Griffin 9e Basic Ch09

8/8/2019 Griffin 9e Basic Ch09

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Slide content created by Charlie Cook, The University of West Alabama

Copyright Houghton Mifflin Company. All rights reserved.

Chapter Nine

Managing DecisionMaking and Problem

Solving


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Copyright Houghton Mifflin Company. All rights reserved. 92

Learning Objectives

After studying this chapter, you should be able to:

1. Define decision making and discuss types ofdecisions and decision-making conditions.

2. Discuss rational perspectives on decision making,including the steps in rational decision making.

3. Describe the behavioral aspects of decision making.

4. Discuss group and team decision making, including

the advantages and disadvantages of group andteam decision making and how it can be moreeffectively managed.


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The Nature of Decision Making

Decision Making The act of choosing one alternative from among a

set of alternatives.

Decision-Making Process Recognizing and defining the nature of a decisionsituation, identifying alternatives, choosing thebest alternative, and putting it into practice.

An effective decision optimizes some set of factors such

as profits, sales, employee welfare, and market share. Managers make decisions about both problems and

opportunities.


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Types of Decisions

Programmed Decisions A decision that is a fairly structured

decision or recurs with somefrequency or both.

Example: Starting your car in themorning.

Nonprogrammed Decisions A decision that is relatively

unstructured and occurs much lessoften a programmed decision. Example: Choosing a vacation

destination.


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Decision-Making Conditions

Decision Making UnderCertainty The decision maker knows with reasonable

certainty what the alternatives are and whatconditions are associated with each alternative.

Decision Making Under Risk The availability of each alternative and its potential

payoffs and costs are all associated with risks.

Decision Making Under Uncertainty The decision maker does not know all the

alternatives, the risks associated with each, or theconsequences of each alternative.


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Figure 9.1: Decision-Making

Conditions


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Figure 9.2: The Classical Model

of Decision Making


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Table 9.1:Steps in

the

RationalDecision-

making

Process


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Figure 9.3: Evaluating

Alternatives in the Decision-

making Process


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Figure 9.4: The Administrative

Model of Decision Making


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Behavioral Aspects of

Decision Making (contd) Bounded Rationality

Decision makers are limited by their values andunconscious reflexes, skills, and habits.

Satisficing The tendency to search for alternatives only untilone is found that meets some minimum standardof sufficiency to resolve the problem.

Coalition A positive or negative political force in decision

making which consists of an informal alliance ofindividuals or groups formed to achieve a goal.


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Group and Team Decision

Making in Organizations Forms of Group Decision Making

Interacting group or team Consists of an existing group or newly formed team

interacting and then making a decision.

Delphi groups Developing a consensus of expert opinion from a panel

of experts who individually contribute through amoderator.

Nominal groups

Generating ideas through the individual contributions ofalternatives that are winnowed down to reach a decision.


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Table 9.2: Advantages and

Disadvantages ofGroup and

Team Decision Making


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Managing Group and Team

Decision-Making Processes Managers can promote the effectiveness of group

and team decision making by:

Being aware of the pros and cons of having a group or teammake a decision.

Setting deadlines for when decisions must be made. Avoiding dominance problems by managing group

membership.

Having each group member individually critically evaluate allalternatives.

Not making your position known too early. Appointing a group member to be a devils advocate.

Holding a follow-up meeting to recheck the decision.


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Key Terms

decision-making

decision-makingprocess

programmed decision

nonprogrammeddecision

state of certainty

stage of risk

state of uncertainty classical decision model

steps in rationaldecision making

administrative model

bounded rationality

satisficing

coalition

intuition

escalation ofcommitment

risk propensity

interacting groups

Delphi group nominal group

groupthink

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Griffin 9e Basic Ch09