Scribd
Upload
32 views19 pages

CH 3 Decision Making

Uploaded by

sumrun sahab
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
32 views19 pages

CH 3 Decision Making

Uploaded by

sumrun sahab
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
You are on page 1/ 19

Chapter 3

Managers
as
Decision Makers

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 6–1


Learning outcomes

• Describe the eight steps in the decision-


making process
• Explain the four ways managers make decisions
• Classify decisions and decision-making
conditions
• Classify decisions and decision-making
conditions
• Identify effective decision-making techniques
Copyright © 2012 Pearson Education,
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter
Inc. Publishing as Prentice Hall ©2012 Pearson Education, Inc. All rights reserved 7-2
Decision Making
• Decision
 Making a choice from two or more alternatives.
• The Decision-Making Process
 Identifying a problem and decision criteria and
allocating weights to the criteria.
 Developing, analyzing, and selecting an alternative
that can resolve the problem.
 Implementing the selected alternative.
 Evaluating the decision’s effectiveness.

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 6–3


The Decision-Making
Process

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 6–4


Step 1: Identifying the Problem
• Problem
 A discrepancy between an existing and desired state
of affairs.
• Characteristics of Problems
 A problem becomes a problem when a manager
becomes aware of it.
 There is pressure to solve the problem.
 The manager must have the authority, information, or
resources needed to solve the problem.

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 6–5


Step 2: Identifying Decision Criteria
• Decision criteria are factors that are important
(relevant) to resolving the problem such as:
 Costs that will be incurred (investments required)
 Risks likely to be encountered (chance of failure)
 Outcomes that are desired (growth of the firm)

Step 3: Allocating Weights to the Criteria


• Decision criteria are not of equal importance:
 Assigning a weight to each item places the items in
the correct priority order of their importance in the
decision-making process.

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 6–6


Criteria and Weights for Computer Replacement
Decision

Criterion Weight
Memory and Storage 10
Battery life 8
Carrying Weight 6
Warranty 4
Display Quality 3

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 6–7


Step 4: Developing Alternatives
• Identifying viable alternatives
 Alternatives are listed (without evaluation) that can
resolve the problem.

Step 5: Analyzing Alternatives


• Appraising each alternative’s strengths and
weaknesses
 An alternative’s appraisal is based on its ability to
resolve the issues identified in steps 2 and 3.

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 6–8


Assessed Values of Laptop
Computers Using Decision Criteria

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 6–9


Step 6: Selecting an Alternative
• Choosing the best alternative
 The alternative with the highest total weight is
chosen.

Step 7: Implementing the


Alternative
• Putting the chosen alternative into action.
 Conveying the decision to and gaining commitment
from those who will carry out the decision.

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 6–10


Evaluation of Laptop Alternatives
Against Weighted Criteria

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 6–11


Step 8: Evaluating the Decision’s
Effectiveness
• The soundness of the decision is judged by its
outcomes.
 How effectively was the problem resolved by
outcomes resulting from the chosen alternatives?
 If the problem was not resolved, what went wrong?

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 6–12


Exhibit: Decisions Managers May Make

Copyright © 2012 Pearson Education,


Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter
Inc. Publishing as Prentice Hall ©2012 Pearson Education, Inc. All rights reserved 7-13
Types of Problems and Decisions
• Structured Problems
 Involve goals that are clear.
 Are familiar (have occurred before).
 Are easily and completely defined—information about
the problem is available and complete.

• Programmed Decision
 A repetitive decision that can be handled by a routine
approach.

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 6–14


Types of Programmed Decisions
• Procedure
 A series of interrelated steps that a manager can use
to respond (applying a policy) to a structured problem.
• Rule
 An explicit statement that limits what a manager or
employee can or cannot do.
• Policy
 A general guideline for making a decision about a
structured problem.

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 6–15


Policy, Procedure, and Rule
Examples
• Policy
 Accept all customer-returned merchandise.

• Procedure
 Follow all steps for completing merchandise return
documentation.

• Rules
 Managers must approve all refunds over $50.00.
 No credit purchases are refunded for cash.
Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 6–16
Problems and Decisions (cont’d)
• Unstructured Problems
 Problems that are new or unusual and for which
information is ambiguous or incomplete.
 Problems that will require custom-made solutions.

• Nonprogrammed Decisions
 Decisions that are unique and nonrecurring.
 Decisions that generate unique responses.

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 6–17


Exhibit 7-7: Programmed Versus
Non-programmed Decisions

Copyright © 2012 Pearson Education,


Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter
Inc. Publishing as Prentice Hall ©2012 Pearson Education, Inc. All rights reserved 7-18
Decision Making for Today’s World
• Guidelines for making effective decisions:
– Understand cultural differences
– Know when it’s time to call it quits
– Use an effective decision making process
• Habits of highly reliable organizations (HROs)
– Are not tricked by their success
– Defer to the experts on the front line
– Let unexpected circumstances provide the solution
– Embrace complexity
– Anticipate, but also anticipate their limits
Copyright © 2012 Pearson Education,
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter
Inc. Publishing as Prentice Hall ©2012 Pearson Education, Inc. All rights reserved 7-19

You might also like