MAN1006: Introduction to Management Lecture 7:   Managerial Decision Making and Information Technology Oswy Gayle Wednesda...
<ul><li>What have you been learning so for? </li></ul>
<ul><li>Decision Characteristics </li></ul><ul><li>What is a decision? What is decision making?  and two define (2) catego...
<ul><li>Every organization grows, prospers, or fails as a result of decisions by its managers.  Managers are often referre...
<ul><li>Decisions determine how the organization solves its problems, allocates resources, and accomplishes its objectives...
What is a Decision?  and what is Decision Making? <ul><li>Decision  =  a   choice made from available alternatives </li></...
Two (2) Categories of Decisions <ul><li>Programmed Decisions </li></ul><ul><ul><li>Situations occurred often enough to ena...
Decisions and Decision Making <ul><li>Many decisions that managers deal with every day involve at least some degree of unc...
Certainty, Risk, Uncertainty, Ambiguity  <ul><li>Certainty </li></ul><ul><ul><li>all the information the decision maker ne...
Certainty, Risk, Uncertainty, Ambiguity <ul><li>Uncertainty </li></ul><ul><ul><li>managers know which goals they wish to a...
Conditions that Affect the Possibility of Decision Failure Organizational Problem Problem Solution Low High Possibility of...
Selecting a Decision Making Model <ul><li>Depends on the manager’s personal preference </li></ul><ul><li>Whether the decis...
Three Decision-Making Models <ul><li>Classical Model </li></ul><ul><li>Administrative  Model </li></ul><ul><li>Political  ...
Classical Model <ul><li>Assumptions </li></ul><ul><li>Decision maker operates to accomplish goals that are known and agree...
Administrative Model <ul><li>Two concepts are instrumental in shaping the administrative model </li></ul><ul><ul><li>Bound...
Administrative Model <ul><li>Managers actually make decisions in difficult situations characterized by non-programmed deci...
Political Model –  closely resembles the real world <ul><li>Closely resembles the real environment in which most managers ...
Characteristics of Classical, Political, and Administrative Decision Making Models Classical Model   Administrative Model ...
Six Steps in the Managerial Decision-Making Process Evaluation and Feedback Diagnosis and Analysis of Causes Recognition o...
Six Steps in the Managerial Decision-Making Process <ul><li>Recognition of Decision Requirement </li></ul><ul><li>Diagnosi...
Diagnosis and Analysis of Causes <ul><li>Diagnosis  = analyze underlying causal factors associated with the decision situa...
Underlying Causes - Kepner /Tregoe  <ul><li>What is the state of disequilibrium affecting us? </li></ul><ul><li>When did i...
Development of Alternatives <ul><li>Develop Alternatives solutions that will respond to the needs of the situation and cor...
Selection of Desired Alternatives <ul><li>The best alternative is one in which the solution best fits the firm’s overall g...
Implementation  <ul><li>The  implementation  of a chosen alternative involves the use of managerial, administrative, and p...
Evaluation <ul><li>decision makers gather information or feedback to answer the following: How well was the decision imple...
Decision  Styles <ul><li>Differences among people with respect to how they perceive problems and make decisions </li></ul>...
Personal Decision Framework <ul><li>Situation: </li></ul><ul><li>Programmed/non-programmed </li></ul><ul><li>Classical, ad...
Directive Style <ul><li>People who prefer simple, clear-cut solutions to problems </li></ul><ul><li>Make decisions quickly...
Analytical Style <ul><li>Complex solutions based on as much data as they can gather </li></ul><ul><li>Carefully consider a...
Conceptual Style <ul><li>Consider a broad amount of information </li></ul><ul><li>More socially oriented than analytical s...
Behavioral Style <ul><li>Have a deep concern for others as individuals </li></ul><ul><li>Like to talk to people one-on-one...
Participation in Decision Making <ul><li>Helps gauge the appropriate amount of participation for subordinates in process <...
Leader participation styles <ul><li>Decide:  the leader decides alone </li></ul><ul><li>Consult Individually:   presenting...
Participation in Decision Making <ul><li>Diagnostic Questions </li></ul><ul><li>Decision participation depends on the resp...
Seven Leader Diagnostic Questions <ul><li>How  significant is the decision ? </li></ul><ul><li>How important is  subordina...
<ul><li>Read up on Selecting a Decision Making Style </li></ul><ul><li>Information Technology </li></ul>
New Decision Approaches for Turbulent Times Learn, Don’t Punish Know When to Bail Practice the Five Whys Engage in Rigorou...
Upcoming SlideShare
Loading in …5
×

Session 7 groups bba g-i - introduction to management - decision making and inforamtion technology - wednesday october 8, 2008

