2. TABLE OF CONTENTS
• Summary
• How Do Managers Make Decisions?
• What Are Three Approaches Managers Can Use To Make
Decisions?
• What Types Of Decisions And Decision-making Conditions Do
Managers Face?
• How Do Groups Make Decisions?
• What Contemporary Decision-making Issues Do Managers
Face?
4. SUMMARY
Describe the decision-making process. The decision-making process
consists of eight steps:
• Identify the problem,
• Identify the decision criteria,
• Weight the criteria,
• Develop alternatives,
• Analyze alternatives,
• Select alternative,
• Implement alternative, and
• Evaluate decision effectiveness. As managers make decisions, they
may use heuristics to simplify the process, which can lead to errors
and biases in their decision making. The 12 common decision-
making errors and biases include overconfidence, immediate
gratification, anchoring, selective perception, confirmation, framing,
availability, representation, randomness, sunk costs, self-serving
bias, and hindsight.
5. SUMMARY
Explain the three approaches managers can use to make
decisions. The first approach is the rational model. The
assumptions of rationality are as follows: The problem is clear
and unambiguous, a single, well-defined goal is to be achieved,
all alternatives and consequences are known and the final
choice will maximize his or her economic payoff. The second
approach, bounded rationality, says that managers make
rational decisions but are bounded (limited) by their ability to
process information. In this approach, managers satisfice, which
is when decision makers accept solutions that are good enough.
Finally, intuitive decision making is making decisions on the basis
of experience, feelings, and accumulated judgment.
6. SUMMARY
Describe the types of decisions and decision-making conditions
managers face. Programmed decisions are repetitive decisions
that can be handled by a routine approach and are used when
the problem being resolved is straightforward, familiar, and
easily defined (structured). Non-programmed decisions are
unique decisions that require a custom-made solution and are
used when the problems are new or unusual (unstructured) and
for which information is ambiguous or incomplete. Certainty is a
situation when a manager can make accurate decisions because
all outcomes are known. Risk is a situation when a manager can
estimate the likelihood of certain outcomes. Uncertainty is a
situation where a manager is not certain about the outcomes
and can’t even make reasonable probability estimates.
7. SUMMARY
Discuss group decision making. Groups offer certain advantages
when making decisions—more complete information, more
alternatives, increased acceptance of a solution, and greater
legitimacy. On the other hand, groups are time-consuming, can
be dominated by a minority, create pressures to conform, and
cloud responsibility. Three ways of improving group decision
making are brainstorming (utilizing an idea-generating process
that specifically encourages any and all alternatives while
withholding any criticism of those alternatives), the nominal
group technique (a technique that restricts discussion during the
decision-making process), and electronic meetings (the most
recent approach to group decision making, which blends the
nominal group technique with sophisticated computer
technology).
8. SUMMARY
Discuss contemporary issues in managerial decision-making. As
managers deal with employees from diverse cultures, they need
to recognize common and accepted behavior when asking them
to make decisions. Some individuals may not be as comfortable
as others with being closely involved in decision making, or they
may not be willing to experiment with something radically
different. Also, managers need to be creative in their decision
making since creativity allows them to appraise and understand
the problem more fully, including “seeing” problems that others
can’t see.
9. LEARNING OBJECTIVES
In this chapter we will address the following questions:
• Describe the decision-making process.
• Explain the three approaches managers can use to make
decisions.
• Describe the types of decisions and decision-making
conditions managers face.
• Discuss group decision-making.
• Discuss contemporary issues in managerial decision-making.
11. THE DECISION-MAKING PROCESS
• Decision-making is typically
described as “choosing among
alternatives.”
• This is simplistic because
decision-making is a process.
13. IDENTIFICATIONOFAPROBLEM(STEP1)
• The decision-making process
begins with the identification
of a problem (Step 1), a
discrepancy between an
existing and a desired state of
affairs.
• How do managers become
aware that they have a
discrepancy?
