© prentice hall, 2002 7 - 1 modern management 9 th edition
TRANSCRIPT
© Prentice Hall, 2002 7 - 1
Modern Management9th edition
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© Prentice Hall, 2002 7 - 2
Objectives
• A fundamental understanding of the term decision
• An understanding of each element of the decision situation
• An ability to use the decision-making process
• An appreciation for the various situations in which decisions are made
• An understanding of probability theory and decision trees as decision-making tools
• Insights into groups as decision makers
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FUNDAMENTALS OF DECISIONS
Definition of a Decision
Types of Decisions
Programmed
Nonprogrammed
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FUNDAMENTALS OF DECISIONS
Table 7.1Traditional and Modern Ways of Handling
Programmed and Nonprogrammed Decisions
Decision-Making TechniquesTypes of Decisions Traditional ModernProgrammed:
Routine, repetitive decisions 1. Habit 1. Operations research:Organization develops specific 2. Clerical routine: Mathematical analysis modelsprocesses for handling them Standard operating procedures Computer simulation
3. Organization structure: 2. Electronic data processing Common expectations A system of subgoals Well-defined information channels
Nonprogrammed:One-shot, ill-structured, 1. Judgment, intuition, 1. Heuristic problem-solving novel policy decisions and creativity techniques applied to:Handled by general makers 2.Rules of thumb Training human decision problem-solving processes 3.Selection and training Constructing heuristic
of executives computer programs
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FUNDAMENTALS OF DECISIONS
Figure 7.1Decision programming continuum
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FUNDAMENTALS OF DECISIONS
The Responsibility for Making Organizational Decisions
Scope of the decision
Broader scope
Consensus
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FUNDAMENTALS OF DECISIONS
Figure 7.2Level of managers responsible for making decisions
as decision scope increases from A to B to C.
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FUNDAMENTALS OF DECISIONS
Figure 7.3How scope of decision affects management levelmaking decision at DuPont
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FUNDAMENTALS OF DECISIONS
Elements of the Decision Situation
The Decision Makers
Goals To Be Served
Relevant Alternatives
Ordering of Alternatives
Choice of Alternatives.
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THE DECISION-MAKING PROCESS
Figure 7.4Model of the decision-making process
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THE DECISION-MAKING PROCESS
Identifying an Existing ProblemManagers learn of problems by:
Orders from superiorsSituations relayed by subordinatesNormal activity
Listing Alternative SolutionsAuthority factorsBiological or human factorsPhysical factorsTechnological factorsEconomic factors
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THE DECISION-MAKING PROCESS
Figure 7.5Additional factors that limit
a manager’s number of acceptable alternatives
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THE DECISION-MAKING PROCESS
Selecting the Most Beneficial Alternative
Implementing the Chosen Alternative
Gathering Problem-Related Feedback.
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DECISION-MAKING CONDITIONS
Complete Certainty Condition
Complete Uncertainty Condition
Risk Condition.
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DECISION-MAKING TOOLS
Probability Theory
Expected value (EV = I × P)
Decision Trees
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DECISION-MAKING TOOLS
Figure 7.6Expected values from locating surfboard rental store
in each of three possible locations
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DECISION-MAKING TOOLS
Figure 7.7A basic decision tree illustrating
the decision facing Stygian management.
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GROUP DECISION MAKING
Advantages and Disadvantages of Using Groups to Make Decisions
Advantages:
More and better alternatives than individual
Implementation supported more fervently
Disadvantages:
Takes longer
Costs the organization more
Lower quality if contaminated (Groupthink)
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GROUP DECISION MAKING
Processes for Making Group Decisions
Brainstorming
Nominal Group Technique
1. Writes down individual ideas
2. Presents individual ideas orally
3. Entire group discusses ideas
4. Secret ballot is taken
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GROUP DECISION MAKING
Processes for Making Group Decisions (con’t)
Delphi Technique1. Identify problem
2. Offer solutions anonymously
3. Compile and send responses
4. Generate new solutions
5. Repeat 3 and 4 until consensus reached
Evaluating Group Decision-Making Processes
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GROUP DECISION MAKING
Figure 7.8The brainstorming process
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Chapter Seven
Questions