Unit 10.

1: Types of Decisions

Programmed and non-programmed decisions

A decision is a choice made from available alternatives whereas decision-making is the process
of identifying problems and opportunities and then resolving them. Decision-making involves
effort before, during and after the actual choice.
Managers confront a decision requirement in the form of either a problem or an opportunity.
A problem occurs when organizational performance is less than the set goals or some aspect of
performance is unsatisfactory. An opportunity exists when managers see potential that will help
to exceed set current goals i.e. managers see the possibility of enhancing performance beyond
current levels.
Management decisions typical fall into two categories: programmed and non-programmed.
Programmed decisions involve situations that have occurred often enough to enable decision
rules to be developed and applied in the future. Programmed decisions are made in response to
recurring organizational problems. for example, the decision to reorder stock when inventories
drop to a certain level is a programmed decision.
Non-programmed decisions are made in response to situations that are unique, are weakly
defined and largely unstructured, and have important consequences from the organization. Many
non-programmed decisions are related to strategic planning because uncertainty is great and
decisions are complex. For example, a decision to acquire a company or develop a new products
or service are non-programmed decisions.

Facing certainty and uncertainty

One primary difference between programmed and non-programmed decisions relates to the
degree of certainty or uncertainty that managers deal with when making decisions. In a ideal
world a managers will have all the information required to make a decision, however, in practice
this is rarely true and often there are many unknowns. This means a degree of risk and ambiguity
is involved when making decisions and the possibility of failure can increase. Depending on the
information available, a routine programmed decision can become a non-programmed decision.
This is can be seen in the diagram below (Daft, Benson and Henry,2020).
10.2: Decision making models

1. Classical model
This model is considered to be normative and defines how a decision-maker should make
decisions as it provides guidelines on how to reach an ideal outcome for the organization. This
model is most useful when applied to programmed decisions and to decisions characterized by
certainty or risk because the relevant information is available and probabilities can be
calculated.
2. Administrative model
This model is considered to be descriptive in nature as it describes how managers make decisions
in complex situations. The model recognizes human and environmental limitations that affect the
degree to which managers can pursue a rational decision-making process.

3. Political model
This model is useful for making non-programmed decisions when conditions are uncertain,
information is limited and there are manager conflicts about what goals to pursue or what course
of action to take. Most organizational decisions involve many managers who often pursue
different goals but still have to discuss, share information and reach an agreement. Often
coalitions (informal alliances) are formed in order to make complex organizational decisions.

There are many decision-making models, such as Rational Bounded model, Liner Decision-
making model, Intuitive Decision-making model and Garbage Can model. One such framework
is called the rational Decision-making model (see diagram below). This model consists of 8-steps
from identifying a problem to evaluating options and assessing the success, or otherwise, of the
implementation. This model assumes decisions are based on an objective, orderly, structured
information gathering and in an analytical manner. The model encourages the decision maker to
understand the situation, organize and interpret the information and then take appropriate action.
10.3: Decision making steps

Whether a decision is programmed or non-programmed and regardless of a manager's choice of

classical, administrative or political model of decision-making, six steps are typically associated
with effective decision-making process. These are summarized on the diagram below.

1. Recognition of Decision Requirement

Awareness of a problem or opportunity is the first step in the decision sequence and requires
analysis of the internal and external environment for issues that merit management attention.
Managers scan the environment around them to determine whether the organization is
satisfactorily progressing toward its goals or not.
Some of this information comes from periodic financial reports, performance reports, and other
sources that are designed to discover problems before they become too serious. Experienced
managers also make use of informal sources. They talk to their colleagues, gather opinions on
how things are going and seek advice on which problems should be tackled or which
opportunities should be embraced.
2. Diagnosis and Analysis of Causes
Once a problem or opportunity comes to a manager’s attention, the understanding of the
situation should be refined. Diagnosis is the step in the decision-making process in which
managers analyse underlying causal factors associated with the decision situation. Managers can
make a mistake here if they jump straight into generating alternatives without first exploring the
cause of the problem more deeply.
Kepner and Tregoe, a consultancy firm that conducted extensive studies of manager decision
making, recommend that managers ask a series of questions to specify underlying causes,
including the following:

 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?