• Managers compare their
current state of affairs against
an acceptable standard with
past performance, previously
set goals and performance of
some other unit within the
organization or in other
organizations.
Identification
of problem
Aware of a
discrepancy
Acceptable
standard with
past
performance
Previously set
goals
Performance
of some other
unit within the
organization
15. IDENTIFICATION OF DECISION CRITERIA (STEP 2)
• Once a problem is identified,
the decision criteria must be
identified (Step 2). For example
a car-buying alternatives
• Every decision maker has
criteria - explicitly stated or not
that guide his/her decision.
• What is not identified is as
important as what is.
• If a decision maker does not
identify a particular factor, it is
treated as irrelevant.
• Example of step 2: Identification
of decision criteria
Jeep Cherokee – 2(initial price) +
10(interior comfort) +8 (durability)
+ 7 (repair record) +
5(performance) + 5 (handling) = 37
17. ALLOCATION OF WEIGHT CRITERIA AND DEVELOPMENT
OF ALTERNATIVES (STEP 3 AND 4 )
• It is necessary to allocate
weights to the items listed in
Step 2 in order to give them
their relative priority in the
decision (Step 3).
• A simple approach, give the
most important criterion a
weight of ten and then assign
weights to the rest against
that standard.
• Then the decision maker lists
the alternatives that could
succeed in resolving the
problem (Step 4). No attempt
is made to appraise these
alternatives, only to list them.
•
• Example of Step 3: Allocation of
weight criteria.
• Example of Step 4 : Development of
alternatives. Once you have weighed
all the evidence, you are ready to
select the alternative that seems to
be best one
18. ANALYZE EACH ALTERNATIVE (STEP 5)
• Once identified, the decision
maker must critically analyze
each alternative (Step 5).
• Each alternative is evaluated
by appraising it against the
criteria and weights
established in Steps 2 and 3.
• The weighting done in Step 3.
• Multiply each alternative
assessment against its weight.
• The weighting of the criteria
has changed the ranking of
alternatives in our example.
• Example of Step 5: Analyze each
alternative. Multiply each alternative
assessment against its weight.
Jeep Cherokee – 2(initial price) X 10 + 10
(interior comfort) X 8 + 8 (durability) X 5
+ 7 (repair record) X 5 + 5(performance)
X 3 + 5 (handling) X 1 = 195.
19. SELECTION OF AN ALTERNATIVE AND IMPLEMENTATION
OF THE ALTERNATIVES (STEP 6 AND 7)
• The critical act of choosing the best
alternative from among those
enumerated and assessed (Step 6).
• The decision may still fail if it is not
implemented properly (Step 7).
• Decision implementation includes
conveying the decision to those
affected and getting their
commitment to it.
• The people who must carry out a
decision are most likely to
enthusiastically endorse the outcome
if they participate in the decision-
making process.
Selection of an
alternative (Step 6)
• Choosing the best
alternative
Implementation of the
alternatives (Step 7)
• Decision must be
implemented properly
(convey and endorse
outcome)
20. EVALUATION OF DECISION EFFECTIVENESS (STEP 8)
• The last step (Step 8) appraises
the result of the decision to see
whether it has corrected the
problem.
• Did the alternative chosen in
Step 6 and implemented in Step
7 accomplish the desired result?
Investigate
to decide if
the
solution
has been
successful
If result
has not
been
achieved,
revisit and
rethink the
solution
22. COMMON ERRORS COMMITTED IN THE DECISION-MAKING PROCESS
• Making decisions is making
choices.
• Heuristics are “rules of
thumb” that managers use
to simplify their decision
making.
24. DECISION MAKING AND BIASES/ERRORS
• Overconfidence bias - they think they
know more than they do or hold
unrealistically positive views of
themselves and their performance.
• Immediate gratification bias -
describes decision makers who tend
to want immediate rewards and to
avoid immediate costs.
• Anchoring effect -describes when
decision makers fixate on initial
information as a starting point and
then, once set, fail to adequately
adjust for subsequent information.
