principles of management
Download
Skip this Video
Download Presentation
Principles of Management

Loading in 2 Seconds...

play fullscreen
1 / 22

Principles of Management - PowerPoint PPT Presentation


  • 96 Views
  • Uploaded on

Principles of Management. Week 4 – Decision Making. Rational Decision Making 8-step Process. 1. Identification of problem 2. Identification of Decision Criteria 3. Allocation of weights to criteria 4. Development of alternatives 5. Analysis of alternatives 6. Decide on an alternative

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'Principles of Management' - rock


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
principles of management

Principles of Management

Week 4 – Decision Making

rational decision making 8 step process
Rational Decision Making 8-step Process
  • 1. Identification of problem
  • 2. Identification of Decision Criteria
  • 3. Allocation of weights to criteria
  • 4. Development of alternatives
  • 5. Analysis of alternatives
  • 6. Decide on an alternative
  • 7. Implementation of decision
  • 8. Evaluation of decision
the decision making process
The Decision-Making Process

Allocation of

Weights to

Criteria

Problem

Identification

Identification of

Decision Criteria

Development of

Alternatives

Acer

Compaq

Gateway

HP

Micromedia

NEC

Sony

Toshiba

“My salespeople

need new computers”

Price

Weight

Warranty

Screen type

Reliability

Screen size

Reliability 10

Screen size 8

Warranty 5

Weight 5

Price 4

Screen type 3

Analysis of

Alternatives

Selection of an

Alternative

Implementation

of an Alternative

R S W W P S

Acer 4 3 4 3 2 6

Compaq 3 4 5 2 6 7

Gateway 9 6 7 7 8 2

HP 3 5 6 7 6 5

Micromedia 2 2 3 4 5 4

NEC 3 4 5 6 7 2

Sony 7 5 6 4 2 8

Toshiba 3 4 5 6 7 3

Acer 125

Compaq 142

Gateway 246

HP 174

Micromedia 103

NEC 151

Sony 192

Toshiba 154

Gateway

Evaluation

of Decision

Effectiveness

about rational decision making
About Rational Decision Making
  • Is it always possible to make rational decisions?
slide6
Single, well-

defined goal

is to be achieved

Problem is

clear and

unambiguous

All alternatives

and consequences

are known

Rational

Decision

Making

Preferences

are clear

Final choice

will maximize

payoff

Preferences

are constant

and stable

No time or cost

constraints exist

bounded rationality
Bounded Rationality

behave rationally within the parameters of a simplified decision-making process that is limited by an individual’s ability to process information

satisfice - accept solutions that are “good enough”

intuitive decision making
Intuitive decision making

Based on “gut feeling”

subconscious process of making decisions on the basis of experience, values, and emotions

does not rely on a systematic or thorough analysis of the problem

generally complements a rational analysis

types of problems decisions
Types of Problems & Decisions

Well-Structured Problems - straightforward, familiar, and easily defined

Programmed Decisions - used to address structured problems

minimize the need for managers to use discretion

facilitate organizational efficiency

types of problems and decisions
Types of Problems and Decisions

Poorly-Structured Problems - new, unusual problems for which information is ambiguous or incomplete

Nonprogrammed Decisions - used to address poorly- structured problems

produce a custom-made response

more frequent among higher-level managers

Procedure, Rule, & Policy

types of problems level in the organization
Types of Problems & Level In the Organization

Ill-structured

Top

Type of

Problem

Level in

Organization

Lower

Well-structured

Programmed

Decisions

Nonprogrammed

Decisions

things to consider
Things to consider . . .

Certainty– how certain is a particular outcome?

Risk– how much risk can you take?

expected value - the conditional return from each possible outcome

Uncertainty –Limited information prevents estimation of outcome probabilities for alternatives.

what to do
What to do?

maximax choice – optimistic

maximizing the maximum possible payoff

taking the best of all possible cases

maximinchoice – pessimistic

maximizing the minimum possible payoff

taking the best of the worst cases

minimax- minimize the maximum “regret” (difference between what you get and the best case)

decision making styles
Decision-Making Styles
  • Dimensions of Decision-Making Styles
    • Value orientations
      • Task and technical concerns
      • People and social concerns
    • Tolerance for ambiguity
      • Low tolerance: require consistency and order
      • High tolerance: multiple thoughts simultaneously
decision making styles1
Analytical
  • Prefer complex
  • problems
  • Carefully analyze
  • alternatives
  • Enjoy solving
  • problems
  • Willing to use
  • innovative
  • methods
Decision-Making Styles
  • Directive
  • Prefer simple,
  • clear solutions
  • Make decisions
  • rapidly
  • Do not consider
  • many alternatives
  • Rely on existing
  • rules
  • Conceptual
  • Socially oriented
  • Humanistic and
  • artistic approach
  • Solve problems
  • creatively
  • Enjoy new ideas
  • Behavioral
  • Concern for their
  • organization
  • Interest in helping
  • others
  • Open to
  • suggestions
  • Rely on meetings
decision making styles2
Decision Making Styles

High

Analytical

Conceptual

Directive

Behavioral

Tolerance for Ambiguity

Low

Tasks and TechnicalConcerns

People and SocialConcerns

Value Orientation

common errors in decision making
Common Errors in Decision Making
  • Over-confidence
  • Hindsight
  • Self-serving
  • Sunk costs
  • Randomness
  • Representation
  • Availability
  • Framing
  • Confirmation
  • Selective perception
  • Anchoring
  • Immediate gratification
advantages and disadvantages of group aided decision making
Advantages and Disadvantages of Group-Aided Decision Making

Advantages Disadvantages

1. Greater pool of knowledge 1. Social pressure

2. Different perspectives 2. Minority domination

3. Greater comprehension 3. Logrolling

4. Increased acceptance 4. Goal displacement

5. Training ground 5. “Groupthink”

slide22
Decision-Making Approach
  • Rationality
  • Bounded Rationality
  • Intuition
  • Types of Problems and Decisions
  • Well-structured
  • - programmed
  • Poorly structured
  • - nonprogrammed
  • Decision
  • Choose best
  • alternative
  • - maximizing
  • - satisficing
  • Implementing
  • Evaluating
  • Decision-Making Conditions
  • Certainty
  • Risk
  • Uncertainty
  • Decision Maker Style
  • Directive
  • Analytic
  • Conceptual
  • Behavioral

Decision-Making

Process

ad