4,705 views

Published on

1 Comment
1 Like
Statistics
Notes
No Downloads
Views
Total views
4,705
On SlideShare
0
From Embeds
0
Number of Embeds
3
Actions
Shares
0
Downloads
136
Comments
1
Likes
1
Embeds 0
No embeds

No notes for slide

Session 7 groups bba g-i - introduction to management - decision making and inforamtion technology - wednesday october 8, 2008

  1. 1. MAN1006: Introduction to Management Lecture 7: Managerial Decision Making and Information Technology Oswy Gayle Wednesday October 8, 2008 University of Technology, Jamaica School of Business Administration
  2. 2. <ul><li>What have you been learning so for? </li></ul>
  3. 3. <ul><li>Decision Characteristics </li></ul><ul><li>What is a decision? What is decision making? and two define (2) categories of decisions </li></ul><ul><li>Three (3) Types of Decision-making Models </li></ul><ul><li>Six Steps Managers Take in Making Important Decisions </li></ul><ul><li>Participative Decision Making </li></ul><ul><li>Techniques for Improving Decision Making in Today’s Organizations </li></ul>Objectives of Session
  4. 4. <ul><li>Every organization grows, prospers, or fails as a result of decisions by its managers. Managers are often referred to as decision makers. </li></ul><ul><li>Good decision-making is a vital part of good management. </li></ul>Decision Making in Organizations
  5. 5. <ul><li>Decisions determine how the organization solves its problems, allocates resources, and accomplishes its objectives. </li></ul><ul><li>Decision-making is not easy </li></ul><ul><li>The better the decision making, the better the strategic planning </li></ul>Decision Making in Organizations
  6. 6. What is a Decision? and what is Decision Making? <ul><li>Decision = a choice made from available alternatives </li></ul><ul><li>Decision Making = the process of identifying problems and opportunities and resolving them </li></ul>
  7. 7. Two (2) Categories of Decisions <ul><li>Programmed Decisions </li></ul><ul><ul><li>Situations occurred often enough to enable decision rules to be developed and applied in the future </li></ul></ul><ul><ul><li>Made in response to recurring organizational problems </li></ul></ul><ul><li>Nonprogrammed Decisions – in response to unique, poorly defined and largely unstructured, and have important consequences to the organization </li></ul>Ethical Dilemma: The No-Show Consultant
  8. 8. Decisions and Decision Making <ul><li>Many decisions that managers deal with every day involve at least some degree of uncertainty and require nonprogrammed decision making </li></ul><ul><ul><li>May be difficult to make </li></ul></ul><ul><ul><li>Made amid changing factors </li></ul></ul><ul><ul><li>Information may be unclear </li></ul></ul><ul><ul><li>May have to deal with conflicting points of view </li></ul></ul>
  9. 9. Certainty, Risk, Uncertainty, Ambiguity <ul><li>Certainty </li></ul><ul><ul><li>all the information the decision maker needs is fully available </li></ul></ul><ul><li>Risk </li></ul><ul><ul><li>decision has clear-cut goals </li></ul></ul><ul><ul><li>good information is available </li></ul></ul><ul><ul><li>future outcomes associated with each alternative are subject to chance </li></ul></ul>
  10. 10. Certainty, Risk, Uncertainty, Ambiguity <ul><li>Uncertainty </li></ul><ul><ul><li>managers know which goals they wish to achieve </li></ul></ul><ul><ul><li>information about alternatives and future events is incomplete </li></ul></ul><ul><ul><li>managers may have to come up with creative approaches to alternatives </li></ul></ul><ul><li>Ambiguity </li></ul><ul><ul><li>by far the most difficult decision situation </li></ul></ul><ul><ul><li>goals to be achieved or the problem to be solved is unclear </li></ul></ul><ul><ul><li>alternatives are difficult to define </li></ul></ul><ul><ul><li>information about outcomes is unavailable </li></ul></ul>
  11. 11. Conditions that Affect the Possibility of Decision Failure Organizational Problem Problem Solution Low High Possibility of Failure Certainty Risk Uncertainty Ambiguity Programmed Decisions Nonprogrammed Decisions
  12. 12. Selecting a Decision Making Model <ul><li>Depends on the manager’s personal preference </li></ul><ul><li>Whether the decision is programmed or non-programmed </li></ul><ul><li>Extent to which the decision is characterized by risk, uncertainty, or ambiguity </li></ul>
  13. 13. Three Decision-Making Models <ul><li>Classical Model </li></ul><ul><li>Administrative Model </li></ul><ul><li>Political Model </li></ul>
  14. 14. Classical Model <ul><li>Assumptions </li></ul><ul><li>Decision maker operates to accomplish goals that are known and agreed upon </li></ul><ul><li>Decision maker strives for condition of certainty – gathers complete information </li></ul><ul><li>Criteria for evaluating alternatives are known </li></ul><ul><li>Decision maker is rational and uses logic </li></ul><ul><li>Normative = describes how a manager should and provides guidelines for reaching an ideal decision </li></ul>Logical decision in the organization’s best economic interests