Such structured questions help to specify what actually happened and why.
3. Development of Alternatives
After the problem or opportunity has been recognised and analysed, decision makers begin to
consider what action to take. At this stage managers must generate all the possible alternative
solutions that can respond to the needs of the situation and correct the underlying causes. Limited
choice of alternatives is often a primary cause of decision failure in organisations.
For a programmed decision, feasible alternatives are easy to identify and, in fact, usually are
already available within the organisation’s rules and procedures. Non-programmed decisions,
however, require developing new courses of action that will meet the company’s needs. For
decisions made under conditions of high uncertainty, managers may develop only one or two
customised solutions that will satisfice for handling the problem.
Decision alternatives can be thought of as the tools for reducing the difference between the
organisation’s current and desired performance. Smart and experienced managers will tap into
the knowledge of people thoughout the organisational hierarchy for decision alternatives.
4. Selection of the Desired Alternatives
After feasible alternatives are developed, the most promising of several alternative courses of
action must be selected. The best alternative is one in which the solution best fits the overall
goals and values of the organisation and achieves the desired results using the fewest resources.
This choice must also carry the least amount of risk and uncertainty. Basing choices on overall
goals and values can also effectively guide the selection of alternatives.
Choosing among alternatives also depends on managers’ personality factors and willingness to
accept risk and uncertainty. For example, risk propensity is the willingness to undertake risk
with the opportunity of gaining an increased payoff. The level of risk a manager is willing to
accept will influence the analysis of cost and benefits to be derived from any decision.
5. Implementation of the Chsen Alternatives
The implementation stage involves the use of managerial, administrative, and persuasive abilities
to ensure that the chosen alternative is carried out. This step is similar to the idea of a strategy
implementation. The ultimate success of the chosen alternative depends on whether it can be
translated into action. Sometimes an alternative never becomes reality because managers lack the
resources or motivation needed to make things happen. Implementation often requires
discussions with people affected by the decision. Communication, motivation, and leadership
skills must be used to see that the decision is carried out. When employees see that managers
follow up on their decisions by tracking implementation success, they are more committed to
positive action.
6. Evaluation and Feedback
In the evaluation stage of the decision process, decision makers gather information that tells
them how well the decision was implemented and whether it was effective in achieving its
goals.
Feedback is important because decision making is a continuous process. Feedback provides
decision makers with information that can precipitate a new decision cycle. The decision may
fail, thus generating a new analysis of the problem, evaluation of alternatives, and selection of a
new alternative. Many big problems are solved by trying several alternatives in sequence, each
providing modest improvement. Feedback is the part of monitoring that assesses whether a new
decision needs to be made.
10.4 Innovative decision making

1. Start with brainstorming

2. Use hard evidence
3. Engage in rigorous debate
4. Avoid groupthink
5. Know when to bail out
6. Do a post-mortem

(details in canvas if necessary)

8.2: Diversity and Personal Bias

A. FACTORS SHAPING PERSONAL BIAS

Prejudice
Discrimination
Stereotypes

Prejudice is the tendency to view people who are different as being deficient.

Discrimination occurs when people act out their prejudicial attitudes toward other people
who are targets of their prejudice. Although blatant discrimination is not as widespread as in
the past, bias in the workplace often shows up in subtle ways. A stereotype is a rigid,
exaggerated, irrational belief associated with a particular group of people. To be successful
managing diversity, managers need to eliminate harmful stereotypes from their thinking,
shedding any biases that negatively affect the workplace.

Stereotype threat describes the psychological experience of a person who, usually

engaged in a task, is aware of a stereotype about his or her identity group suggesting that he
or she will not perform well on that task. People most affected by stereotype threat are those
we consider as disadvantaged in the workplace due to negative stereotypes–racial and
ethnic minorities, members of lower socioeconomic classes, women, older people, gay and
lesbian individuals, and people with disabilities.

