The document discusses decision making in management. It covers characteristics of management decisions like programmability, uncertainty, and risk. It also outlines the stages of decision making including identifying problems, generating alternatives, evaluating options, choosing an alternative, implementing it, and evaluating results. The document notes benefits and challenges of group decision making. It emphasizes developing skills like time management and delegation to improve decision making abilities.

1. Management
Gomez-Mejia & Balkin
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Chapter 6
Decision Making

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Google
• Decision to follow Yahoo! and Microsoft
into Chinese market
• Chinese government restricts operations
• Google’s Chinese search engine includes
a built-in censor to prevent access to
content that may be considered politically
sensitive by the Chinese government
including “multiparty elections” and
information about democracy

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Decision Making
• The process of identifying problems and
opportunities and resolving them or
taking advantage of them

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Characteristics of Management
Decision Making
Programmability Conflict
Uncertainty Scope
Risk Crisis

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Programmability
• Programmed decisions
– Established routines and procedures exist
for resolving company problems
• Nonprogrammed decisions
– The situation is unique and there are no
previously established routines or
procedures that can be used to resolve the
problem

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Uncertainty
• Certainty
– All information needed is available
• Uncertainty
– Incomplete information is available to make
a management decision

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Risk
• The degree of uncertainty about the
outcome of a management decision

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Conflict
• Management decision making is often
characterized by conflict over opposing
goals, utilization of scarce resources,
and other priorities

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Decision Scope
• Strategic decisions
– Long-term perspective
– Focus on entire organization
• Tactical decisions
– Short-term perspective
– Focus on subunits of the organization
• Operational decisions
– Extremely short-term perspective
– Focus on routine activities

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Crisis Situations
• Risk
• Uncertainty
• Nonprogrammability

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Stages of Decision Making

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Identifying and Diagnosing
the Problem
• Opportunity
– Requires committing resources to improve
company performance
• Problem
– When performance is below expected or
desired levels of performance

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Generating Alternative Solutions
• Generate possible solutions based upon
perceived causes

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Evaluating Alternatives
• Examine alternative solutions using a set
of decision criteria
• Decision quality
– Costs, revenues, product design
• Decision acceptance
– Based on people’s feelings

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Decision Tree

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Choosing the Best Alternative
• Optimizing
• Satisficing

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Implementing the Decision
• Put the solution into practice
– Provide resources
– Exercise leadership
– Develop communication systems
– Recognize and reward individuals

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Evaluating the Results
• Gather information and try to learn if
the implemented decision achieved
its goals

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The Limits of Rationale
Decision Making
• Organizational politics
• Emotions and personal preferences
• Illusion of control
• Intuition and escalation of commitment

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Nonrational Decision-Making
Models
• Administrative Model
• Garbage Can Model

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Personal Decision-Making Styles
• Directive
• Analytical
• Conceptual
• Behavioral

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Decision Making in Groups
• Benefits
– Increased acceptance
– Greater pool of knowledge
– Different perspectives
– Greater comprehension
– Training ground

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Decision Making in Groups
• Problems
– Social pressure
– Minority domination
– Logrolling
– Goal displacement
– “Groupthink”

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Managing Group
Decision Making
• Leadership styles
– Decide and persuade
– Discover facts and decide
– Consult with individuals and decide
– Consult with group and decide
– Group decision

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To Stimulate Creativity
• Brainstorming
• Storyboarding
• Nominal group technique
• Delphi technique

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Decision-Making Skills
• Time management skills
– Proactive
– Reactive
• Delegation skills

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Learning Objective 1
• Recognize the nature of management
decisions
– Programmability
– Uncertainty
– Risk
– Conflict
– Decision scope
– Crisis

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Learning Objective 2
• Utilize the six steps of decision making
– Identify and diagnose the problem
– Generate alternative solutions
– Evaluate the alternatives
– Choose the best alternative
– Implement the decision
– Evaluate the results

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Learning Objective 3
• Apply the criteria of quality and
acceptance to a decision
– Decision quality
– Decision acceptance

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Learning Objective 4
• Reap the benefits and avoid the
problems of group decision making
– Use a group when employee commitment is
critical
– Include people with diverse perspectives to
enhance the quality of the decision
– Avoid issues of groupthink

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Learning Objective 5
• Develop time management skills to
generate adequate time to make
decisions
– Eliminate or minimize time wasters
– Anticipate problems

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Learning Objective 6
• Know when to delegate and how to do
so wisely
– In delegation, employees make the
decisions
– Delegation can provide the manager with
more time to spend on other tasks and
decisions

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