  15. 15. Administrative Model <ul><li>Two concepts are instrumental in shaping the administrative model </li></ul><ul><ul><li>Bounded rationality : people have limits or boundaries on how rational they can be </li></ul></ul><ul><ul><li>Satisficing : means that decision makers choose the first solution alternative that satisfies minimal decision criteria </li></ul></ul>How nonprogrammed decisions are made--uncertainty/ambiguity
  16. 16. Administrative Model <ul><li>Managers actually make decisions in difficult situations characterized by non-programmed decisions, uncertainty, and ambiguity </li></ul><ul><li>Decision goals often are vague, conflicting and lack consensus among managers; </li></ul><ul><li>Rational procedures are not always used </li></ul><ul><li>Managers’ searches for alternatives are limited </li></ul><ul><li>Managers settle for a satisficing rather than a maximizing solution </li></ul><ul><li>intuition, looks to past experience </li></ul><ul><li>Descriptive = how managers actually make decisions--not how they should </li></ul>
  17. 17. Political Model – closely resembles the real world <ul><li>Closely resembles the real environment in which most managers and decision makers operate </li></ul><ul><li>Useful in making non-programmed decisions </li></ul><ul><li>Decisions are complex </li></ul><ul><li>Disagreement and conflict over problems and solutions are normal </li></ul><ul><li>Coalition = informal alliance among manages who support a specific goal </li></ul>
  18. 18. Characteristics of Classical, Political, and Administrative Decision Making Models Classical Model Administrative Model Political Model Clear-cut problem and goals Vague problem and goals Pluralistic; conflicting goals Condition of certainty Condition of uncertainty Condition of uncertainty/ambiguity Full information about Limited information about Inconsistent viewpoints; ambiguous alternatives and their outcomes Alternatives and their outcomes information Rational choice by individual Satisficing choice for resolving Bargaining and discussion among for maximizing outcomes problem using intuition coalition members
  19. 19. Six Steps in the Managerial Decision-Making Process Evaluation and Feedback Diagnosis and Analysis of Causes Recognition of Decision Requirement Development of Alternatives Selection of Desired Alternative Implementation of Chosen Alternative Decision-Making Process       
  20. 20. Six Steps in the Managerial Decision-Making Process <ul><li>Recognition of Decision Requirement </li></ul><ul><li>Diagnosis and Analysis of Causes </li></ul><ul><li>Development of Alternatives </li></ul><ul><li>Selection of Desired Alternative </li></ul><ul><li>Implementation of Chosen Alternative </li></ul><ul><li>Evaluation and Feedback </li></ul>
  21. 21. Diagnosis and Analysis of Causes <ul><li>Diagnosis = analyze underlying causal factors associated with the decision situation </li></ul><ul><li>Managers make a mistake if they jump into generating alternatives without first exploring the cause of the problem more deeply </li></ul>
  22. 22. Underlying Causes - Kepner /Tregoe <ul><li>What is the state of disequilibrium affecting us? </li></ul><ul><li>When did it occur? </li></ul><ul><li>Where did it occur? </li></ul><ul><li>How did it occur? </li></ul><ul><li>To whom did it occur? </li></ul><ul><li>What is the urgency of the problem? </li></ul><ul><li>What is the interconnectedness of events? </li></ul><ul><li>What result came from which activity? </li></ul>
  23. 23. Development of Alternatives <ul><li>Develop Alternatives solutions that will respond to the needs of the situation and correct the underlyning cause </li></ul><ul><li>For a programmed decision, feasible alternatives are often available within the organization’s rules and procedures </li></ul><ul><li>Nonprogrammed decisions require developing new courses of action that will meet the needs of the company </li></ul>
  24. 24. Selection of Desired Alternatives <ul><li>The best alternative is one in which the solution best fits the firm’s overall goals and values and achieves the desired results using the fewest resources </li></ul><ul><li>Risk Propensity = willingness to undertake risk with the opportunity of gaining an increased payoff </li></ul>
  25. 25. Implementation <ul><li>The implementation of a chosen alternative involves the use of managerial, administrative, and persuasive abilities to cause the decision to be carried out. </li></ul><ul><li>The success of the chosen alternative depends on whether or not it is translated into action. </li></ul><ul><li>Implementation = using managerial, administrative, and persuasive abilities to translate the chosen alternative into action </li></ul>
