1. 7 PROBLEM ANALYSIS AND DECISION MAKING Supervision Today! 7th Edition
Planning, organizing, staffing, controlling, and decision making
PROBLEM ANALYSIS AND DECISION MAKING 7
Supervision Today!
7th Edition
Stephen Robbins
David DeCenzo
Robert Wolter

2. Chapter Outcomes List the 7 steps in the decision-making process.
Describe expected value analysis.
Explain the four types of decision styles.
Identify and explain the common decision-making errors.
Describe the two types of decision problems and the two types of decisions that are used to solve them.
Compare and contrast group decision-making and individual decision-making.
List and describe three techniques for improving group decision-making.
Explain three different ethical viewpoints.
Supervision Today!, 7/e
Robbins, DeCenzo, Wolter
© 2013 Pearson Education
Uppers Saddle River, NJ 07458, All Rights Reserved

3. The decision-making process.
EXHIBIT 7–1
The decision-making process.
Supervision Today!, 7/e
Robbins, DeCenzo, Wolter
© 2013 Pearson Education
Uppers Saddle River, NJ 07458, All Rights Reserved

4. EXHIBIT 7–3 Payoff table for ski jacket decision.
Supervision Today!, 7/e
Robbins, DeCenzo, Wolter
© 2013 Pearson Education
Uppers Saddle River, NJ 07458, All Rights Reserved

5. EXHIBIT 7–4
Decision tree and expected values for renting a large or small retail space.
Supervision Today!, 7/e
Robbins, DeCenzo, Wolter
© 2013 Pearson Education
Uppers Saddle River, NJ 07458, All Rights Reserved

6. Conditions of decision-making
Certainty
Risk
Uncertainty
Supervision Today!, 7/e
Robbins, DeCenzo, Wolter
© 2013 Pearson Education
Uppers Saddle River, NJ 07458, All Rights Reserved

7. Decision tools Expected value analysis Decision tree Marginal analysis
Permits decision makes to place monetary value on likely consequences
Decision tree
Assigns probabilities to possible outcomes and calculates payoffs for decisions
Marginal analysis
Deals with additional cost in decisions rather than average cost
Supervision Today!, 7/e
Robbins, DeCenzo, Wolter
© 2013 Pearson Education
Uppers Saddle River, NJ 07458, All Rights Reserved

8. EXHIBIT 7–5 Decision-style model. Supervision Today!, 7/e
Robbins, DeCenzo, Wolter
© 2013 Pearson Education
Uppers Saddle River, NJ 07458, All Rights Reserved

9. Common errors in decision-making
Availability heuristic
Judgment based on readily available information
Representative heuristic
Matching the likelihood of an occurrence with something familiar
Escalation of commitment
Increasing commitment to a decision despite negative information
Supervision Today!, 7/e
Robbins, DeCenzo, Wolter
© 2013 Pearson Education
Uppers Saddle River, NJ 07458, All Rights Reserved

10. Advantages of group decisions
Provides more complete information
Generates more alternatives
Increases solution acceptance
Increases legitimacy
Supervision Today!, 7/e
Robbins, DeCenzo, Wolter
© 2013 Pearson Education
Uppers Saddle River, NJ 07458, All Rights Reserved

11. Disadvantages of group decision-making
Time-consuming
Minority domination
Pressure to conform
Ambiguous responsibility
Supervision Today!, 7/e
Robbins, DeCenzo, Wolter
© 2013 Pearson Education
Uppers Saddle River, NJ 07458, All Rights Reserved

12. Improving group decision-making
Brainstorming
Nominal group technique
Electronic meetings
Supervision Today!, 7/e
Robbins, DeCenzo, Wolter
© 2013 Pearson Education
Uppers Saddle River, NJ 07458, All Rights Reserved

13. Common rationalizations of unethical behavior
“It’s not really illegal or immoral.”
“It’s in my (or the organization’s) best interest.”
“No one will find out.”
“Because it helps the organization, the organization will condone it and protect me.”
Supervision Today!, 7/e
Robbins, DeCenzo, Wolter
© 2013 Pearson Education
Uppers Saddle River, NJ 07458, All Rights Reserved

14. Three views on ethics Utilitarian view Rights view Justice view
Decisions made solely on basis of their outcomes
Rights view
Decisions are consistent with liberties set forth in Bill of Rights
Justice view
Impose and enforce rules fairly and impartially to achieve equitable distribution of benefits and costs
Supervision Today!, 7/e
Robbins, DeCenzo, Wolter
© 2013 Pearson Education
Uppers Saddle River, NJ 07458, All Rights Reserved

15. EXHIBIT 7–7 Three views on ethics. Supervision Today!, 7/e
Robbins, DeCenzo, Wolter
© 2013 Pearson Education
Uppers Saddle River, NJ 07458, All Rights Reserved