Overconfidence bias
Immediate gratification
bias
Anchoring effect
Selective perception bias
Confirmation bias
Framing bias
25. DECISION MAKING AND BIASES/ERRORS
• Selective perception bias - when
decision makers selectively organize
and interpret events based on their
biased perceptions.
• Confirmation bias - decision makers
who seek out information that
reaffirms their past choices and
discount information that contradicts
past judgments
• Framing bias - when decision makers
select and highlight certain aspects of
a situation while excluding others.
Overconfidence bias
Immediate gratification
bias
Anchoring effect
Selective perception bias
Confirmation bias
Framing bias
26. DECISION MAKING AND BIASES/ERRORS
• Availability bias - is when decisions
makers tend to remember events
that are the most recent and vivid in
their memory.
• Representation bias - when decision
makers assess the likelihood of an
event based on how closely it
resembles other events or sets of
events.
• Randomness bias - describes when
decision makers try to create
meaning out of random events
Availability bias
Representation bias
Randomness bias
Sunk costs error
Self-serving bias
Hindsight bias
27. DECISION MAKING AND BIASES/ERRORS
• Sunk costs error - when decision
makers forget that current choices
can’t correct the past.
• Self-serving bias -decision makers
who are quick to take credit for their
successes and to blame failure on
outside factors.
• Hindsight bias - the tendency for
decision makers to falsely believe that
they would have accurately predicted
the outcome of an event once that
outcome is actually known.
Availability bias
Representation bias
Randomness bias
Sunk costs error
Self-serving bias
Hindsight bias
28. HOW DO MANAGERS MAKE DECISIONS?
Decision Making and Biases-Question
• All of us bring biases to the decisions we make. What would
be the drawbacks of having biases? Could there be any
advantages to having biases? Explain. What are the
implications for managerial decision making?
29. HOW DO MANAGERS MAKE DECISIONS?
Decision Making and Biases-Answers
All of us bring biases to the decisions we make. What would be the
drawbacks of having biases? Could there be any advantages to having biases?
Explain. What are the implications for managerial decision making?
• In slide 23, shows the common managerial biases used in decision-making.
Any of these biases could contribute to poor decision-making that could
negatively impact individuals and/or the organization. Managers need to be
cognizant of any potential biases prior to making important decisions.
Managers also should pay attention to “how” they make decisions and try
to identify the heuristics they typically use and critically evaluate how
appropriate those are. Finally, managers might want to ask those around
them to help identify weaknesses in their decision-making style and try to
improve on them.
30. WHAT ARE THREE APPROACHES MANAGERS CAN USE TO MAKE DECISIONS?
Section 2
31. WHAT ARE THREE APPROACHES MANAGERS CAN USE TO MAKE DECISIONS?
• Rational Model - Decision
making is the essence of
management. Managers as they
plan, organize, lead, and control
are called decision makers.
• Managerial decision-making is
assumed to be rational.
• Managers make consistent,
value-maximizing choices within
specified constraints.
Rational
Model
Bounded
Rationality
Intuition and
Managerial
Decision
Making
32. WHAT ARE THREE APPROACHES MANAGERS CAN USE TO MAKE DECISIONS?
• Rational Model - Decision maker
who was perfectly rational would
be fully objective and logical.
• He or she would carefully define
the problem and have a clear and
specific goal.
• The steps in the decision-making
process would consistently lead to
selecting the alternative that
maximizes that goal.
• Decisions are made in the best
interests of the organization.
• Guide users through problems by
asking them a set of sequential
questions about the situation and
drawing conclusions based on the
answers given.
Rational
Model
Bounded
Rationality
Intuition and
Managerial
Decision
Making
33. WHAT ARE THREE APPROACHES MANAGERS CAN USE TO MAKE DECISIONS?
• Bounded Rationality - Management
theory is built on the premise that
individuals act rationally.
• The essence of managerial jobs
revolves around the rational decision-
making process. However, few people
actually behave rationally.
