1、Fundamentals of Management Tenth Edition Chapter 4 Foundations of Decision MakingLearning Objectives4.1 Describe the decision-making process.4.2 Explain the three approaches managers can use to make decisions.4.3 Describe the types of decisions and decision-making conditions managers face.4.4 Discus
2、s group decision making.4.5 Discuss contemporary issues in managerial decision making.Learning Objective 4.1 Describe the decision-making process.How Do Managers Make Decisions?Exhibit 4-1 How Do Managers Make Decisions?Identifying a Decision ProblemProblem:a discrepancy between an existing and a de
3、sired state of affairs.Identifying Decision CriteriaRelevant Factors:Price Model Size Manufacturer Options Repair recordWeighting Criteria Most important criterion assigned a weight of 10 Other weights assigned against this standardExhibit 4-2 Important Criteria and Weights in a Car-Buying DecisionC
4、riterionWeightPrice10Interior comfort 8Durability 5Repair record 5Performance 3Handling 1Developing Alternatives(1 of 2)Alternatives Jeep Compass Ford Focus Hyundai Elantra Ford Fiesta SES Volkswagen Golf Toyota Prius Mazda 3 MTDeveloping Alternatives(2 of 2)Kia Soul BMW i3 Nissan Cube Toyota Camry
5、Honda Fit Sport MTAnalyzing AlternativesExhibit 4-3 Assessment of Possible Car AlternativesAlternativesInitial PriceInterior ComfortDurabilityRepair RecordPerformanceHandlingTotalJeep Compass210875537Ford Focus96568640Hyundai Elantra85664635Ford Fiesta SES95676538Volkswagen Golf569107744Toyota Prius
6、105643331Mazda 3 MT48768942Kia Soul76865638BMW i397644737Nissan Cube5854101042Toyota Camry6510106643Honda Fit Sport MT86657840Selecting the Best Alternative(1 of 2)Exhibit 4-4 Evaluation of Car Alternatives:Assessment Criteria Criteria WeightAlternativesblankInitial Price10blankInteriorComfort 8blan
7、kDurability5blankRepairRecord 5blankPerformance3blankHandling1TotalJeep Compass220108084073551555195Ford Focus99064852563082466223Hyundai Elantra88054063063041266198Ford Fiesta SES99054063073561855218Volkswagen Golf550648945105072177221Toyota Prius101005406304203933202Selecting the Best Alternative(
8、2 of 2)Exhibit 4-4 continuedAlternativesblankInitial Price10blankInteriorComfort 8blankDurability5blankRepairRecord 5blankPerformance3blankHandling1TotalMazda 3 MT44086473563082499202Kia Soul77064884063051566209BMW i399075663042041277215Nissan Cube55086452542010301010199Toyota Camry66054010501050618
9、66224Honda Fit Sport MT88064863052572188212Implementing the DecisionDecision implementation:putting a decision into action.Evaluating the DecisionAppraising the outcome of the decision Was the problem resolved?Common ErrorsExhibit 4-5 Common Decision-Making Errors and BiasesLearning Objective 4.2 Ex
10、plain the three approaches managers can use to make decisions.Decisions Managers Make(1 of 4)Exhibit 4-6 Decisions Managers May MakePlanning What are the organizations long-term objectives?What strategies will best achieve those objectives?What should the organizations short-term objectives be?How d
11、ifficult should individual goals be?Decisions Managers Make(2 of 4)Exhibit 4-6 continuedLeading How do I handle unmotivated employees?What is the most effective leadership style in a given situation?How will a specific change affect worker productivity?When is the right time to stimulate conflict?De
12、cisions Managers Make(3 of 4)Exhibit 4-6 continuedOrganizing How many employees should I have report directly to me?How much centralization should there be in an organization?How should jobs be designed?When should the organization implement a different structure?Decisions Managers Make(4 of 4)Exhib
13、it 4-6 continuedControlling What activities in the organization need to be controlled?How should those activities be controlled?When is a performance deviation significant?What type of management information system should the organization have?Source:Robbins,Stephen P.,Coulter,Mary,Management,13th E
