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ManagerialDecisionMakingChapter91ManagerialDecisionMakingDecisionmakingisnoteasyItmustbedoneamidever-changingfactorsunclearinformationconflictingpointsofviewManager’sChallenge:Tupperware2Managerial

DecisionMakingDecisionCharacteristicsDecision-makingModelsStepsExecutivesTakeMakingImportantDecisionsParticipativeDecisionMakingTechniquesforImprovingDecisionMakinginToday’sOrganizationsTopicsChapter93DecisionsandDecisionMakingDecision=choicemadefromavailablealternativesDecisionMaking=

processofidentifyingproblemsandopportunitiesandresolvingthem4CategoriesofDecisionsProgrammedDecisionsSituationsoccurredoftenenoughtoenabledecisionrulestobedevelopedandappliedinthefutureMadeinresponsetorecurringorganizationalproblemsNonprogrammedDecisions–inresponsetounique,poorlydefinedandlargelyunstructured,andhaveimportantconsequencestotheorganizationEthicalDilemma:TheNo-ShowConsultant5DecisionsandDecisionMakingManydecisionsthatmanagersdealwitheverydayinvolveatleastsomedegreeofuncertaintyandrequirenonprogrammeddecisionmakingMaybedifficulttomakeMadeamidchangingfactorsInformationmaybeunclearMayhavetodealwithconflictingpointsofview6Certainty,Risk,Uncertainty,Ambiguity

CertaintyalltheinformationthedecisionmakerneedsisfullyavailableRiskdecisionhasclear-cutgoalsgoodinformationisavailablefutureoutcomesassociatedwitheachalternativearesubjecttochanceUncertaintymanagersknowwhichgoalstheywishtoachieveinformationaboutalternativesandfutureeventsisincompletemanagersmayhavetocomeupwithcreativeapproachestoalternativesAmbiguitybyfarthemostdifficultdecisionsituationgoalstobeachievedortheproblemtobesolvedisunclearalternativesaredifficulttodefineinformationaboutoutcomesisunavailable7ConditionsthatAffectthePossibilityofDecisionFailureOrganizationalProblemProblemSolutionLowHighPossibilityofFailureCertaintyRiskUncertaintyAmbiguityProgrammedDecisionsNonprogrammedDecisions8

SelectingaDecisionMakingModelDependsonthemanager’spersonalpreferenceWhetherthedecisionisprogrammedornon-programmedExtenttowhichthedecisionischaracterizedbyrisk,uncertainty,orambiguity9ThreeDecision-MakingModels

ClassicalModel

AdministrativeModel

PoliticalModel10ClassicalModelAssumptionsDecisionmakeroperatestoaccomplishgoalsthatareknownandagreeduponDecisionmakerstrivesforconditionofcertainty–gatherscompleteinformationCriteriaforevaluatingalternativesareknownDecisionmakerisrationalanduseslogicNormative=

describeshowamanagershouldandprovidesguidelinesforreachinganidealdecisionLogicaldecisionintheorganization’sbesteconomicinterests11Administrative

ModelTwoconceptsareinstrumentalinshapingtheadministrativemodelBoundedrationality:peoplehavelimitsorboundariesonhowrationaltheycanbeSatisficing:meansthatdecisionmakerschoosethefirstsolutionalternativethatsatisfiesminimaldecisioncriteriaHerbertA.SimonHownonprogrammeddecisionsaremade--uncertainty/ambiguity12AdministrativeModelManagersactuallymakedecisionsindifficultsituationscharacterizedbynon-programmeddecisions,uncertainty,andambiguityDecisiongoalsoftenarevague,conflictingandlackconsensusamongmanagers;RationalproceduresarenotalwaysusedManagers’searchesforalternativesarelimitedManagerssettleforasatisficingratherthanamaximizingsolutionintuition,lookstopastexperienceDescriptive=howmanagersactuallymakedecisions--nothowtheyshouldHownonprogrammeddecisionsaremade--uncertainty/ambiguity13PoliticalModelCloselyresemblestherealenvironmentinwhichmostmanagersanddecisionmakersoperateUsefulinmakingnon-programmeddecisionsDecisionsarecomplexDisagreementandconflictoverproblemsandsolutionsarenormalCoalition=informalallianceamongmanageswhosupportaspecificgoalCloselyresemblestherealenvironment14CharacteristicsofClassical,Political,andAdministrativeDecisionMakingModels

