CHAPTER 7

MAKING DECISIONSMAKING DECISIONS

MANAGEMENT IN ACTION: DECISION-MAKING Defined asDefined as

process ofprocess of identifying problems/opportunitiesidentifying problems/opportunities developing alternative solutionsdeveloping alternative solutions choosing a preferred alternativechoosing a preferred alternative implementing the preferred alternativeimplementing the preferred alternative

Decision-making ApproachesDecision-making Approaches programmed and nonprogrammed programmed and nonprogrammed

SEVEN-STEP DECISION-MAKING PROCESS Define the Problem/OpportunityDefine the Problem/Opportunity

treat the problem not the symptomtreat the problem not the symptom gap analysis/force field analysis/SWOT gap analysis/force field analysis/SWOT

analysisanalysis Identify Limiting FactorsIdentify Limiting Factors Develop Potential AlternativesDevelop Potential Alternatives

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

ENVIRONMENTAL IMPACTS ON DECISION-MAKING Degree of UncertaintyDegree of Uncertainty Imperfect ResourcesImperfect Resources Internal EnvironmentInternal Environment

superiors/subordinatessuperiors/subordinates organizational systemsorganizational systems

External environmentExternal environment

MANAGERIAL STYLE AND DECISION-MAKING Personal decision-making approachesPersonal decision-making approaches

rational/logical approachrational/logical approach nonrational /intuitive approachnonrational /intuitive approach predisposed decision modelpredisposed decision model

Prioritization and timing of decisionsPrioritization and timing of decisions Tunnel Vision and overcommitment to Tunnel Vision and overcommitment to

previous decisionsprevious decisions Creativity/Involvement of all constituenciesCreativity/Involvement of all constituencies

GROUP DECISION MAKING

BrainstormingBrainstorming Nominal Group TechniqueNominal Group Technique Delphi MethodDelphi Method Advantages and Disadvantages of group Advantages and Disadvantages of group

decisionsdecisions

QUANTITATIVE DECISION-MAKING TOOLS Decision treesDecision trees Payback analysisPayback analysis SimulationsSimulations