14、d.,2016,p.45.Reprinted and electronically reproduced by permission of Pearson Education,Inc.,New York,NY.Rational ModelRational decision making”choices that are consistent and value-maximizing within specified constraints.Rationality is not a very realistic approach.Bounded Rationality Satisfice Esc
15、alation of commitment A more realistic approach.Intuitive Decision Making(1 of 2)Exhibit 4-7 What Is Intuition?Intuitive Decision Making(2 of 2)Sources:Based on J.Evans,“Intuition and Reasoning:A Dual-Process Perspective,”Psychological Inquiry,OctoberDecember 2010,pp.313326;T.Betsch and A.Blockner,“
16、Intuition in Judgment and Decision Making:Extensive Thinking Without Effort,”Psychological Inquiry,OctoberDecember 2010,pp.279294;R.Lange and J.Houran,“A Transliminal View of Intuitions in the Workplace,”North American Journal of Psychology,12,no.3(2010),pp.501516;E.Dane and M.G.Pratt,“Exploring Int
17、uition and Its Role in Managerial Decision Making,”Academy of Management Review,January 2007,pp.3354;M.H.Bazerman and D.Chugh,“Decisions Without Blinders,”Harvard Business Review,January 2006,pp.8897;C.C.Miller and R.D.Ireland,“Intuition in Strategic Decision Making:Friend or Foe in the Fast-Paced 2
18、1st Century,”Academy of Management Executive,February 2005,pp.1930;E.Sadler-Smith and E.Shefy,“The Intuitive Executive:Understanding and Applying Gut Feel in Decision-Making,”Academy of Management Executive,November 2004,pp.7691;and L.A.Burke and M.K.Miller,“Taking the Mystery Out of Intuitive Decis
19、ion Making,”Academy of Management Executive,October 1999,pp.9199.Learning Objective 4.3 Describe the types of decisions and decision-making conditions that managers face.Types of ProblemsStructured problem:straightforward,familiar,easily defined.Unstructured problem:new or unusual for which informat
20、ion is ambiguous or incomplete.Types of Decisions(1 of 2)Programmed:repetitive decisions that can be handled using a routine approach.Types of Decisions(2 of 2)Nonprogrammed:A unique and nonrecurring decision that requires a custom made solution.Problems,Decision Types,and Organizational LevelsExhib
21、it 4-8 Types of Problems,Types of Decisions,and Organizational LevelDecision-Making Conditions Certainty Risk UncertaintyLearning Objective 4.4 Discuss group decision making.How Do Groups Make Decisions?Decisions are often made by groups representing the people who will be most affected by those dec
22、isions.Committees Task forces Review panels Work teamsAdvantages of Group Decision Making Diversity of experiences/perspectives More complete information More alternatives generated Increased acceptance of solution Increased legitimacyDisadvantages of Group Decision Making Time-consuming Minority do
23、mination Ambiguous responsibility Pressures to conformGroupthinkWhen a group exerts extensive pressure on an individual to withhold his or her different views in order to appear to be in agreement.What it does How it occurs How to minimize itWhen Are Groups Most Effective?Individual Faster decision
24、making More efficient use of work hoursGroup More accurate decisions More creative More heterogeneous representation Greater acceptance of final solutionImproving Group Decision MakingMake group decisions more creative by:Brainstorming The nominal group technique Electronic meetingsLearning Objectiv
25、e 4.5 Discuss contemporary issues in managerial decision making.Contemporary Issues(1 of 4)National culture:influences the way decisions are made and the degree of risk involved.Contemporary Issues(2 of 4)Creativity lets the decision maker:Understand a problem more fully See problems others cant Ide
26、ntify all viable alternativesContemporary Issues(3 of 4)Design thinking:approaching management problems as designers approach design problems.Contemporary Issues(4 of 4)Big Data:the vast amounts of quantifiable information that can be analyzed by highly sophisticated data processing.Changing the way managers make decisions.