• How do managers’ actions within
these boundaries differ from actions
within the rational model?
• Once a problem is identified, the
search for criteria and alternatives
begins.
• This list of criteria is generally limited
and made up of the more
conspicuous choices.
Rational
Model
Bounded
Rationality
Intuition and
Managerial
Decision
Making
34. WHAT ARE THREE APPROACHES MANAGERS CAN USE TO MAKE DECISIONS?
• Bounded Rationality - Herbert Simon
found that within certain constraints,
managers do act rationally. Simon
found that decision makers focus on
easy-to-find choices those that are
highly visible.
• This means developing alternatives
that vary only slightly from past
decisions about similar problems.
• Once this limited set of alternatives is
identified, decision makers begin
reviewing them.
• The review will not be exhaustive.
• They review alternatives only until an
alternative that is sufficient is found.
Rational
Model
Bounded
Rationality
Intuition and
Managerial
Decision
Making
35. WHAT ARE THREE APPROACHES MANAGERS CAN USE TO MAKE DECISIONS?
• Bounded Rationality - The first
alternative to meet the “good enough”
criterion ends the search.
Consider the following example,
• A finance major upon graduation is
looking for a position as a personal
financial planner with a minimum
salary of $47,000.
• They accept a job offer as a business
credit analyst at a bank 50 miles away
from home at a starting salary of
$42,000.
• Further searching would have revealed
an opening for a personal financial
planner (the job they were looking for)
with firm 25 miles from home at a
starting salary of $43,000.
• They stopped searching when the first
job was found because it was “good
enough.”
Rational
Model
Bounded
Rationality
Intuition and
Managerial
Decision
Making
36. WHAT ARE THREE APPROACHES MANAGERS CAN USE TO MAKE DECISIONS?
• Bounded Rationality -What are the
implications of bounded rationality on
the manager’s job? In situations in
which the assumptions of perfect
rationality do not apply (including many
of the most important and far-reaching
decisions that a manager makes), the
details of the decision-making process
are strongly influenced by the decision
maker’s self-interest, the organization’s
culture, internal politics, and power
considerations.
• Decision-making is also likely influenced
by the organization’s culture, internal
politics, power considerations, and by a
phenomenon called escalation of
commitment, which is an increased
commitment to a previous decision
despite evidence that it may have been
wrong.
Rational
Model
Bounded
Rationality
Intuition and
Managerial
Decision
Making
37. WHAT ARE THREE APPROACHES MANAGERS CAN USE TO MAKE DECISIONS?
Rational
Model
Bounded
Rationality
Intuition and
Managerial
Decision
Making
38. WHAT ARE THREE APPROACHES MANAGERS CAN USE TO MAKE DECISIONS?
Rational
Model
Bounded
Rationality
Intuition and
Managerial
Decision
Making
• Intuitive decision making –Making
decisions on the basis of experience,
feelings, and accumulated judgment.
• What is intuition ?
• Intuition- Experienced based decisions.
Managers make decisions based on
their past experience
• Intuition- Value or Ethics based
decisions. Managers make decisions
based on ethical values of culture
• Intuition- Subconscious mental
processing. Managers use data from
subconscious mind to help them make
decisions
• Intuition- Affect-initiated decisions.
Managers make decisions based on
feelings or emotions.
• Intuition- Cognitive –based decision.
Managers make decisions based on
skills, knowledge, and training ]
39. WHAT TYPES OF DECISIONS AND DECISION-MAKING CONDITIONS DO
MANAGERS FACE?
Section 3
40. HOW DO PROBLEMS DIFFER?
• Some problems are
straightforward. The goal of the
decision maker is clear, the
problem familiar, and
information about the problem
easily defined and complete.
• Examples of well-structured
problems include a supplier’s
tardiness with an important
delivery, a customer’s wanting to
return an Internet purchase, etc.
Well-structured
problems
Ill-structured
problems
41. HOW DO PROBLEMS DIFFER?
• Many situations, however, are ill-
structured problems, are new, or
unusual. Information about such
problems is ambiguous or
incomplete.
