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Chapter4.pptxStudent Version
The Decision Making Process
Recognizing and defining the decision situation
Identifying alternatives
Choosing the “best” alternative
Putting the alternative into practice
© 2016 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
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Types of Decisions
Nonprogrammed decisions
Programmed decisions
Making Decisions
© 2016 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
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Decision-Making Conditions
Decision Making Under Risk
Decision Making Under Uncertainty
Decision Making Under Certainty
Conditions Affecting Decision Making
© 2016 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
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Distinguishing Between Decision Making Conditions
Are there multiple possible outcomes?
Are the probabilities of the outcomes known?
Decision is certain.
Decision is risky.
Decision is uncertain.
Yes
No
Yes
No
© 2016 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
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The Classical Model of Decision Making
When faced with a decision situation, managers should…
obtain complete and perfect information
eliminate uncertainty
evaluate everything logically and rationally
…and end up with a decision that best serves the interests of the organization
© 2016 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
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Steps in the Rational Decision-Making Process
Recognizing and defining the decision situation
Identifying alternatives
Evaluating alternatives
Implementing the chosen alternative
Selecting the best alternative
Implementing the chosen alternative
© 2016 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
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The Administrative Model of Decision Making
When faced with a decision situation, managers actually…
use incomplete and imperfect information
are constrained by bounded rationality
tend to satisfice
…and end up with a decision that may or may not serve the interests of the organization
© 2016 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
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What Influences Decision Making
Satisficing
Bounded rationality
Coalitions
Escalation of commitment
Intuition
Risk propensity
Influences on Decision Making
© 2016 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
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Managerial Ethics and Decision Making
Individual Ethics
Managerial Ethics
Employees
Other economic agents
Organizational Ethics
© 2016 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
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Group and Team Decision Making
Interacting group or team
Delphi groups
Nominal group
Forms of Group Decision Making
© 2016 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
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The Group-think Process
Group Cohesiveness
Leader Promotion of Preferred Solution
Insulation from Expert Opinion
Few Alternatives
No Reexamination of Preferred Alternative
No Reexamination of Rejected Alternative
Rejection of Expert Opinions
Selective Bias of New Information
No Contingency Plans
Lower Performance
Lower Decision Quality
Invulnerability
Rationalization
Morality
Stereotyping
Peer Pressure
Self-censorship
Unanimity
Mindguards
Group Characteristics
Symptoms of Groupthink
Decision-Making Defects
Outcome Variables
© 2016 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
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