Decision MakingDecision Making

Types of questionsTypes of questions• What would you do about an

employee who seems uninterested and uncooperative but is needed because the company is short staffed.

• How do you decide whom to layoff. • How do you decide to keep

employees who fail to do their job.• How does a manager determine the

number of employees to hire.

• Why do managers base promotions or raises only on seniority or I can never prioritize people’s needs in scheduling. Seniority is what I felt was most important. What would you suggest for scheduling people.

• What does a manager do when allocated a tight budget and can’t do what they want with it.

• Are there situations where a manager should break the rules for an employee?

Case example: Hot Case example: Hot Managerial Issue Managerial Issue

• You have evidence that many of your employee are using e-mail for personal purposes. Low cost technology is readily available to monitor e-mail use.

• What do you do in this situation in terms of purchasing technology, monitoring e-mail use, and discipline.

• Think about it quickly by self and then in teams.

• Nothing in writing.

PurposePurpose• Different decision styles• Focus on systematic thinking• Pitfalls to effective decision making• Being creative in decision making• Consider this decision and other

decisions as well.

DefinitionsDefinitions• Problem solving identifying a taking

action to resolve problems.• A Decision is a choice among

possible alternative courses of action.

Non programmed decisionsNon programmed decisions

• Non-programmed decisions applies a specific solution crafted for a unique problem.

• Programmed--traditional, historical, or fixed procedures to make decisions (different from book).

• Manager most commonly involved with which?

• Going back to earlier questions: Which are non-programmed?

Ways to address Non-Ways to address Non-programmed decisionsprogrammed decisions

• Systematic—rational and analytic fashion

• Intuitive—flexible and spontaneous, fashion: gut level (masculine), intuition (feminine).

Systematic thinking for Non Systematic thinking for Non programmed programmed

• Identifying decision situations• Developing objectives and criteria• Generating alternatives• Analyzing and selecting alternatives• Implement• Monitor and Evaluate

Common SenseCommon Sense• But lets see if its really all that

common.

IndentifyingIndentifying• Determining CAUSES for gaps between

desired state and actual state.• Differences between presenting

problems and underlying problems.• Nets of related problems: example

from a case.• Which problem address. • Intuition is critical in this step.

ExampleExample• Parking on campus• E-mail issue

PitfallsPitfalls• Symptoms not causes. E-mail • Defining problem too narrowly.

Campus parking• Choosing wrong problem--often from

functional biases (mkt, acct, finance, production). Restaurant—table attendants (marketing) and cooks (production). Cold food problem.

• Attempt to program non-programmed decisions. Routinize and simplify.

• Seeing this as an opportunity to do things right not eliminate bad things.

suggestionssuggestions• Generate a list of problems.

Consider interrelationships. • Where is the “real” bottleneck. Think

of the flow of activities to get to desired state.

• Threat into opportunities. Thermos--flat to declining sales to rubbermaid and redefine products. Budget cut question.

Developing objective and Developing objective and criteria.criteria.

• Want to compare different alternatives. What are we going to use to compare different alternatives simultaneously?

ProblemsProblems• Criteria developed before

alternatives. Criteria become “political”.

• Limited set of criteria—one. Frames alternatives. Example, with parking.

Some standard criteriaSome standard criteria• Cost• effectiveness measurements (could

be used to evaluate),• acceptance/feasibility, • Amount of change required (risk).

Generating alternativesGenerating alternatives• Separate Evaluation from generation

(in contrast to book that links two steps).

• In case: How many alternatives were actively considered?

• What were they.

BrainstormingBrainstorming• Write down all alternatives (good and

ridiculous).• Do not criticize.• Reward (fun)• Quantity is more important than

quality.• Groups are great.

PitfallsPitfalls• Evaluate alternatives prematurely• self-censorship

Evaluating AlternativesEvaluating Alternatives• Cost benefit analysis involves

comparing the costs and benefits of each potential course of action.

• Normally dollars attached. Consider direct and indirect costs benefits.

• Initiate a wellness plan example.

Cost benefit simplifiedCost benefit simplified• Plusses, minuses, points of

information about each alternative. Often difficult to arrive at specifics about net gain.

• Some issues go beyond tangible costs and benefits.

In casesIn cases• Which method was used to evaluate

alternatives. Was it clear to everyone hat every alternative had strengths and weaknesses and what they were.

PitfallsPitfalls• Overconfidence of with single

solution.• Not fully consider the negative

consequences.• Evaluate alternative sequentially

rather than concurrently.• Groups do better job—why?

ImplementationImplementation• Identify barriers of resistance to

choice; who and infrastructure of support. Example with e-mail if choose to restrict use.

• Develop tactics to minimize that resistance. How do you sell it. Some strategies.

PitfallsPitfalls• Inherent belief people will do as top

management requests.• Overconfidence.• All alternatives have plusses and

minuses. Minuses related to implementation. Ex. Phone courtesy.

• Groups do worse job.

Evaluation Evaluation • If not done leads to escalating

commitment.

Back to first questionsBack to first questions• How do you decide whom to layoff. • How do you decide to keep

employees who fail to do their job.• How does a manager determine the

number of employees to hire.

• Why do managers base promotions or raises only on seniority or I can never prioritize people’s needs in scheduling. Seniority is what I felt was most important. What would you suggest for scheduling people.

• What does a manager do when allocated a tight budget and can’t do what they want with it.

• Are there situations where a manager should break the rules for an employee?

summarysummary• Why do we so much time on something so

obvious?• How many have followed all the steps in

any problem solving situation?• Why?• Does it lead to better decisions.• Why is it not used more?• What can you do to ensure it is used more

frequently (not always appropriate).

Video and Decision makingVideo and Decision making

Group Decision Making.Group Decision Making.• Groups on average make better

decisions than individuals—exceptions duly noted.

Group aid decision making Group aid decision making byby

• More information and facts• Consider more alternatives• Gains support through participation• Communication

DisadvantagesDisadvantages• Slower (is that good or bad?)• Groups compromise—politics• Domination by small numbers• Limits managers ability to act quickly

when needed.• Biggest drawbacks time and politics.

Not in BookNot in Book• Decision by minority—dominant

person• Decision by majority—compromise to

get there• Decision by consensus—very hard to

create. But better decisions.

GroupthinkGroupthink• Usually decision by minority. No

efforts to achieve consensus.• Cohesive groups and dominated by

leader (minority). Leader knows what he/she wants. Group strives to please leader.

• Invulnerability• Morality• Unanimity• Self censorship• Pressure to conform if disagree• Stereotype opponents• Rationalizations• Mindguards.

• One solution-Considered.

Managing groupthinkManaging groupthink• Leader• Strive for consensus. Develop

climate OK to disagree.• Devil’s advocacy.• Bring in outsiders with different

views.• Break into subgroups.• Maintenance roles.

E-mail use revisited.E-mail use revisited.