• Examples of ill-structured
problems include the decision to
enter a new market segment, to
hire an architect to design a new
office park, etc.
Well-structured
problems
Ill-structured
problems
42. HOW DOES A MANAGER MAKE PROGRAMMED DECISIONS
• Programmed, or routine,
decision making is the most
efficient way to handle well-
structured problems.
• When problems are ill
structured, managers must
rely on nonprogrammed
decision making.
Programmed
decision making
Nonprogrammed
decision making.
43. PROGRAMMED DECISION MAKING
• Decisions are programmed to the
extent that they are repetitive and
routine and to the extent that a
specific approach has been worked
out for handling them.
• Programmed decision making is
relatively simple and tends to rely
heavily on previous solutions.
• The develop-the-alternatives stage is
given little attention because
programmed decision making
becomes decision making by
precedent.
Repetitive
and
routine
Relatively
simple
Given little
attention
44. TYPES OF PROGRAMMED DECISION MAKING
• Procedure is a series of interrelated
sequential steps that a manager can
use when responding to a well-
structured problem.
• The only real difficulty is in
identifying the problem.
• Once the problem is clear, so is the
procedure.
• Example of purchasing manager and
request for 250 copies of Norton
Antivirus Software
Procedure
Rule
Policy
45. TYPES OF PROGRAMMED DECISION MAKING
• A rule is an explicit statement
that tells a manager what he or
she ought or ought not to do.
• Rules are frequently used with a
well-structured problem because
they are simple to follow and
ensure consistency.
Procedure
Rule
Policy
46. TYPES OF PROGRAMMED DECISION MAKING
• A policy provides guidelines to
channel a manager’s thinking in a
specific direction.
• In contrast to a rule, a policy
establishes parameters for the
decision maker rather than
specifically stating what should or
should not be done.
• Example, “we promote from within,
whenever possible.”
Procedure
Rule
Policy
47. HOW DO NONPROGRAMMED DECISIONS DIFFER FROM
PROGRAMMED DECISIONS?
• Examples of nonprogrammed
decisions: deciding whether to
acquire another organization,
deciding which global markets offer
the most potential, engineering work
processes to improve efficiency, etc.
• Such decisions are unique and
nonrecurring, involving an ill-
structured problem with no cut-and-
dried solution.
• Bezos’ strategy to “get big fast”
helped the company grow but at the
cost of perennial financial losses.
Bezos made decisions affecting how
the company operated, including
allowing other sellers to sell their
books at Amazon. For the first time,
Amazon made a profit.
48.
49. HOW ARE PROBLEMS, TYPES OF DECISIONS,
AND ORGANIZATIONAL LEVEL INTEGRATED?
• Well-structured problems are
responded to with programmed
decision making.
• Lower-level managers essentially
confront familiar and repetitive
problems.
• Ill-structured problems require
nonprogrammed decision making.
• The problems confronting managers
up the organizational hierarchy are
more likely to become ill structured.
• Few managerial decisions are either
fully programmed or fully
nonprogrammed.
Well-structured
problems
Lower-level managers
Ill-structured
problems
Fully programmed or
fully nonprogrammed.
50. HOW ARE PROBLEMS, TYPES OF DECISIONS,
AND ORGANIZATIONAL LEVEL INTEGRATED?
• Organizational efficiency is
facilitated by the use of
programmed decision making.
• Whenever possible,
management decisions are likely
to be programmed.
• There are strong economic
incentives for top management
to create policies, standard
operating procedures, and rules
to guide other managers.
• Programmed decisions minimize
the need for managers to
exercise discretion.
• This benefit is important because
discretion costs money.
Organizational efficiency
Programmed
management decisions
Top management
policies, SOP, rules and
guides
Minimize manager
discretion
51. WHAT DECISION-MAKING CONDITIONS DO
MANAGERS FACE?
Certainty
• A situation where a manager can make accurate decisions
because the outcome of every alternative is known.
