1. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.

2. The Decision Making Process
The act of choosing one alternative from among a set of alternatives.
Decision-Making Process:
Recognizing and defining the decision situation
Identifying alternatives
Choosing the “best” alternative
Putting the alternative into practice
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3. The Nature of Decision Making
Decision-Making Process (cont’d)
An effective decision optimizes some set of factors such as profits, sales, employee welfare, and market share.
Managers make decisions about both problems and opportunities.
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4. Types of Decisions Programmed Decision Nonprogrammed Decision
is a fairly structured decision or one that recurs with some frequency or both.
Example: Starting your car in the morning.
Nonprogrammed Decision
is relatively unstructured and occurs much less often a programmed decision.
Example: Choosing a vacation destination.
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5. Decision-Making Conditions
Decision Making Under Risk
Decision Making Under Uncertainty
Decision Making Under Certainty
Conditions Affecting Decision Making
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6. Behavioral Aspects of Decision Making
Satisficing
Bounded rationality
Coalitions
Escalation of commitment
Intuition
Risk propensity
Influences on Decision Making
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7. Managerial Ethics and Decision Making
Individual Ethics
Managerial Ethics
Employees
Other economic agents
Organizational Ethics
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8. Group and Team Decision Making
Interacting group or team
Delphi groups
Nominal group
Forms of Group Decision Making
© 2010 South-Western, Cengage Learning, Inc. All rights reserved.

9. Key Terms decision-making decision-making process programmed decision
nonprogrammed decision
state of certainty
stage of risk
state of uncertainty
classical decision model
steps in rational decision making
administrative model
bounded rationality
satisficing
coalition
intuition
escalation of commitment
risk propensity
interacting groups
Delphi group
nominal group
groupthink
© 2010 South-Western, Cengage Learning, Inc. All rights reserved.