CHAPTER 7 MAKING DECISIONS

MANAGEMENT IN ACTION: DECISION-MAKING n Defined as u process of u identifying problems/opportunities u developing alternative solutions u choosing a preferred alternative u implementing the preferred alternative n Decision-making Approaches u programmed and nonprogrammed

SEVEN-STEP DECISION- MAKING PROCESS n Define the Problem/Opportunity u treat the problem not the symptom u gap analysis/force field analysis/SWOT analysis n Identify Limiting Factors n Develop Potential Alternatives

SEVEN-STEP DECISION- MAKING PROCESS n Analyze the Alternatives n Select the Best Alternative n Implement the Alternative(s) Chosen n Establish a Control and Evaluation System

ENVIRONMENTAL IMPACTS ON DECISION-MAKING n Degree of Uncertainty n Imperfect Resources n Internal Environment u superiors/subordinates u organizational systems n External environment

MANAGERIAL STYLE AND DECISION-MAKING n Personal decision-making approaches u rational/logical approach u nonrational /intuitive approach u predisposed decision model n Prioritization and timing of decisions n Tunnel Vision and overcommitment to previous decisions n Creativity/Involvement of all constituencies

GROUP DECISION MAKING n Brainstorming n Nominal Group Technique n Delphi Method n Advantages and Disadvantages of group decisions

QUANTITATIVE DECISION- MAKING TOOLS n Decision trees n Payback analysis n Simulations