Risk
• Conditions in which the decision maker is able to estimate the
likelihood of certain outcomes.
Uncertainty
• When you’re not certain about the outcomes and can’t even
make reasonable probability estimates.
52. WHAT TYPES OF DECISIONS AND DECISION-MAKING
CONDITIONS DO MANAGERS FACE?
VideoTime–“IntuitiveDecisionMaking”
Jo's talk highlights how utilising our
inner-wisdom makes our roles in this
world more enjoyable, our decisions
more sound and our lives less stressful”.
Jo Simpson is a leading authority on
values based leadership, recently
publishing her first book “The Restless
Executive - Reclaim Your Values, Love
what You Do and Lead with Purpose” in
June 2015. It was Jo’s own restlessness,
that inspired and led to the transitions
and transformations she has
experienced in recent years;
developing a courage, clarity and
consistency that she now lives her life
by.
https://www.youtube.com/watch?v=B4
0ICphuivU
54. HOW DO GROUPS MAKE DECISIONS?
• Many decisions in organizations,
especially important decisions
that have far-reaching effects on
organizational activities and
personnel, are typically made in
groups.
• In many cases, these groups
represent people who will be
most affected by the decisions.
• Managers spend a significant
portion of their time in meetings.
55. WHAT ARE THE ADVANTAGES AND DISADVANTAGES OF
GROUP DECISION MAKING?
ADVANTAGES OF GROUP DECISION
MAKING
• Individual and group decisions
have their own set of strengths -
neither is ideal for all situations.
• Group decisions provide more
complete information than do
individual ones.
• A group will bring a diversity of
experiences and perspectives to
the decision process.
Own set of
strengths
Provide complete
information
Diversity of
experiences
56. WHAT ARE THE ADVANTAGES AND DISADVANTAGES OF
GROUP DECISION MAKING?
ADVANTAGES OF GROUP DECISION
MAKING
• Groups also generate more
alternatives.
• Quantity and diversity of
information are greatest when
group members represent
different specialties.
• Group decision making increases
acceptance of a solution.
• This process increases
legitimacy.
More alternatives
Quantity and
diversity information
Increase solutions
Increase legitimacy
57. WHAT ARE THE ADVANTAGES AND DISADVANTAGES OF
GROUP DECISION MAKING?
DISADVANTAGES OF GROUP DECISION
MAKING
• First, they are time-consuming.
• There may also be a situation in
which there is minority domination.
• Members of a group are never
perfectly equal.
• A minority that dominates a group
frequently has an undue influence on
the final decision.
• Finally, there is ambiguous
responsibility. In a group decision,
the responsibility of any single
member is watered down.
• Potential of Groupthink.
Time-consuming
Minority domination
Members are never equal
Undue influences on decision
Ambiguous responsibility
Groupthink
58. GROUPTHINK
• Irving Janis’ groupthink—a form
of conformity in which group
members withhold deviant,
minority, or unpopular views in
order to give the appearance of
agreement.
• Groupthink hinders decision
making, possibly jeopardizing the
quality of the decision by
undermining critical thinking in
the group.
• Affecting a group’s ability to
objectively appraise alternatives.
• Groupthink can be minimized if
the group is cohesive, it fosters
open discussion, is led by an
impartial leader who seeks input
from all members.
59. HOW DOES GROUPTHINK OCCUR?
• Group members rationalize any
resistance to the assumptions
they have made.
• Members apply direct pressures
on those who momentarily
express doubts about any of the
group’s shared views or who
question the arguments favored
by the majority.
• Those members who have
doubts or hold differing points of
view seek to avoid deviating from
what appears to be group
consensus.
• There is an illusion of unanimity.
Silence is assumed as being in full
accord.
Resistance
assumptions
Apply pressure
who express
doubts
Hold differing
points
Unanimity
silence
60. WHEN ARE GROUPS MOST EFFECTIVE?
• Group decisions tend to be more
accurate.
