Post on 23-Dec-2015
KNOWLEDGEKNOWLEDGE OBJECTIVESOBJECTIVES
Describe the fundamentals of decision making, including the basic steps and the need to balance ideal and satisfactory decisions.
Discuss four important decision-making styles, emphasizing the effectiveness of each one.
Explain the role of risk-taking propensity and reference points.
Define cognitive bias and explain the effects of common types of cognitive bias on decision making.
Explain the role of moods and emotions in decision making.
Discuss common pitfalls of group decision making.
Describe key group decision-making techniques.
Explain the factors managers should consider in determining the level of associate involvement in managerial decisions.
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DECISION-MAKING PROCESS
Adapted from Exhibit 10-1: The Decision-Making Process
Define the Problem
Identify Criteria
Gather and Evaluate Data
List and Evaluate Alternatives
Select Best Alternative
Implement and Follow Up
Feedback
TYPES OF DECISIONS
Optimal
Best Choice
maximize objectives
complete knowledge
know outcomes
Satisficing
Satisfactory Choice
satisfies objectives
incomplete knowledge
probable outcomes
DECISION MAKING STYLESIndividuals’ predispositions can affect
decision process at two critical stages
DECISION-MAKING STYLES
Adapted from Exhibit 10-2: Influence of Decision Styles
Implement and Follow Up
Pe
rce
ptu
al
Infl
ue
nce
s Intuition
Ju
dg
men
tal
Infl
ue
nce
s
Fe
edb
ack
Identify Criteria
Gather and Evaluate
Information
List and Evaluate Alternatives
Select Best Alternative
Define the Problem
Using the five senses to identify
factual details
FeelingThinking
Subjective values with emotional and
personal factors
Objective analysis, rational
procedures
DEGREE OF ACCEPTABLE RISK
Risk
outcome of an action is uncertain
Risk-taking Propensity
willingness to take chances
lower versus higher propensity
Reference Point
performance level used to evaluate current standing
MOODS AND EMOTIONS
Mood
General positive or negative feelings disconnected from any event or stimulus
Positive Mood
neglect decision details
less conservative
more creative and risk-taking
Emotion
Specific feelings associated with particular events, people, or other stimuli
Regret
Anger
DIVERSITY-BASED INFIGHTING
Group members engage in unproductive, negative conflict over differing views.
DECISION-MAKING PROCESS
Adapted from Exhibit 10-3: Group Decision-Making Phenomena – Pitfalls and Techniques
Risky Shift
Devil’s Advocacy
Brainstorming
Group Decision Making
Dialectical Inquiry
Delphi Technique
Nominal Group
Technique
Diversity-based
InfightingGroupthink
Common Information
Bias
WHO SHOULD DECIDE?
Adapted from Exhibit 10-4: Managerial Approaches to Associate Involvement in Decision Making
Low High
Level of Associate Involvement in Decision
AI Manager solves problem or makes decision aloneAII Manager requests information but not alternativesCI Manager explains problem individually but makes decision
aloneCII Manager explains problem to group, gets suggestions,
makes decision aloneGII Manager explains problem to group, facilitates problem
solving, implements decision supported by the group
AI AII CI CII GII
VROOM-YETTON METHOD
14-CII
10-AII
4-AI
1-AI 2-AI
3-GII
5-AI
9-AII
11-CII
13-CII
12_GII
6-GII7-CII
8-CI
No
Yes
No
No
No
No
NoNo
No
No
NoNo
NoNo
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Decision points
Recommended strategies
A B C D E F G
Pro
ble
m
Adapted from Exhibit 10-5: Decision Tree Method for Diagnosing the Appropriate Level of Subordinate Involvement in Decisions
GROUP DECISION MAKING
Adapted from Exhibit 10-6: Advantages and Disadvantages of Group Decision Making
Accumulate more knowledge and facts and generate better alternatives.
Often display superior judgment when evaluating alternatives.
Involvement in decisions leads to a higher level of acceptance and satisfaction.
Can result in growth for members of the group.
AdvantagesAdvantagesTake more time to reach decisions than do individuals.
Social interactions may lead to premature compromise.
Often dominated by one or two “decision leaders.”
Managers may rely too much on group decisions – lose their own skills.
DisadvantagesDisadvantages
STRATEGIC LENS
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You are a manager of a unit with 25 associates. You have just been informed that you must lay off 20 percent of the associates in your unit. What process will you follow to make the decision and to implement it?
If you made a decision that your manager told you was important for the organization and later you learned that you made an error in that decision, what actions would you take? Assume that others will not notice the error for some time.
You make decisions on a daily basis. Do you find it difficult to make decisions, especially those of importance? What can you do to improve your decision-making abilities?