  26. 26. Evaluation <ul><li>decision makers gather information or feedback to answer the following: How well was the decision implemented? Did the decision achieve its goals? </li></ul><ul><li>Feedback is important because decision-making is a continuous, never-ending process. </li></ul>
  27. 27. Decision Styles <ul><li>Differences among people with respect to how they perceive problems and make decisions </li></ul><ul><li>Not all managers make decisions the same </li></ul><ul><ul><li>Directive style </li></ul></ul><ul><ul><li>Analytical style </li></ul></ul><ul><ul><li>Conceptual style </li></ul></ul><ul><ul><li>Behavioral style </li></ul></ul>
  28. 28. Personal Decision Framework <ul><li>Situation: </li></ul><ul><li>Programmed/non-programmed </li></ul><ul><li>Classical, administrative, political </li></ul><ul><li>Decision steps </li></ul><ul><li>Decision Choice: </li></ul><ul><li>Best Solution to Problem </li></ul><ul><li>Personal Decision Style: </li></ul><ul><li>Directive </li></ul><ul><li>Analytical </li></ul><ul><li>Conceptual </li></ul><ul><li>Behavioral </li></ul>
  29. 29. Directive Style <ul><li>People who prefer simple, clear-cut solutions to problems </li></ul><ul><li>Make decisions quickly </li></ul><ul><li>May consider only one or two alternatives </li></ul><ul><li>Efficient and rational </li></ul><ul><li>Prefer rules or procedures </li></ul>
  30. 30. Analytical Style <ul><li>Complex solutions based on as much data as they can gather </li></ul><ul><li>Carefully consider alternatives </li></ul><ul><li>Base decision on objective, rational data from management control systems and other sources </li></ul><ul><li>Search for best possible decision based on information available </li></ul>
  31. 31. Conceptual Style <ul><li>Consider a broad amount of information </li></ul><ul><li>More socially oriented than analytical style </li></ul><ul><li>Like to talk to others about the problem and possible solutions </li></ul><ul><li>Consider many broad alternatives </li></ul><ul><li>Relay on information from people and systems </li></ul><ul><li>Solve problems creatively </li></ul>
  32. 32. Behavioral Style <ul><li>Have a deep concern for others as individuals </li></ul><ul><li>Like to talk to people one-on-one </li></ul><ul><li>Understand their feelings about the problem and the effect of a given decision upon them </li></ul><ul><li>Concerned with the personal development of others </li></ul><ul><li>May make decisions to help others achieve their goals </li></ul>
  33. 33. Participation in Decision Making <ul><li>Helps gauge the appropriate amount of participation for subordinates in process </li></ul><ul><li>Leader Participation Styles </li></ul><ul><li>Five levels of subordinate participation in decision making ranging from highly autocratic to highly democratic </li></ul>Vroom-Jago Model
  34. 34. Leader participation styles <ul><li>Decide: the leader decides alone </li></ul><ul><li>Consult Individually: presenting the problem to subordinates individually for their suggestions and then making the decision. </li></ul><ul><li>Consult Group: sharing the problem with subordinates as a group, collectively obtaining their ideas and suggestions, then making the decision </li></ul><ul><li>Facilitate: sharing the problem with subordinates and acting as a facilitator to help the group arrive at a decision </li></ul><ul><li>Delegate: delegating the problem and permitting the group to make the decision within prescribed limits. </li></ul>
  35. 35. Participation in Decision Making <ul><li>Diagnostic Questions </li></ul><ul><li>Decision participation depends on the responses to seven diagnostic questions about </li></ul><ul><ul><li>the problem </li></ul></ul><ul><ul><li>the required level of decision quality </li></ul></ul><ul><ul><li>the importance of having subordinates commit to the decision </li></ul></ul>Vroom-Jago Model
  36. 36. Seven Leader Diagnostic Questions <ul><li>How significant is the decision ? </li></ul><ul><li>How important is subordinate commitment ? </li></ul><ul><li>What is the level of the leader’s expertise ? </li></ul><ul><li>If the leader were to make the decision alone at what level would subordinates be committed to the decision ? </li></ul><ul><li>What level is the subordinate’s support for the team or organization’s objectives? </li></ul><ul><li>What is the member’s level of knowledge or expertise relative to the problem? </li></ul><ul><li>How skilled or committed are group members to working together? (Team Competence) </li></ul>
  37. 37. <ul><li>Read up on Selecting a Decision Making Style </li></ul><ul><li>Information Technology </li></ul>
  38. 38. New Decision Approaches for Turbulent Times Learn, Don’t Punish Know When to Bail Practice the Five Whys Engage in Rigorous Debate Brainstorming New Decision Approaches for Turbulent Times

×