THE MANAGER AS A DECISION MAKER

1. CHAPTER SEVEN:
THE MANAGER AS A DECISION MAKER
Julieth Tatiana Gualteros Perez
Management Information
Systems
"Executives do a lot of things besides making decisions. But only executives make
decisions. Therefore, the first managerial attitude is the to make effective decisions.
"(Drucker, 1989).

2. ■ Decision making is the process of identifying
problems and opportunities and then resolving them
■ Requires effort before and after choice
■ A good decision results in the selection of
appropriate objectives and courses actions that
increase organizational performance.
WHAT IS DECISION MAKING?

3. Decision making is a fundamental aspect of senior
management, managers must have the competitiveness and
responsibility to take assertive decisions
Managers make big decisions for organizations, the correct and
correct analysis of the decisions is made important in the good
use of available information
Decision making involves unforeseen and important situations
that
require a specific solution, sometimes with little time to think,
great
complexity and low tolerance for errors

4. • Is a repetitive decision that can be handled by a routine approach
• This allows Managers, have a viable and assertive alternative that leads to a
result successful, giving reliability an adequate performance
Programmed
decision
• Are unique and nonrecurring decisions that require a custom-made
solution
• Should be treated in a special way by that the manager does not
follow a common procedure, but creates several alternatives to be
followed, and that once the manager make the right decision to the
problem
nonprogram
med
decision

5. STEPS IN THE DECISION-MAKING
PROCESS
1. Recognize
the Need for
a Decision
2.Generate
Alternatives
3. Evaluate
Alternatives
The important issue is that they must recognize this need and respond in a
timely and appropriate manner.
A manager must generate a set of feasible alternative courses of action to take
in response to the opportunity or threat.
The manager must evaluate the advantages and disadvantages of each one.
The key is to define the opportunity or threat exactly and then specify the
criteria that should influence the selection of alternatives.

6. 1. Rank the various alternatives and make a decision.
2. Managers must be sure that all the information that is available is used
To ensure that a decision is implemented, top managers must:
a. Assign to middle managers the responsibility for making the follow-updecisions.
b. Give middle managers sufficient resources to achieve the goal.
c. Hold middle managers accountable for their performance.
• Conduct a retrospective analysis to see what they can learn from past successes or
failures .
• Managers must establish a procedure with which they can learn from the results
of past decisions
4. Choose Among
Alternatives
5.Implement the
Chosen Alternative
6. Learning from
Feedback

7. CRITERIA TO EVALUATE THE PROS AND CONS
OF ALTERNATIVE COURSES OF ACTION
a. Legality: Managers must ensure that a possible course of action is
legal.
b. Ethicalness: Managers must ensure that a possible course of
action is ethical and that it will not unnecessarily harm any
stakeholder group
c. Economic feasibility: Managers must decide whether the
alternatives can be accomplished, given the organization’s
performance goals, and do not cause harm to other goals of the
organization.
d. Practicality: Managers must decide whether they have the
capabilities and resources required to implement the alternative.

8. COGNITIVE BIASES AND DECISION MAKING
PRIOR HYPOTHESIS
BIAS
Is a cognitive bias
resulting from the
tendency to base
decisions on strong
prior beliefs even
when those beliefs are
wrong
REPRESENTATIVE BIAS
Is a cognitive bias resulting
from the tendency to
generalize inappropriately
from a small sample or from a
single vivid event or
episode.
ILLUSION OF CONTROL
• Is the tendency of
decision makers to
overestimate their
ability to control
activities and events.
• Top-level managers
tend to be over
confident about their
ability to succeed and to
control events.
ESCALATING COMMITMENT
• Some managers commit
more resources to the
project even if they
receive feedback that the
project is failing.
• Feelings of personal
responsibility for a
project bias the analysis
of decisionmakers and
lead to escalating
commitment
4 cognitive biases that are used by people
which can lead to poor decisions

9. GROUP DECISION MAKING
ADVANTAGES
a. When managers work as a team, their choices of
alternatives are less likely to suffer from biases.
b. They are able to draw on the group’s combined
skills and accumulated knowledge.
c. Group decision-making allows managers to
process more information and
correct each other’s errors
DISADVANTAGES:
a. Groups often take much longer than individuals to
make decisions.
b. Getting two or more managers to agree can be
difficult because managers’ preferences differ.
c. Group decision-making can be undermined by
biases.

10. CREATIVITY: PROMOTING GROUP CREATIVITY
1. To encourage creativity
organizations can make use
of the group problem solving
techniques
2. BRAINSTORMING is a
group problem-solving
technique in which
managers meet face-to-face
to generate and debate a
wide variety of alternatives
form which
to make a decision.

11. ■ NOMINAL GROUP
 Technique is a decision-
making technique in which
group members write down
ideas and solutions, read
their suggestions to the whole
group, and discuss and then
rank the alternatives
 DELPHI TECHNIQUE
 The Delphi technique is a
decision-making technique
in which group
members do not meet face to
face but respond in writing to
questions posed by the group
leader.

12. PROMOTING CREATIVITY AT THE GLOBAL
LEVEL
1. The Delphi technique is particularly useful when barriers of time and distance
separate managers
2. Organizations are under increasing pressure to reduce costs and develop
global products.
3. These organizations have centralized their R&D expertise to bring R&D
managers together from different countries.
4. Managers must take special steps to encourage creativity among people from
different countries who work together.

13. ORGANIZATIONAL LEARNING
AND CREATIVITY
■ Managers can increase their ability to make nonprogrammed decisions, those that
allow them to adapt to, modify, and alter their task environments.
ORGANIZATIONAL
LEARNING
is the process through which
managers seek to
improve employees’ desire
and ability to understand
and manage the
organization.
CREATIVITY
is the ability of a decision
maker to discover original
and novel Ideas that lead to
feasible alternative courses
of action
LEARNING
ORGANIZATION
Is one in which managers
doeverything possible to
maximize the potential for
organizational learning to take
place.

14. CREATING A LEARNING
ORGANIZATION
1. Top managers must allow every person in the organization
to develop a sense
of personal mastery.
2. Organizations need to encourage employees to develop and
use complex mental models.
3. Managers must do everything they can to promote group
creativity and team learning
4. Managers must emphasis the importance of building a
shared vision.
5. Managers must encourage systems thinking
6. Building a learning organization requires managers to
change their management assumptions radically.

15. CREATIVITY:
PROMOTING INDIVIDUAL CREATIVITY
1. People must be given the opportunity and freedom to generate new ideas.
2. Creativity results when managers have an opportunity to experiment, to take
risks, and to make mistakes and learn from them.
3. Creativity can be fostered by providing them with constructive feedback so that
they know how well they are doing.
4. It is also important for top managers to stress the importance of looking for
alternatives solutions and to visibly reward employees who come up with creative
ideas.

16. CONCLUSIONS
In the organizational sphere, decision-making is vital, since the solution of problems and circumstances
involves a process of obtaining, evaluating and application of information for each situation.
Decision making is one of the most interesting and pervasive concepts in all of management because we
make decisions concerning management concepts, such as leadership style,
motivation, managing conflict, human resources techniques
Adequate decision-making within an organization results transcendental, as this can lead to success, as well
as the creation of new competitive advantages and a high level of well-being