Quản trị kinh doanh - Chapter 9: Managerial decision making

Managerial Decision MakingChapter 91Managerial Decision MakingDecision making is not easyIt must be done amid ever-changing factors unclear information conflicting points of viewManager’s Challenge: Tupperware2Managerial Decision MakingDecision CharacteristicsDecision-making ModelsSteps Executives Take Making Important DecisionsParticipative Decision MakingTechniques for Improving Decision Making in Today’s OrganizationsTopicsChapter 93Decisions and Decision MakingDecision = choice made from available alternativesDecision Making = process of identifying problems and opportunities and resolving them4Categories of DecisionsProgrammed DecisionsSituations occurred often enough to enable decision rules to be developed and applied in the futureMade in response to recurring organizational problemsNonprogrammed Decisions – in response to unique, poorly defined and largely unstructured, and have important consequences to the organizationEthical Dilemma: The No-Show Consultant5Decisions and Decision MakingMany decisions that managers deal with every day involve at least some degree of uncertainty and require nonprogrammed decision makingMay be difficult to makeMade amid changing factorsInformation may be unclearMay have to deal with conflicting points of view6Certainty, Risk, Uncertainty, Ambiguity Certaintyall the information the decision maker needs is fully availableRiskdecision has clear-cut goalsgood information is availablefuture outcomes associated with each alternative are subject to chanceUncertaintymanagers know which goals they wish to achieveinformation about alternatives and future events is incompletemanagers may have to come up with creative approaches to alternativesAmbiguityby far the most difficult decision situationgoals to be achieved or the problem to be solved is unclearalternatives are difficult to defineinformation about outcomes is unavailable7Conditions that Affect the Possibility of Decision FailureOrganizationalProblemProblemSolutionLowHighPossibility of FailureCertaintyRiskUncertaintyAmbiguityProgrammedDecisionsNonprogrammedDecisions8Selecting a Decision Making ModelDepends on the manager’s personal preferenceWhether the decision is programmed or non-programmedExtent to which the decision is characterized by risk, uncertainty, or ambiguity9Three Decision-Making Models Classical Model Administrative Model Political Model10Classical ModelAssumptionsDecision maker operates to accomplish goals that are known and agreed uponDecision maker strives for condition of certainty – gathers complete informationCriteria for evaluating alternatives are knownDecision maker is rational and uses logicNormative = describes how a manager should and provides guidelines for reaching an ideal decisionLogical decision in the organization’s best economic interests11Administrative ModelTwo concepts are instrumental in shaping the administrative modelBounded rationality: people have limits or boundaries on how rational they can beSatisficing: means that decision makers choose the first solution alternative that satisfies minimal decision criteriaHerbert A. SimonHow nonprogrammed decisions are made--uncertainty/ambiguity12Administrative ModelManagers actually make decisions in difficult situations characterized by non-programmed decisions, uncertainty, and ambiguityDecision goals often are vague, conflicting and lack consensus among managers; Rational procedures are not always usedManagers’ searches for alternatives are limitedManagers settle for a satisficing rather than a maximizing solutionintuition, looks to past experienceDescriptive = how managers actually make decisions--not how they shouldHow nonprogrammed decisions are made--uncertainty/ambiguity13Political ModelClosely resembles the real environment in which most managers and decision makers operateUseful in making non-programmed decisionsDecisions are complexDisagreement and conflict over problems and solutions are normalCoalition = informal alliance among manages who support a specific goalClosely resembles the real environment 14Characteristics of Classical, Political, and Administrative Decision Making Models Classical Model Administrative Model Political ModelClear-cut problem and goals Vague problem and goals Pluralistic; conflicting goalsCondition of certainty Condition of uncertainty Condition of uncertainty/ambiguityFull information about Limited information about Inconsistent viewpoints; ambiguous alternatives and their outcomes Alternatives and their outcomes informationRational choice by individual Satisficing choice for resolving Bargaining and discussion among for maximizing outcomes problem using intuition coalition members15Six Steps in the ManagerialDecision-Making ProcessEvaluationandFeedbackDiagnosisand Analysisof CausesRecognition ofDecisionRequirementDevelopment ofAlternativesSelection ofDesired AlternativeImplementationof ChosenAlternativeDecision-MakingProcess16Diagnosis and Analysis of CausesDiagnosis = analyze underlying causal factors associated with the decision situationManagers make a mistake if they jump into generating alternatives without first exploring the cause of the problem more deeply17Underlying Causes - Kepner /Tregoe What is the state of disequilibrium affecting us?When did it occur?Where did it occur?How did it occur?To whom did it occur?What is the urgency of the problem?What is the interconnectedness of events?What result came from which activity?18Selection of Desired AlternativesRisk Propensity = willingness to undertake risk with the opportunity of gaining an increased payoffImplementation = using managerial, administrative, and persuasive abilities to translate the chosen alternative into action19Decision StylesDifferences among people with respect to how they perceive problems and make decisionsNot all managers make decisions the same Directive styleAnalytical styleConceptual styleBehavioral style20Personal Decision FrameworkSituation:Programmed/non-programmedClassical, administrative, politicalDecision stepsDecision Choice:Best Solution to ProblemPersonal Decision Style:DirectiveAnalyticalConceptualBehavioral21Directive StylePeople who prefer simple, clear-cut solutions to problemsMake decisions quicklyMay consider only one or two alternativesEfficient and rationalPrefer rules or procedures 22Analytical StyleComplex solutions based on as much data as they can gatherCarefully consider alternativesBase decision on objective, rational data from management control systems and other sourcesSearch for best possible decision based on information available23Conceptual StyleConsider a broad amount of informationMore socially oriented than analytical styleLike to talk to others about the problem and possible solutionsConsider many broad alternativesRelay on information from people and systemsSolve problems creatively24Behavioral StyleHave a deep concern for others as individualsLike to talk to people one-on-oneUnderstand their feelings about the problem and the effect of a given decision upon themConcerned with the personal development of othersMay make decisions to help others achieve their goalsExperiential Exercise: What’s Your Personal Decision Style?25Participation in Decision MakingHelps gauge the appropriate amount of participation for subordinates in processLeader Participation StylesFive levels of subordinate participation in decision making ranging from highly autocratic to highly democraticVroom-Jago Model26Participation in Decision MakingDiagnostic QuestionsDecision participation depends on the responses to seven diagnostic questions aboutthe problem the required level of decision quality the importance of having subordinates commit to the decisionVroom-Jago Model27Seven Leader Diagnostic QuestionsHow significant is the decision?How important is subordinate commitment?What is the level of the leader’s expertise?If the leader were to make the decision alone at what level would subordinates be committed to the decision?What level is the subordinate’s support for the team or organization’s objectives?What is the member’s level of knowledge or expertise relative to the problem?How skilled or committed are group members to working together?28New Decision Approaches for Turbulent TimesLearn, Don’t PunishKnow When to BailPractice the Five WhysEngage in Rigorous DebateBrainstormingNew Decision Approaches for Turbulent Times29