powerpoint help

MGMT 300 Integrated Core: Management

Types of Decisions and Consensus

What is a Decision and What is Decision Making?

Decision:

A choice made between two or

more alternatives

Decision Making:

The process of choosing the best

alternative for reaching

objectives

Two Types of Decisions

Programmed Decision

• Routine and repetitive. Org develops specific ways to handle these decisions

Non-programmed Decision • One-shot decision, less-structured, typically requires

more time and effort

Two Factors for Making Decisions

Scope of the decision

Level of management

Two Factors for Making Decisions

Scope of the decision: proportion of the total management system that the decision will affect.

Greater proportion = greater scope

Two Factors for Making Decisions Levels of management: lower, middle, or upper

Certo, S.C., Certo, S.T. (2016). Modern Management, Concepts & Skills (14th Edition). Boston: Pearson.

Making Decisions

Consensus: an agreement by all individuals involved in making that decision.

• Usually involves lengthy discussion

• May ask for input from only managers or mix of managers and other employees

Making Decisions Advantages of

Consensus • Many people focused

on decision.

• Employees more committed to decision when involved with making it.

Disadvantages of Consensus

• Group may not be able to come to unanimous decision

• Could be time-consuming

MGMT 300 Integrated Core: Management

Elements of a Decision

Elements of a Decision Decision Makers Goals Relevant Alternatives

Ordering of Alternatives Choice of Alternatives

Elements of a Decision

The Decision Makers: people making the decision

Ideal decision maker  • Uses all of his/her talents when making a decision • Understands the organization’s potential • Uses sound judgment and reason

Decision Makers Goals Relevant Alternatives

Ordering of Alternatives Choice of Alternatives

Elements of a Decision

The Goals to be Served: • Goal to be achieved • Most often organizational objectives

Decision Makers Goals Relevant Alternatives

Ordering of Alternatives Choice of Alternatives

Elements of a Decision

Relevant Alternatives: alternatives that are considered feasible solutions for solving an existing problem

Decision Makers Goals Relevant Alternatives

Ordering of Alternatives Choice of Alternatives

Elements of a Decision

Ordering of Alternatives: The ranking of possible alternatives based on desirability

Decision Makers Goals Relevant Alternatives

Ordering of Alternatives Choice of Alternatives

Elements of a Decision

Choice of Alternatives: selecting an alternative and establishing the decision

Decision Makers Goals Relevant Alternatives

Ordering of Alternatives Choice of Alternatives

MGMT 300 Integrated Core: Management

The Rational Decision-Making Process

How Do You Choose? Rational Decision-Making Process

How Do You Choose? Rational Decision-Making Process 1. Identify an existing problem

Managers can identify problems by: • Issues raised by managers’ supervisors • Issues raised by managers’ subordinates • Normal activity of managers themselves

How Do You Choose? Rational Decision-Making Process 2. List possible alternatives for solving

the problem and see if any can be ruled out

a) Authority factors: did a higher-up manager rule out an alternative? b) Biological/Human factors: do any human factors rule out alternatives? c) Physical factors: do any physical aspects of the org rule out

alternatives? d) Technological factors: does the level of tech in the org rule out

alternatives? e) Economic factors: are certain alternatives too costly?

MGMT 300 Integrated Core: Management

Paradox of Choice and Selecting the Best Alternative

Paradox of Choice

Is having a lot of alternatives a good or bad thing?

Paradox of Choice

Too many alternatives

Less effective decision making

Likely because too many alternatives leads to decreased motivation to make a decision

How Do You Choose? Selecting the Best Alternative

1. List out possible effects of each alternative

2. Decide how probable each effect will be

3. Compare both effect and probability to make a decision

How Do You Choose?

After decision is made, implement chosen alternative

How Do You Choose? Gather Feedback

• Find out whether the chosen solution is actually solving the problem

• If problem is not being solved, need to find another alternative

MGMT 300 Integrated Core: Management

Bounded Rationality and Types of Thinking

Do Managers Always Make The Best Decisions? Bounded rationality: managers do not always have access to the resources required to make rational decisions

• When bounded rationality  satisficing occurs

Satisficing: decision is made that is not optimal but is “good enough”

Decision Making: System 1 and System 2 Thinking

System 2: deliberate, comprehensive, and slow

System 1: fast, automatic, and intuitive

MGMT 300 Integrated Core: Management

Decision-Making Biases

Decision Making Biases

Biases: departures from rational thinking often results in poor decision making.

Decision Making Biases Bandwagon Effect: the tendency to believe certain outcomes will occur because others believe the same thing.

Decision Making Biases

Confirmation Bias: tendency to search for information that supports one’s beliefs and ignore information that contradicts already-held beliefs

Decision Making Biases Unrealistic Optimism: tendency to believe that you are less susceptible to risky events than others

Decision Making Biases

Availability Bias: use of info that is readily available from memory to make judgments.

Decision Making Biases Representativeness Bias: tendency to generalize from a small sample or a single event.

Decision Making Biases

Framing Bias: tendency of decision makers to be influenced by the way a situation is presented.

Would you choose this doctor?

• Out of 100 patients who had this operation, ninety are still alive after five years.

• Out of 100 patients who had this operation, ten were dead before the end of five years

Decision Making Biases Framing Bias: tendency of decision makers to be influenced by the way a situation is presented.

https://www.hy-vee.com/aisles-online/p/31819/Fresh-Ground-Beef-80-Lean-20-Fat

MGMT 300 Integrated Core: Management

Group Decision Making

Group Decision Making

Managers may also be able to use groups to help make decisions!

Group Decision Making

Why might using groups

to make decisions be good? Bad?

Group Decision Making Advantages

• Groups can generally come up with more and better alternatives than individuals alone.

Disadvantages

• Takes longer to make a decision.

• Members of the group can support the decision.

• Members feel ownership over their decision.

• Group decisions cost more because of time of all individuals involved.

• Decision can be contaminated by certain group members.

How can groups make decisions: Brainstorming Brainstorming: Negative feedback forbidden until all members have presented alternatives that they perceive as valuable

• Encourages all group members to participate

• If evaluation starts too early, potential alternatives may be overlooked

How Can Groups Make Decisions: Nominal Group Technique

1. Each group member writes down ideas.

2. Each member presents ideas.

3. Entire group discusses ideas together.

4. Secret ballot after all discussion is completed. Idea with most votes is chosen.

Nominal Technique

How Can Groups Make Decisions: Delphi Group Technique

1. Problem is identified.

2. Group members asked to provide anonymous responses to surveys.

3. Responses compiled and sent to all members.

4. Individuals asked to generate a new solution that has not yet been generated.

5. Step 3 and 4 repeated until consensus is reached.

Delphi Technique

Group Decision Making: Advantages to Group Decision Making

Encourages as many useful ideas as possible.

Brainstorming

• Group members can offer input without fear of judgement

Nominal

• Ideas can be gathered from members who are not in the same location

Delphi

Group Decision Making: Disadvantages to Group Decision Making

• Time wasted on ideas that are impractical.

Brainstorming

• No way for individual group members to know why others voted the way they did.

Nominal

• Members are unable to ask questions of one another.

Delphi