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What are the 3 approaches managers can use to make decisions:

1. RATIONAL

- We assume that the managers decision making will be rational

- It means that manager will make logical and consistent choices to maximize value. After all

managers have all sorts of tools and techniques to help them be rational decision makers.

- he rational assumptions are as follows !

- A rational decision maker would be full" ob#ective and logical.

- $roblem faced would be clear% unambiguous & clear '

- (ecision maker would have a clear and specific goal to be achieved

- )now all possible alternatives and consequences

- *inal choice are made in the best interests of the organization.2. BON!"! RATIONALIT#

- +anagers make rational decisions but are bounded & limitated ' b" their abilit" to process

information.

- +anagers satisfice in which decision makers accept solutions that are good enough.

Meaning of satisfice I know you tak tau.. it meansdecide on and pursue a course of action satisfying

the minimum requirements to achieve a goal.

How to pronounce. altered from satisfy.

3. INTITI$" !"%I&ION 'A(IN)

- +aking decisions based on experience% feelings and accumulated #udgement

What is intuition* p+ease see the diagram o, e-hiit 3/0 o, our te-t ook*

,. -xperienced based decisions managers make decisions based on their experience

Affect initiated decisions managers make decisions based on feelings or emotions/. 0ognitive based decisions managers make decisions based on skills% knowledge

1. 2ubconscious mental processing3 use data from subconscious mind4. 5alues or -thics based decision make decisions based on ethical values or cultures.

ROBL"'& %AN B" !I$I!"! INTO 2 %AT")ORI"& :

1. &tructured ro+ems

- $roblems which are straight forward

- he goal of the decision maker is clear

- he problem and information about the problem easil" defined and complete.

2. nstructured ro+ems I++ structured pro+ems 4poor+ structured5- 6ew problems in which information is ambiguous or incomplete.

- he" are new or unusual problems

!"%I&ION& %AN B" !I$I!"! INTO 2 !"%I&ION& :

1. RO)RA''"! !"%I&ION&

A repetitive decision that can be handled b" a routine approach

he most effective wa" to handle structured problems

7elativel" simple and rel" heavil" on previous solutions.

+anagers simpl" do what the" and others have done previousl" in the same situation.


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2. NRO)RA''"! !"%I&ION&

(ecisions that must be custom3made to solve unique and nonrecurring problems

-xample deciding to acquire another organizations or which global market offers the most

potential. 2uch problems as mentioned in the example are uni6ue and nonrecurring pro+ems

his decision is different from previous organizational decisions because the issue is new.

rogrammed !ecision/'aking Aids4 apa ang o+eh memantu anda da+am memuat keputusan 75

1. RO%"!R"

- 2eries of interrelated sequential of steps that a manager can use when responding to a well3

structured problems.

- he difficult" is identif"ing the problem% once problem has been identified then so is the

procedure.

2. RL"&

- 2tatement that tells managers what the" ought or ought not to do &limits on procedural actions.

3. OLI%#

- A general guide that establishes parameters for making decisions about recurring problems.

- -xample

"-hiits ,or a++ the sutopics discussed :

-xplanation on the diagram!


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he four organizational levels are ! top% middle% and first3line managers and operative emplo"ees.

At 8hich o, these +e9e+s shou+d decisions e made7

- Recurring or routine decisionsprogrammed decisions! made b" lower levels of

management.

- +iddle3level managers make coordinating decisions with short3term implications and first3line

managers make localized decisions about what needs to be done.- Nonrecurring or uni6ue decisions nonprogrammed decisions! +ade b" top management.

8perative emplo"ees make #ob3related decisions to determine how a #ob should be done.

- (ecisions are seldom full" programmed or full" non programmed. *ew programmed decisions

can eliminate individual #udgment completel"9 unusual decision3making situations can be helped

b" considering programmed routines.

- If possible% management decisions should be programmed.

- At the top of the organization% the programmed approach is not realistic. +ost problems that top

management confronted are nonrecurring.

- here are strong economic incentives for top management to create policies% standard operating

procedures% and rules to cut costs b" minimizing the need for managers to exercise discretion

guide other managers%

- he more nonprogrammed the decision% the greater the #udgment required to make it.

DECISION MAKING STYLES

1. !irecti9e st+e

- A person has this st"le if the" have a low tolerance for ambiguit" and are efficient% rational% and

logical in their wa" of thinking.

- he" focus on the short term and are quick to make decisions% usuall" resulting in a decision that

has been made with minimal information and not carefull" anal"sing other alternatives.

- (islike ambiguit" and prefer rationalit".

2. Ana+tic st+e

- A person with an anal"tic decision3making st"le has greater tolerance to ambiguit".


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- he" are careful decision makers that like to be well informed and thoroughl" assess their

options.

- he" usuall" have the abilit" to adapt or cope with unique and challenging situations

- hose using the analytic styleconfront ambiguit" b" demanding more alternatives.

- $refer full information before making a decision.

3. %onceptua+ &t+e

- :enerall" ver" broad in their approach and consider all available alternatives.- he" are long3term oriented and are usuall" capable of formulating creative solutions to

problems.

- Individuals who tend to be ver" broad in outlook% to look at man" alternatives% and to focus on the

long run and often look for creative solutions.

;. Beha9iora+ st+es

- Work well with others% are open to suggestions% and are concerned about the achievements of

their team.

- he" generall" tr" to avoid conflict and place importance on their acceptance b" others.

- Work well with others and are receptive to suggestions.& willing to consider new ideas'


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Threats

- 6egative external environmental factors

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