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Lecture Management (2nd edition) – Chapter 7: Making better decisions

This chapter’s objectives are to: Describe the seven steps of the decision making process, identify problems by analyzing causes and effects, describe how managers generate alternatives, predict possible consequences of alternatives, demonstrate how managers select the most desirable alternative. | Chapter 7 Making Better Decisions Describe the seven steps of the decision making process Identify problems by analyzing causes and effects Describe how managers generate alternatives Predict possible consequences of alternatives Demonstrate how managers select the most desirable alternative Learning Objectives Types of decisions (p. 171) Programmed decision – based on pre-established rules in response to a recurring situation (p. 172) Nonprogrammed decision – based on reason and/or intuition in response to a unique situation that requires a tailored decision Classical model – normative model that leads to an optimal decision, assuming full availability of information, sufficient time, and rationality of the decision maker Optimal decision – best possible decision given all the needed information Decisions That Make a Difference (p. 170) Classical model Decisions That Make a Difference (cont.) Figure 7.2 Seven steps to better decision making (p. 173) Decisions That Make a Difference . | Chapter 7 Making Better Decisions Describe the seven steps of the decision making process Identify problems by analyzing causes and effects Describe how managers generate alternatives Predict possible consequences of alternatives Demonstrate how managers select the most desirable alternative Learning Objectives Types of decisions (p. 171) Programmed decision – based on pre-established rules in response to a recurring situation (p. 172) Nonprogrammed decision – based on reason and/or intuition in response to a unique situation that requires a tailored decision Classical model – normative model that leads to an optimal decision, assuming full availability of information, sufficient time, and rationality of the decision maker Optimal decision – best possible decision given all the needed information Decisions That Make a Difference (p. 170) Classical model Decisions That Make a Difference (cont.) Figure 7.2 Seven steps to better decision making (p. 173) Decisions That Make a Difference (cont.) Figure 7.3 Adaptive management (p. 173) Approach to decision making that requires managers to use critical thinking, collaboration, and reflection skills to make nonprogrammed decisions Important in a rapidly changing business environment Decisions That Make a Difference (cont.) Ambiguity (p. 174) Information about the situation, goals, or criteria that is incomplete or can be interpreted in multiple ways Symptomatic effects (p. 174) Observable behaviors related to underlying causal variables Problems – undesirable behaviors Are noticed due to their symptomatic effects Identifying and Understanding the Problem (p. 173) Underlying causes (p. 175) Behaviors that lead to a desired or undesired symptomatic effect Intermediate causes – plausible and easily found Root causes Revealed by: Systemic-based analysis – takes into account the array of all known variables associated with a problem and its symptoms, including behavior over time Policy-based analysis – isolates the variables in