ClassicalModel AdministrativeModel PoliticalModelClear-cutproblemandgoals Vagueproblemandgoals Pluralistic;conflictinggoalsConditionofcertainty Conditionofuncertainty Conditionofuncertainty/ambiguityFullinformationabout LimitedinformationaboutInconsistentviewpoints;ambiguousalternativesandtheiroutcomesAlternativesandtheiroutcomesinformationRationalchoicebyindividualSatisficingchoiceforresolvingBargaininganddiscussionamongformaximizingoutcomes problemusingintuition coalitionmembers15SixStepsintheManagerial

Decision-MakingProcessEvaluationandFeedbackDiagnosisandAnalysisofCausesRecognitionofDecisionRequirementDevelopmentofAlternativesSelectionofDesiredAlternativeImplementationofChosenAlternativeDecision-MakingProcess

16DiagnosisandAnalysisofCausesDiagnosis=analyzeunderlyingcausalfactorsassociatedwiththedecisionsituationManagersmakeamistakeiftheyjumpintogeneratingalternativeswithoutfirstexploringthecauseoftheproblemmoredeeply17UnderlyingCauses-Kepner/TregoeWhatisthestateofdisequilibriumaffectingus?Whendiditoccur?Wherediditoccur?Howdiditoccur?Towhomdiditoccur?Whatistheurgencyoftheproblem?Whatistheinterconnectednessofevents?Whatresultcamefromwhichactivity?18SelectionofDesiredAlternativesRiskPropensity=willingnesstoundertakeriskwiththeopportunityofgaininganincreasedpayoffImplementation=usingmanagerial,administrative,andpersuasiveabilitiestotranslatethechosenalternativeintoaction19DecisionStylesDifferencesamongpeoplewithrespecttohowtheyperceiveproblemsandmakedecisionsNotallmanagersmakedecisionsthesameDirectivestyleAnalyticalstyleConceptualstyleBehavioralstyle20PersonalDecisionFrameworkSituation:Programmed/non-programmedClassical,administrative,politicalDecisionstepsDecisionChoice:BestSolutiontoProblemPersonalDecisionStyle:DirectiveAnalyticalConceptualBehavioral21DirectiveStylePeoplewhoprefersimple,clear-cutsolutionstoproblemsMakedecisionsquicklyMayconsideronlyoneortwoalternativesEfficientandrationalPreferrulesorprocedures22AnalyticalStyleComplexsolutionsbasedonasmuchdataastheycangatherCarefullyconsideralternativesBasedecisiononobjective,rationaldatafrommanagementcontrolsystemsandothersourcesSearchforbestpossibledecisionbasedoninformationavailable23ConceptualStyleConsiderabroadamountofinformationMoresociallyorientedthananalyticalstyleLiketotalktoothersabouttheproblemandpossiblesolutionsConsidermanybroadalternativesRelayoninformationfrompeopleandsystemsSolveproblemscreatively24BehavioralStyleHaveadeepconcernforothersasindividualsLiketotalktopeopleone-on-oneUnderstandtheirfeelingsabouttheproblemandtheeffectofagivendecisionuponthemConcernedwiththepersonaldevelopmentofothersMaymakedecisionstohelpothersachievetheirgoalsExperientialExercise:What’sYourPersonalDecisionStyle?25ParticipationinDecisionMakingHelpsgaugetheappropriateamountofparticipationforsubordinatesinprocessLeaderParticipationStylesFivelevelsofsubordinateparticipationindecisionmakingrangingfromhighlyautocratictohighlydemocraticVroom-JagoModel26ParticipationinDecisionMakingDiagnosticQuestionsDecisionparticipa

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