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E. FRANK HARRISON

Fifth Edition

The Managerial

Decision-Making Process

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The Managerial Decision-Making ProcessThe Managerial Decision-Making ProcessFifth EditionFifth Edition

The Managerial Decision-Making ProcessThe Managerial Decision-Making ProcessFifth EditionFifth Edition

Author: E. Frank Harrison, Ph.D.Author: E. Frank Harrison, Ph.D.

Slides by Monique A. Pelletier, Ph.D.Slides by Monique A. Pelletier, Ph.D.

Author: E. Frank Harrison, Ph.D.Author: E. Frank Harrison, Ph.D.

Slides by Monique A. Pelletier, Ph.D.Slides by Monique A. Pelletier, Ph.D.

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General Motors and General Motors and Philip Morris Philip Morris

Chapter 14Chapter 14

Case Set No. 3

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Table 14.1 General Motors: A Chronology of Significant EventsTable 14.1 General Motors: A Chronology of Significant Events

Date Event

1978 GM’s CEO Thomas A. Murphy establishes a long-range strategic objective to use $40 billion to spend the “competition into the ground.”

1981 Roger B. Smith succeeds Thomas A. Murphy as GM’s CEO.

1982 Roger Smith conceives the Saturn automobile.

1983 GM enters into a joint venture with Toyota (NUMMI).

1983 GM creates the Saturn Corporation and earmarks $5.1 billion to produce the Saturn automobile.

1984 GM purchases Electronic Data Systems (EDS) from Ross Perot for $2.5 billion.

1984 GM undertakes a vast internal reorganization.

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Table 14.1 General Motors: A Chronology of Significant Events Table 14.1 General Motors: A Chronology of Significant Events (cont’d)(cont’d)

Date Event

1985 GM purchases Hughes Aircraft for $5.2 billion in cash and stock.

1986 GM commences production of the Saturn automobile.

1990 The Saturn automobile comes to market.

1990 Roger B. Smith retires as GM’s CEO.

1990 Robert C. Stempel is named GM’s CEO.

1992 Robert C. Stempel steps down as GM’s CEO.

1992 John (Jack) Smith, Jr. is named GM’s CEO.

2

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Comparative Case Summaries of Comparative Case Summaries of Decision SuccessDecision Success

Managerial attitudes toward the decision-Managerial attitudes toward the decision-making processmaking process

Philip Morris: open decision-makingPhilip Morris: open decision-making

process; attainable objectiveprocess; attainable objective

General Motors: closed decision-making General Motors: closed decision-making process; unattainable objective process; unattainable objective

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Comparative Case Summaries of Comparative Case Summaries of Decision Success Decision Success (cont’d)(cont’d)

Managerial attitudes toward the Managerial attitudes toward the decisiondecision

Philip Morris: Judgmental decision Philip Morris: Judgmental decision making strategy; satisficing outcome making strategy; satisficing outcome

General Motors: computational General Motors: computational decision-making strategy; maximized decision-making strategy; maximized outcome outcome

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Comparative Case Summaries of Comparative Case Summaries of Decision Success Decision Success (cont’d)(cont’d)

Strategic decision typeStrategic decision type

Philip Morris:Philip Morris: TYPE A TYPE A

General Motors:General Motors: TYPE D TYPE D