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 MANAGING IN
INTRODUCTION TODAY’S PLANNING ORGANIZING LEADING

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WORKPLACE

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3. Global
Management

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4. Valuing a 14.
Diverse Interpersonal

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Workforce 11. and
8. Planning and Organizational
1. Managers and
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5. Socially- Organization
Goal-Setting Communicatio
You in the Conscious Design
9. Strategic n
Workplace Management 12. Organizing
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Planning 15.
Management 6. Managing Around Teams
10. Fostering Organizational
History Module Change 13. Human Behavior
Entrepreneursh
Resource
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2. Decision Making 7. Constraints ip 16. Leadership
on Managers Management
17. Motivation

18. Controlling Activities and Operations

CONTROLLING Planning and Control Techniques Module
Managing Operations Module
 Decision
• A choice from two or more alternatives.

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• The choice made among available alternatives that is expected to
lead to a favorable solution to a problem.

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 Step 1 - Identify a Problem
• Problem exists when there is a gap between a desired state

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and an existing state.

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• To make decisions about problems, managers must:

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o be aware of the gap
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o be motivated to reduce the gap
o have the knowledge, skills, abilities, authority, information and
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resources to fix the problem
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“My salespeople
Problem need new computers”
 Step 2 - Identifying Decision Criteria
• Decision Criteria - what’s relevant in making a decision.

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• Standards used to guide judgments and decisions.

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• The more criteria a potential solution meets, the better that

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solution should be.
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To buy a computer the criteria could be.
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1. Memory and storage
2. Battery life
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3. Carrying weight
4. Warranty
5. Display quality
Step 3 - Allocating Weights to the Criteria

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The decision maker must weight the items in order to give them the
correct priority in the decision.

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1. Memory and storage 10
2.
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Battery life 8
3. Carrying weight 6
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4. Warranty 4
5. Display quality 3
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 Step 4 - Developing Alternatives
The fourth step in the decision-making process requires the decision

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maker to list viable alternatives that could resolve the problem.

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a. HP ProBook

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b. Sony VAIO

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c. Lenovo IdeaPad
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d. Apple MacBook
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e. Toshiba Satellite
f. Sony NW
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g. Dell Inspiron
h. HP Pavilion
Step 5 - Evaluation of Alternatives

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Step 5 - Evaluation of Alternatives

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 Step 6 - Selecting an Alternative

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The sixth step in the decision-making process is choosing the best
alternative or the one that generated the highest total in evaluation of

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alternatives.

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In our example we would choose the Dell Inspiron because it scored
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higher than all other alternatives (249 total).
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 Step 7 - Implementing the Alternative

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• Put the decision into action by conveying it to those affected and
getting their commitment to it.

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• Reassess the environment for any changes, especially if it’s a long-

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term decision.

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• Are the criteria, alternatives, and choices still the best ones, or has
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the environment changed in such a way that we need to
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reevaluate?
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Step 8 - Evaluating Decision Effectiveness
• The last step in the decision-making process involves evaluating the

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outcome or result of the decision to see whether the problem was

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resolved.

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• If the evaluation shows that the problem still exists, then the

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manager needs to assess what went wrong.
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a. Was the problem incorrectly defined?
b. Were errors made when evaluating alternatives?
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c. Was the right alternative selected but poorly implemented?
 Identify a
"My sales reps need new computers!"
Problem

• Memory and storage

Identifying • Display quality
Decision • Battery life
Decision Making Process
• Warranty
Criteria
• Carrying weight

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Memory and storage……………….………….10
Allocation of Battery life…………………………………………….8

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weights to Carrying weight…………………………………….6
Warranty…………………………….…..……………4
the Criteria

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Display quality………………………………………3

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Developing Lenovo IdeaPad Apple Macbook
Alternatives Toshiba Satellite Sony NW
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Dell Inspiron HP Pavilion

HP ProBook Sony VAIO

Analyzing Lenovo IdeaPad Apple Macbook
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Toshiba Satellite Sony NW
Alternatives
Dell Inspiron HP Pavilion

HP ProBook Sony VAIO

Selecting an Lenovo IdeaPad Apple Macbook
Alternative Toshiba Satellite Sony NW
 Dell Inspiron HP Pavilion
Implementing
the Alternative Dell Inspiron
Decisions in the Management Functions

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 Approaches to Decision Making
1. Rational decision making: Describes choices that are logical

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and consistent and maximize value.

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Assumptions Of Rationality

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 A rational decision maker would be fully objective and logical.

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The problem faced would be clear and unambiguous
 Decision maker would have a clear and specific goal
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 Decision maker should now all possible alternatives and
consequences.
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 Finally, making decisions rationally would consistently lead to
selecting the alternative that maximizes the likelihood of achieving
that goal.
 Approaches to Decision Making
2. Bounded Rationality: Decision making that’s rational, but

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limited (bounded) by an individual’s ability to process

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information.

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Satisfice: Accept solutions that are “good enough”.

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Escalation of commitment: An increased commitment to a
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previous decision despite evidence it may have been wrong.
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3. Intuitive Decision Making: Making decisions on the basis of

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experience, feelings, and accumulated judgment.
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Difference b/w Decision Making Approaches

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Decision Making Styles

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 Types of Decisions

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• Programmed Decisions involves simple, common, and frequently
occurring problems for which solutions have already been

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determined. Examples of programmed decisions include reordering
office supplies, renewing a lease, and referring to an established

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discount for bulk orders.
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• Non-programmed Decisions involves a complex and unique
problem or opportunity with important consequences for the
organization. Examples of non-programmed decisions include
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entering a new market, deleting a product from the line, or
developing a new product.
 Structured Problems And
Programmed Decisions
Structured Problems: Straightforward, familiar, and easily defined

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problems.

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Programmed Decision: A repetitive decision that can be handled by a

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routine approach.

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A procedure is a series of sequential steps a manager uses to respond
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to a structured problem.
A rule is an explicit statement that tells a manager what can or cannot
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be done.
Policy is a guideline for making a decision.
 Unstructured Problems And
Non-programmed Decisions

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Unstructured Problems: Problems that are new or unusual and for
which information is ambiguous or incomplete.

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Non-programmed Decisions: Unique and nonrecurring decisions that
require a custom-made solution
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Programmed vs Non-programmed
Decisions

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 Decision-Making Conditions
When making decisions, managers may face three different conditions:

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certainty, risk, and uncertainty.

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Certainty: A situation in which a manager can make accurate decisions

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because all outcomes are known.

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Risk: A situation in which the decision maker is able to estimate the
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likelihood of certain outcomes.
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Uncertainty: A situation in which a decision maker has neither
certainty nor reasonable probability estimates available.
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Common Decision Making Biases
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