• On the average, groups make
better decisions than
individuals—although groupthink
may occur.
• If decision effectiveness is
defined in terms of speed,
individuals are superior.
• If creativity is important, groups
tend to be more effective than
individuals
61. WHEN ARE GROUPS MOST EFFECTIVE?
• If effectiveness means the degree of
acceptance that the final solution
achieves, then groups are better.
• The effectiveness is also influenced by
the size of the group. The larger the
group, the greater the opportunity for
heterogeneous representation.
• A larger group requires more
coordination and more time to allow
for contributions.
• A minimum of five to a maximum of
about fifteen is best. Because five and
seven are odd numbers, strict deadlocks
are avoided.
• Effectiveness should not be considered
without also assessing efficiency.
• Groups almost always are less efficient
than the individual decision maker.
62. HOW CAN YOU IMPROVE GROUP DECISION MAKING?
• Three ways of making group
decision making more
creative: brainstorming, the
nominal group technique,
and electronic meetings.
Brainstorming
Nominal
group
technique
Electronic
meetings
63. WHAT IS BRAINSTORMING?
• A relatively simple technique for
overcoming pressures for
conformity.
• It utilizes an idea-generating
process that specifically
encourages any and all
alternatives.
• A half-dozen to a dozen people
sit around a table.
• The leader states the problem
clearly, ensuring understanding
by all participants.
• Members then “free-wheel” as
many alternatives as they can in
a given time.
• No criticism is allowed; all the
alternatives are recorded.
• Brainstorming is merely a process
for generating ideas.
64. THE NOMINAL GROUP TECHNIQUE
• The technique restricts
discussion during the
decision-making process.
• Group members must be
present, but they are
required to operate
independently.
• They secretly write a list of
general problem areas or
potential solutions.
• The chief advantage is that
it permits a formal
meeting but does not
restrict independent
thinking.
65. THE ELECTRONIC MEETING
• The electronic meeting—blends the
nominal group technique with
computer technology.
• Once the technology for the meeting is
in place, the concept is simple.
• Numerous people sit around a
horseshoe-shaped table that is empty
except for a series of computer
terminals.
• Issues are presented to participants,
who type their responses onto their
computer screens.
• Individual comments, as well as
aggregate votes, are displayed on a
projection screen in the room.
• The major advantages of electronic
meetings are anonymity, honesty, and
speed.
66. THE ELECTRONIC MEETING
• Participants can anonymously
type any message they want, and
it will flash on the screen for all
to see at the push of a board key.
• It is fast. Chitchat is eliminated,
discussions do not digress, and
many participants can “talk” at
once without interrupting the
others.
• Experts claim that electronic
meetings are significantly faster
and much cheaper than
traditional face-to-face meetings
• The future of group decision
making is very likely to include
extensive usage of electronic
meetings.
• A variation of the electronic
meeting is the video conference
67. THE ELECTRONIC MEETING DRAWBACKS
• Those who can type quickly can
outshine those who may be
verbally eloquent but are lousy
typists.
• Those with the best ideas don’t get
credit for them.
• The process lacks the
informational richness of face-to-
face oral communication.
68. HOW DO GROUPS MAKE DECISIONS?
VideoTime–“Howtoturnagroupofstrangersintoateam”
“Studies "teaming," where people come
together quickly (and often temporarily)
to solve new, urgent or unusual
problems”.
Amy C. Edmondson is the Novartis
Professor of Leadership and
Management at the Harvard Business
School, a chair established to support
the study of human interactions that
lead to the creation of successful
enterprises that contribute to the
betterment of society.
https://www.youtube.com/watch?v=3b
oKz0Exros
70. HOW DOES NATIONAL CULTURE AFFECT
MANAGER’S DECISION-MAKING?
• Research shows that, to some extent,
decision-making practices differ by
country.
• Two decision variables. The way
decisions are made: who makes the
decision? The degree of risk a decision
maker is willing to take.
• India, power distance and uncertainty
avoidance are high.
