Organizational Behavior and Management Sixth Edition lvanceyich Matteson
McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved
CHAPTER 14 Decision Making CONTRAST programmed with nonprogrammed decisions IDENTIFY the steps in the decision-making process dIScUSs priority setting dESCRibE the conditions governing alternative- outcomes relationships .eXPLain the role of behavioral influences on decision making COMPARE individual and group decision making IDENTIFY Specific techniques for stimulating creativity
McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. 14 C H A P T E R Decision Making ⚫CONTRAST programmed with nonprogrammed decisions. ⚫IDENTIFY the steps in the decision-making process. ⚫DISCUSS priority setting. ⚫DESCRIBE the conditions governing alternativeoutcomes relationships. ⚫EXPLAIN the role of behavioral influences on decision making. ⚫COMPARE individual and group decision making. ⚫IDENTIFY specific techniques for stimulating creativity
14-3 Types of Decisions Programmed|制upm Repetitive and routine Novel and unstructured decisions and where a decisions required for definitive procedure is unique and complex developed to handle them. management problems. Mcgraw-hillarwin Copyright o 2002 by The McGraw-Hill Companies, Inc. All rights reserved
McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. 14-3 Types of Decisions Repetitive and routine decisions and where a definitive procedure is developed to handle them. Novel and unstructured decisions required for unique and complex management problems
Attributes of of Decisions o Decisions should be thought of as a means rather than enas o Decisions are the organizational mechanism through which an attempt is made to achieve a desired state o Decisions are in effect, an organizational response to a problem o every decision is the outcome of a dynamic process influenced by many forces Mcgraw-hillarwin Copyright@ 2002 by The McGraw-Hill Companies, Inc. All rights reserved
McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. 14-4 Attributes of of Decisions ⚫ Decisions should be thought of as a means rather than ends. ⚫ Decisions are the organizational mechanism through which an attempt is made to achieve a desired state. ⚫ Decisions are, in effect, an organizational response to a problem. ⚫ Every decision is the outcome of a dynamic process influenced by many forces
14-5 A Rational Decision-Making Process Establishing Problem specific goals and identification and Establishing objectives and definition Revise priorities measuring results Revise Evaluation of Consideration Development of alternative alternative of causes Revise solutions Revise solutions Solution Selection Implementation Follow-up Revise Revise Mcgraw-hillarwin Copyright @2002 by The McGraw-Hill Companies, Inc. All rights reserved
McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. 14-5 A Rational Decision-Making Process Establishing specific goals and objectives and measuring results Problem identification and definition Establishing priorities Revise Revise Consideration of causes Development of alternative solutions Evaluation of alternative Revise Revise solutions Implementation Follow-up Revise Revise Solution Selection
14-6 Problem Identification and Definition Factors Affecting Problem Identification Perceptual Problems Defining Problems in Terms of solutions Identifying symptoms as Problems Mcgraw-hillarwin Copyright o 2002 by The McGraw-Hill Companies, Inc. All rights reserved
McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. 14-6 Problem Identification and Definition Defining Problems in Terms of Solutions Identifying Symptoms as Problems Factors Affecting Problem Identification: Perceptual Problems
14-7 Establishing Priorities Involves Considering Three Issues: Urgency Relates to time Impact Seriousness of the problem's effects Growth Tendency Addresses future considerations. Megraw-Hillarwin Copyright o 2002 by The McGraw-Hill Companies, Inc. All rights reserved
McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. 14-7 Involves Considering Three Issues: Urgency Relates to time. Impact Seriousness of the problem’s effects. Establishing Priorities Growth Tendency Addresses future considerations
14-8 AlIternative-Outcome Relationship POSSIBLE CONDITIONS Certainty Complete knowledge of the probability of the outcome ofeach alternative Uncertaint Absolutely no knowledge ofthe probability of the outcome ofeach alternative Risk Some probabilistic estimate of the outcomes ofeach alternative McGraw-HillInwin Copyright o 2002 by The McGraw-Hill Companies, Inc. Allng/ts reserved
McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. 14-8 Alternative-Outcome Relationship POSSIBLE CONDITIONS Certainty Complete knowledge of the probability of the outcome of each alternative. Uncertainty Absolutely no knowledge of the probability of the outcome of each alternative. Risk Some probabilistic estimate of the outcomes of each alternative
14-9 Bounded Rationality March and simon 's administrative decision making model depicts decision-makers as Operating with incomplete information Affected by their cognitive abilities Impacted by psychological and sociological factors Assumptions Rarely have all necessary or desired information Unaware of all alternatives or consequences Early adoption of solutions due to limitations common Organizational goals constrain decision-making Conflicting constituents' goals can force compromises Mcgraw-hillarwin Copyright o 2002 by The McGraw-Hill Companies, Inc. Allrglits reserved
McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. 14-9 Bounded Rationality Assumptions ⚫ Rarely have all necessary or desired information ⚫ Unaware of all alternatives or consequences ⚫ Early adoption of solutions due to limitations common ⚫ Organizational goals constrain decision-making ⚫ Conflicting constituents’ goals can force compromises March and Simon’s administrative decisionmaking model depicts decision-makers as ⚫ Operating with incomplete information ⚫ Affected by their cognitive abilities ⚫ Impacted by psychological and sociological factors
14-10 Intuitive Decision-Making Using experience, self-confidence, and self-motivation to process information, data and the environment or address a problem or opportunity Contributing Factors High levels of uncertainty e no history or past experience to draw upon e Intense time pressures e Excessive number of alternatives McGraw-Hilllarwin- Copyright @2002 by The McGraw-Hill Companies, Inc. All rights reserved
McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. 14-10 Intuitive Decision-Making Using experience, self-confidence, and self-motivation to process information, data, and the environment or address a problem or opportunity. Contributing Factors: ⚫ High levels of uncertainty ⚫ No history or past experience to draw upon ⚫ Intense time pressures ⚫ Excessive number of alternatives