Chapter 7 - Individual and group decision making: How managers make things happen. In this chapter, we will address the following questions: How do people know when they’re being logical or illogical? How can I improve my decision making using evidence-based management and business analytics? How do I decide to decide?. | Chapter Seven Individual & Group Decision Making: How Managers Make Things Happen McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. Major Questions You Should Be Able to Answer How do people know when they’re being logical or illogical? How can I improve my decision making using evidence-based management and business analytics? How do I decide to decide? Major Questions You Should Be Able to Answer What guidelines can I follow to be sure that decisions I make are not just lawful but ethical? Trying to be rational isn’t always easy. What are the barriers? How do I work with others to make things happen? Two Kinds of Decision Making Decision choice made from among available alternatives Decision making process of identifying and choosing alternative courses of action Rational Decision Making Figure Rational Decision Making Rational model of decision making explains how managers should make decisions assumes managers will make logical decisions that will be optimum in furthering the organization’s interest also called the classical model Successful Implementation - Plan carefully Be sensitive to those affected Evaluation - What should you do if action is not working? Give it more time Change it slightly Try another alternative Start over Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6- Nonrational Decision Making Nonrational models of decision making assume that decision making is nearly always uncertain and risky, making it difficult for managers to make optimal decisions Bounded Rationality Bounded Rationality suggests that the ability of decision makers to be rational is limited by numerous constraints complexity, time and money, cognitive capacity Satisficing and Incremental Models Satisficing Model managers seek alternatives until they find one that is satisfactory, not optimal Incremental Model managers take small, short-term steps to alleviate a problem Intuition Model Intuition making a choice without the use of conscious thought or logical inference sources are expertise and feelings Analytics Analytics sophisticated forms of business data analysis portfolio analysis, time-series forecast also called business analytics Decision-Making Styles Figure The Ethical Decision Tree Figure Three Effective Reactions: Deciding to Decide Importance “How high priority is this situation?” Credibility “How believable is the information about the situation?” Urgency “How quickly must I act on the information about the situation?” Disadvantages of Group Decision Making A few people dominate or intimidate Groupthink Satisficing Goal displacement