• Only very senior-level managers make
decisions, and they are likely to make
safe ones. Sweden, power distance and
uncertainty avoidance are low.
• Swedish senior managers tend not to be
afraid to make risky decisions and also
push decisions down in the ranks.
• Egypt, where time pressures are low,
managers make decisions at a slower
and more deliberate pace than
managers in the United States. Swedish
Power distance is low
Senior Manager take
risks and unafraid
India
Power distance is high
Senior level managers
make decisions
Egypt
Time pressure are low
Decision made slower
than USA
71. HOW DOES NATIONAL CULTURE AFFECT
MANAGER’S DECISION-MAKING?
• Italy, history and traditions are valued,
managers tend to rely on tried and
proven alternatives.
• Decision making in Japan is much more
group oriented than in the United
States.
• The Japanese value conformity and
cooperation. Japanese CEOs collect a
large amount of information, to build
consensus, called “ringisei.” Managerial
decisions take a long-term perspective.
• France, autocratic decision making is
widely practiced, and managers avoid
risks.
• Managerial styles in Germany reflect
the German culture’s concern for
structure and order, extensive rules and
regulations, and managers accept that
decisions must go through channels
Germany
Structure and order
managerial styles
Extensive rules &
regulations
France
Autocratic decision
making
Managers avoid risks
Japan
Group oriented than
USA
Value conformity &
Cooperation “ringisei”
72. HOW DOES NATIONAL CULTURE AFFECT
MANAGER’S DECISION-MAKING?
• Expertise is the foundation of all
creative work. Creative-thinking skills
encompass personality
characteristics associated with
creativity, the ability to use analogies,
as well as the talent to see the
familiar in a different light.
• Individual traits associated with the
development of creative ideas
include intelligence, independence,
self-confidence, risk-taking, an
internal locus of control, tolerance for
ambiguity, and perseverance in the
face of frustration.
73. HOW DOES NATIONAL CULTURE AFFECT
MANAGER’S DECISION-MAKING?
• Intrinsic task motivation is the
desire to work on something
because it’s interesting, involving,
exciting, satisfying, or personally
challenging.
• Determines the extent to which
individuals fully engage their
expertise and creative skills.
• Creative people often love their
work, to the point of seeming
obsessed.
74. FIVE ORGANIZATIONAL FACTORS CAN IMPEDE CREATIVITY
• Expected evaluation - focusing on
how your work is going to be
evaluated.
• Surveillance—being watched while
you’re working.
• External motivators - emphasizing
external, tangible rewards.
• Competition - facing win-lose
situations with your peers.
• Constrained choices - being given
limits on how you can do your work.
75. DESIGN THINKING
• Design thinking is approaching
management problems as designers
approach design solutions,
• Design thinking says that managers should
look at problem identification
collaboratively and integrated with the
goal of gaining a deep understanding of
the situation.
• Design thinking means opening up your
perspective and gaining.
• Insights by using observation and inquiry
skills, and not relying simply on rational
analysis.
76. BIG DATA ANALYST
• What does big data have to do with
decision making?
• Big data is using math modeling, predictive
algorithms, and artificial intelligence
software to measure and monitor people
and machines like never before. But
managers need to really examine and
evaluate how big data might contribute to
their decision making before jumping in
with both feet.
77. WHAT CONTEMPORARY DECISION-MAKING ISSUES DO MANAGERS FACE?
VideoTime–“ManagingCrossCulturalRemoteTeams“
“Ricardo talks about the every day
complexities of working remotely and
managing a team of 30 people from very
different cultures and backgrounds”.
Ricardo Fernandez is not an expert in
cross cultural communication but has
over the last 10 years been working
remotely with several companies and
teams from many different countries. He
was born in Spain but spent most of his
time living abroad between the USA,
France, Netherlands, and Puerto Rico,
where he learnt how to adapt to the
differences in every day conversation
and activities.
https://www.youtube.com/watch?v=QIo
AkFpN8wQ
