDescriptive=howmanagersactuallymakedecisions--nothowtheyshouldHownonprogrammeddecisionsaremade--uncertainty/ambiguity13AdministrativeModelManagersaPoliticalModelCloselyresemblestherealenvironmentinwhichmostmanagersanddecisionmakersoperateUsefulinmakingnon-programmeddecisionsDecisionsarecomplexDisagreementandconflictoverproblemsandsolutionsarenormalCoalition=informalallianceamongmanageswhosupportaspecificgoalCloselyresemblestherealenvironment14PoliticalModelCloselyresemblCharacteristicsofClassical,Political,andAdministrativeDecisionMakingModels

ClassicalModel AdministrativeModel PoliticalModelClear-cutproblemandgoals Vagueproblemandgoals Pluralistic;conflictinggoalsConditionofcertainty Conditionofuncertainty Conditionofuncertainty/ambiguityFullinformationabout LimitedinformationaboutInconsistentviewpoints;ambiguousalternativesandtheiroutcomesAlternativesandtheiroutcomesinformationRationalchoicebyindividualSatisficingchoiceforresolvingBargaininganddiscussionamongformaximizingoutcomes problemusingintuition coalitionmembers15CharacteristicsofClassical,SixStepsintheManagerial

Decision-MakingProcessEvaluationandFeedbackDiagnosisandAnalysisofCausesRecognitionofDecisionRequirementDevelopmentofAlternativesSelectionofDesiredAlternativeImplementationofChosenAlternativeDecision-MakingProcess

16SixStepsintheManagerial

DeDiagnosisandAnalysisofCausesDiagnosis=analyzeunderlyingcausalfactorsassociatedwiththedecisionsituationManagersmakeamistakeiftheyjumpintogeneratingalternativeswithoutfirstexploringthecauseoftheproblemmoredeeply17DiagnosisandAnalysisofCausUnderlyingCauses-Kepner/TregoeWhatisthestateofdisequilibriumaffectingus?Whendiditoccur?Wherediditoccur?Howdiditoccur?Towhomdiditoccur?Whatistheurgencyoftheproblem?Whatistheinterconnectednessofevents?Whatresultcamefromwhichactivity?18UnderlyingCauses-Kepner/TrSelectionofDesiredAlternativesRiskPropensity=willingnesstoundertakeriskwiththeopportunityofgaininganincreasedpayoffImplementation=usingmanagerial,administrative,andpersuasiveabilitiestotranslatethechosenalternativeintoaction19SelectionofDesiredAlternatiDecisionStylesDifferencesamongpeoplewithrespecttohowtheyperceiveproblemsandmakedecisionsNotallmanagersmakedecisionsthesameDirectivestyleAnalyticalstyleConceptualstyleBehavioralstyle20DecisionStylesDifferencesamPersonalDecisionFrameworkSituation:Programmed/non-programmedClassical,administrative,politicalDecisionstepsDecisionChoice:BestSolutiontoProblemPersonalDecisionStyle:DirectiveAnalyticalConceptualBehavioral21PersonalDecisionFrameworkSitDirectiveStylePeoplewhoprefersimple,clear-cutsolutionstoproblemsMakedecisionsquicklyMayconsideronlyoneortwoalternativesEfficientandrationalPreferrulesorprocedures22DirectiveStylePeoplewhoprefAnalyticalStyleComplexsolutionsbasedonasmuchdataastheycangatherCarefullyconsideralternativesBasedecisiononobjective,rationaldatafrommanagementcontrolsystemsandothersourcesSearchforbestpossibledecisionbasedoninformationavailable23AnalyticalStyleComplexsolutiConceptualStyleConsiderabroadamountofinformationMoresociallyorientedthananalyticalstyleLiketotalktoothersabouttheproblemandpossiblesolutionsConsidermanybroadalternativesRelayoninformationfrompeopleandsystemsSolveproblemscreatively24ConceptualStyleConsiderabroBehavioralStyleHaveadeepconcernforothersasindividualsLiketotalktopeopleone-on-oneUnderstandtheirfeelingsabouttheproblemandtheeffectofagivendecisionuponthemConcernedwiththepersonaldevelopmentofothersMaymakedecisionstohelpothersachievetheirgoalsExperientialExercise:What’sYourPersonalDecisionStyle?25BehavioralStyleHaveadeepcoParticipationinDecisionMakingHelpsgaugetheappropriateamountofparticipationforsubordinatesinprocessLeaderParticipationStylesFivelevelsofsubordinateparticipationindecisionmakingrangingfromhighlyautocratictohighlydemocraticVroom-JagoModel26ParticipationinDecisionMakiParticipationinDecisionMakingDiagnosticQuestionsDecisionparticipation

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