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Chapter6DECISIONMAKING:THEESSENCEOFTHEMANAGER’SJOB©JianjunZhang6-1LearningObjectivesYoushouldlearnto:–Outlinethestepsinthedecision-makingprocess–Explainwhydecisionmakingissopervasiveinorganizations–Describetherationaldecisionmaker–Contrasttheperfectlyrationalandboundedlyrationalapproachestodecisionmaking–Explaintherolethatintuitionplaysinthedecision-makingprocess©JianjunZhang6-2LearningObjectives(cont.)Youshouldlearnto:–Identifythetwotypesofdecisionproblemsandthetwotypesofdecisionsthatareusedtosolvethem–Differentiatethedecisionconditionsofcertainty,risk,anduncertainty–Describethedifferentdecision-makingstyles©JianjunZhang6-3©JianjunZhangImportanceofdecision-makingDecisions–choicesfromtwoormorealternatives–allorganizationalmembersmakedecisions–Everybodyhastomakelotofdecisionsinhis/herlifetime©JianjunZhangDecisionsintheManagementFunctions©JianjunZhangTheDecision-MakingProcessProblemIdentificationIdentificationofDecisionCriteriaAllocationofWeightstoCriteriaDevelopmentofAlternativesImplementationofanAlternativeEvaluationofDecisionEffectivenessAnalysisofAlternativesSelectionofanAlternative©JianjunZhangDecision-MakingProcess–acomprehensive,8-stepprocess–Step1-IdentifyingaProblem•problem-discrepancybetweenanexistingandadesiredstateofaffairs–mustbesuchthatitexertspressuretoact–managerisunlikelytocharacterizeasituationasaproblemunlesss/hehasresourcesnecessarytoactDecisionMaking©JianjunZhangDecision-MakingProcess(cont.)–Step2-IdentifyingDecisionCriteria•decisioncriteria-what’srelevantinmakingadecision–Step3-AllocatingWeightstotheCriteria•mustweightthecriteriatogivethemappropriatepriorityinthedecision–Step4-DevelopingAlternatives•listtheviablealternativesthatcouldresolvetheproblemwithoutevaluatingthem–Step5-AnalyzingAlternatives•eachalternativeisevaluatedagainstthecriteriaDecisionMaking(cont.)©JianjunZhangAssessedValuesofNotebookComputerAlternativesAgainstDecisionCriteria©JianjunZhangEvaluationofLaptopComputerAlternativesAgainstCriteriaandWeights©JianjunZhangDecisionMaking(cont.)Decision-MakingProcess(cont.)–Step6-SelectinganAlternative•choosingthebestalternativefromamongthoseconsidered–Step7-ImplementingtheAlternative•implementation-conveyingthedecisiontothoseaffectedbyitandgettingtheircommitmenttoit–participationindecision-makingprocessinclinespeopletosupportthedecision–decisionmayfailifitisnotimplementedproperly–Step8-EvaluatingDecisionEffectiveness•determinewhethertheproblemisresolved©JianjunZhangDecisionasaProcess:IncrementalDecisionProcessModelEmpiricalresearch:25decisionprocessesDecisionsequenceStimulus:opportunity,problem,crisisSolutions:given(ready-made),customizedIdentification:recognition,diagnosisDevelopment:search,screen,designSelection:judgmentevaluation-choice,analysisevaluation,bargainingevaluation-choiceAuthorizationContinuedDynamicfactors:--interrupts:suddeneventscausechangeinpaceordirection--schedulingdelays--feedbackdelays--timingdelaysandspeedups--comprehensivecycles--failurerecyclescontinuedModelsofstrategicdecisionprocess--simpleimpassedecisionprocesses--politicaldesigndecisionprocess--basicsearchdecisionprocesses--modifiedsearchdecisionprocesses--basicdesigndecisionprocesses--blockeddesigndecisionprocesses--dynamicdesigndecisionprocessesTheManagerAsDecisionMakerRationalDecisionMaking–decisionsareconsistent,value-maximizingchoiceswithinspecifiedconstraints–managersassumedtomakerationaldecisions–AssumptionsofRationality-decisionmakerwould:–beobjectiveandlogical–carefullydefineaproblem–haveaclearandspecificgoal–selectthealternativethatmaximizesthelikelihoodofachievingthegoal–makedecisioninthefirm’sbesteconomicinterests•managerialdecisionmakingseldommeetsallthetests©JianjunZhangAssumptionsOfRationalityRationalDecisionMakingProblemisclearandunambiguousSingle,well-definedgoalistobeachievedAllalternativesandconsequencesareknownPreferencesareclearPreferencesareconstantandstableNotimeorcostconstraintsexistFinalchoicewillmaximizepayoff©JianjunZhang有限理性环境复杂，模糊、不一致信息；不完备、不对称信息人们解释不同(经历经验、身份角色、利益，等）私有利益（组织作为政治联合体）时间压力注意力分配©JianjunZhangTheManagerAsADecisionMaker(cont.)TypesofProblemsandDecisions–Well-StructuredProblems-straightforward,familiar,andeasilydefined–ProgrammedDecisions-usedtoaddressstructuredproblems–minimizetheneedformanagerstousediscretion–facilitateorganizationalefficiency•procedure-seriesofinterrelatedsequentialstepsusedtorespondtoastructuredproblem•rule-explicitstatementofwhattodoornottodo•policy-guidelinesorparametersfordecisionmaking©JianjunZhang©JianjunZhangTheManagerAsADecisionMaker(cont.)TypesofProblemsandDecisions(cont.)–Poorly-StructuredProblems-new,unusualproblemsforwhichinformationisambiguousorincomplete–NonprogrammedDecisions-usedtoaddresspoorly-structuredproblems•produceacustom-maderesponse•morefrequentamonghigher-levelmanagers–fewdecisionsintherealworldareeitherfullyprogrammedornonprogrammed©JianjunZhang©JianjunZhangProgrammedversusnonprogrammeddecisionVariableTypeofDecisionProgrammedNonprogrammedTypeoftaskSimple,routineComplex,creativeRelianceonorganizationalpoliciesConsiderableg