B. Ethnocentrism
Ethnocentrism is the belief that one’s own group and subculture are inherently superior to
other groups and cultures, thus making it difficult to value diversity. The business world
tends to reflect values, behaviours, and assumptions based on the experiences of a
homogeneous, white, middle-class, male workforce. Most management theories presume
workers share similar values, beliefs, motivations, and attitudes about work and life in
general.

Ethnocentric viewpoints produce a monoculture that accepts only one way of doing things
and one set of values and beliefs. These assumptions create a dilemma for people of colour,
women, gay people, disabled, the elderly, and others who feel pressure to conform and are
presumed deficient because of differences. Valuing diversity means ensuring that all people
are given equal opportunities in the workplace.

The goal for organizations seeking cultural diversity is pluralism rather than a monoculture
and ethno relativism rather than ethnocentrism. Ethno relativism is the belief that groups
and subcultures are inherently equal. Pluralism means an organization accommodates
several subcultures. It seeks to fully integrate into the organization the employees who feel
isolated and ignored. Most organizations are making a conscious effort to shift from a
monoculture to pluralism
8.3: Diversity Initiatives

Diversity Initiatives and programs

A. Changing Structures and Policies

Many leading companies are changing structures and policies to facilitate and
support a diverse workforce. A survey found that 85 percent of companies surveyed
in America have formal policies against racism and sexism, and 76 percent have
structured grievance and complaint processes.

B. Expanding Recruiting Efforts

A new approach to recruitment means making better use of recruiting strategies,
offering internship programs to give people opportunities, and developing creative
ways to draw on previously unused labor markets.

C. Establishing Mentor Relationships

One of the most successful structures for eliminating the glass ceiling is the
mentoring relationship. A mentor is a higher-ranking organizational member who is
committed to providing upward mobility and support to a protégé’s professional
career. Mentoring provides minorities and women with direct training and inside
information on the norms and expectations of the organization.

D. Accommodating Special Needs

Many top managers are often unaware of the special needs of employees who are
single parents, are non-English-speaking, or have elderly parents. Alternative work
scheduling may be important for these groups of workers. Another issue is that
racial/ethnic minorities and immigrants have had fewer educational opportunities
than other groups. Some companies work with high schools to provide fundamental
skills in literacy and math, or the provide programs within the company to upgrade
employees to appropriate educational levels.

E. Providing Diversity Skills Training

Most of today’s organizations provide special training, called diversity training, to help
people identify their own cultural boundaries, prejudices, and stereotypes and
develop the skills for managing and working in a diverse workplace. Working or
living within a multicultural context requires a person to use interaction skills that
transcend the skills typically effective when dealing with others from one’s own
group. The first step is typically diversity awareness training to make employees aware
of the assumptions they make and to increase people’s sensitivity and openness to
those who are different from them. The next step is diversity skills training to help
people learn how to communicate and work effectively in a diverse environment.

NEW DIVERSITY INITIATIVES

A. Multicultural Teams
Multicultural teams are made up of members from diverse national, racial, ethnic, and
cultural backgrounds. These teams provide even greater potential for enhanced
creativity, innovation, and value in today’s global marketplace. Diverse teams tend to
generate more and better alternatives to problems and produce more creative
solutions than do homogeneous teams.
Multicultural teams are more difficult to manage because of the increased potential
for miscommunication and misunderstanding. Multicultural teams typically have
more difficulty learning to communicate and work well together, but with effective
cross-cultural training and good management, the problems seem to dissipate over
time.

B. Employee Network Groups

Employee network groups are based on social identity, such as gender or race, and
are organized by employees to focus on concerns of employees from that group.
The idea behind network groups is that minority employees can join together for
mutual support and to extend member influence in the organization. Network groups
pursue a variety of activities, such as meetings to educate top managers, mentoring
programs, networking events, training sessions and skills seminars, minority intern
programs, and community volunteer activities.
Employees, not the organization, form network groups, and membership is
voluntary; however, successful organizations support and encourage network
groups. Although network groups seem to be in direct opposition to the trend toward
multicultural teams, the two mechanisms actually work quite well together.

Models that moderate workplace diversity

Categorization-Elaboration model moderates WD. There are empirical evidences (search info
for this if this is useful)