24.docx

9/24/09 8:22 AM Managers get paid to make decisions Strategic decisions (what business are we in?) Tactical decisions (how shall we compete?) Operational decision (who should we hire?) Decision-making is about solving problems Decision-making is a complex difficult process Programmed decisions: using rules for common everyday situations Nonprogrammed decisions: situations, which are Unique Poorly defined Unstructured Have large consequences The future is not ?knowable? How much info is available? What is the possibility Certainty Risk Uncertainty Ambiguity Classical model Goals are clearly understood All alternatives can be known Criteria for evaluating alternatives are known Assumes maker is a rational, logical Decision maker is trying to optimize or maximize outcomes This is an ?ideal? Works for programmed decision where probabilities can be calculated Managers expected to advance company?s best economic interests (make optimal decisions) Administrative model Based on work of Herbert Simon: how managers actually behave Not ?ideal? more ?real? Descriptive 2 important concepts Bounded rationality-we have to make arena smaller to try to behave rationally satisficing How managers actually make decision Intuition Political activity (dominant coalition) Political model Very real Decisions are complex Recognize problem Diagnose cause Develop alternatives Choose alternative Actions Evaluate feedback Decision style: directive Prefer clear cut solutions Make decisions quickly Consider 1 or 2 alternatives Efficient and rational Prefer rules and procedures Analytical style Prefer lots of data, info Carefully considers alternatives Objective, rational Try to use best data available Slower Conceptual style Broad range of info, data Socially printed Likes to talk about problem Considers many alternative Uses into from other sources Tries to be creative Behavioral style Deep concern for others Cares about feelings Personal connections Makes ?helping? decisions Who makes the decisions? Usually belongs to some kind of group Vroom-jago model Gauging the ?best amount? of participation depends on Knowing different styles Diagnostic questions Decision rules Management 9/24 9/24/09 8:22 AM 9/24/09 8:22 AM