2. Decision Making
Programmed Decision
◦ Routine, virtually automatic decision making
that follows established rules or guidelines.
Managers have made the same decision many
times before
Little ambiguity involved
7-2
3. Decision Making
Non-Programmed Decisions
◦ Nonroutine decision made in response to
unusual or novel opportunities and threats.
◦ The are no rules to follow since the decision is
new.
Decisions are made based on information, and a
manager’s intuition, and judgment.
7-3
4. Decision Making
Intuition
◦ feelings, beliefs, and hunches that come readily
to mind, require little effort and information
gathering and result in on-the-spot decisions
7-4
5. Decision Making
Reasoned judgment
◦ decisions that take time and effort to
make and result from careful information
gathering, generation of alternatives, and
evaluation of
alternatives
7-5
6. Step 1. Define the Problem
1.
2.
Start by writing down your initial
assessment of the problem.
Dissect the problem.
◦ What triggered this problem (as I’ve
assessed it)?
◦ Why am I even thinking about solving
this problem?
◦ What is the connection between the
trigger and the problem?
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7. Step 2. Clarify Your
Objectives
1.
2.
3.
4.
5.
Write down all the concerns you hope to
address through your decision.
Convert your concerns into
specific, concrete objectives.
Separate ends from means to establish
your fundamental objectives.
Clarify what you mean by each objective.
Test your objectives to see if they capture
your interests.
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8. Step 3. Identify Alternatives
1.
2.
3.
4.
Generate as many alternatives as
you can yourself.
Expand your search, by checking
with other people, including experts.
Look at each of your objectives and
ask, ―how?‖
Know when to stop.
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9. Step 4. Analyze the
Consequences
Mentally put yourself into the future.
1.
◦
Process Analysis
Solving problems by thinking through the process
involved from beginning to end, imagining, at each
step, what actually would happen.
Eliminate any clearly inferior alternatives.
3. Organize your remaining alternatives into a
table (matrix) that provides a
concise, bird's-eye view of the
consequences of pursuing each alternative.
2.
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11. Step 5. Make a Choice
Analyses are useless unless the right
choice is made.
◦ Under perfect conditions, simply review
the consequences of each
alternative, and choose the alternative
that maximizes benefits.
◦ In practice, making a decision—even a
relatively simple one like choosing a
computer—usually can’t be done so
accurately or rationally.
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12. How To Make Better Decisions
Increase Your Knowledge
1.
◦
◦
◦
◦
◦
Ask questions.
Get experience.
Use consultants.
Do your research.
Force yourself to recognize the facts when you
see them (maintain your objectivity).
Use Your Intuition
2.
◦
A cognitive process whereby a person
instinctively makes a decision based on his or
her accumulated knowledge and experience.
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13. Are You More Rational or More
Intuitive?
Source: Adapted and reproduced by permission of the Publisher, Psychological Assessment Resources. Inc., Odessa FL
33556, from the Personal Style Inventory by William Taggart, Ph.D., and Barbara Hausladen. Copyright 1991, 1993 by PAR, Inc.
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FIGURE 3–2
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14. How To Make Better Decisions
(cont’d)
3.
Weigh the Pros and Cons
◦
4.
Don’t Overstress the Finality of Your
Decision
◦
◦
5.
Quantify realities by sizing up your
options, and taking into consideration the
relative importance of each of your objectives.
Remember that few decisions are forever.
Knowing when to quit is sometimes the
smartest thing a manager can do.
Make Sure the Timing Is Right
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15. Decision Matrix
Use weights to provide adjustments
for importance of criteria
Often subjective, but helps to prioritize
FIGURE 3–3
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16. Creativity and Decision Making
Creativity
◦ The process of developing
original, novel responses to a
problem.
Brainstorming
Creativity
◦ A creativity-stimulating
technique in which prior
judgments and criticisms are
specifically forbidden from
being expressed in order to
encourage the free flow of
ideas which are encouraged.
Creativity
skills
Expertise
Task motivation
Nominal group technique
◦ A decision-making technique
in which group members are
physically present but operate
independently
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17. Nominal Group Technique
Each participant contributes individual
ideas
Ideas are then ranked individually
Totals are summed for final rank
http://www.ryerson.ca/~mjoppe/ResearchProcess/841TheNominalGroupTechnique.htm
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18. Checklist 3.4
How to be More Creative
Create a culture of creativity.
Encourage brainstorming.
Suspend judgment.
Get more points of view.
Provide physical support for
creativity.
Encourage anonymous input.
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19. Decision-making Shortcuts and
Traps
Using a Heuristic
◦ Applying a rule of thumb or an approximation as
a shortcut to decision making.
Anchoring
◦ Unconsciously giving disproportionate weight to
the first information available.
Adopting a Psychological Set
◦ The tendency to rely on a rigid strategy or
approach when solving a problem.
Perception (Personal Bias)
◦ The unique way each person defines
stimuli, depending on the influence of past
experiences and the person’s present needs and
personality.
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20. Organizational Learning and
Creativity
Creativity
◦ The ability of the decision maker to discover
novel ideas leading to a feasible course of
action.
A creative management
staff and employees are
the key to the learning
organization.
720
22. Self-Check: Using Creativity to Find a
Solution
* Create a decision matrix to find alternative
solutions to the problem: Choosing a course for
college
Source: Applied Human Relations, 4th ed., by Benton/Halloran cW 1991.
Reprinted by permission of Prentice-Hall, Upper Saddle River, NJ.
FIGURE 3–6
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