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What is the first step in the decision-making process facing amanda

Chapter 2 Solution MakingIt's Your CareerSource:Szydy and Kysa/Shutterstock Problem Solution-Not ProblemA Key to Success In Every Day You Run Into Problems for Solution-Management and in Your Class Job Should I Focus on First?Career Knowing How I'll Eat for Dinner? What thebe effective
problem is a quick way for me to get to work (or school) solver. Today, as I'm running behind schedule? And when you're done with school and worked for the organization, you'll expect to show that you're a good problem solver. And having good problem solving skills is important if you are going to be
successful in your career. What can you do to develop and improve your problem solving skills? Let's look at some suggestions. Identify the problem. This may seem self-evident, but you'll be surprised at how many people try to jump in with a quick and easy solution without wasting time to first
understand and then identify the problem. When you do, you can come up with a solution . . . to the wrong problem! Instead, take some time to ask questions. Lots of questions! But don't get caught up in determining the problem that you ignore the solution to the problem. Another precaution when
identifying a problem is how we describe the chapter, making sure you don't confuse the problem with the symptoms of the problems. For example, you are supposed to have applied for several assignments but have not been invited to an interview. The problem is not the lack of interview invites . . . it's
just a symptom of the problem. There's a reason you're not asked about the interview. Before you can solve this situation, you need to identify the problem. So ask questions. Is that your CV? Is that your cover letter? Are you applying for a job you're not applying for? 2. Look at the problem from different
perspectives and generate multiple solutions. Good problem solving (and good decision maker)Pearson MyLab management® improve your class! When you see this icon, visit www.mymanagementlab.com for actions that are applied, personalized, and offer immediate feedback. The goals of SKILL
OUTCOMES2.1 describe the eight stages of the decision-making process. Develop your creativity.2.2 Explain the four ways managers make decisions.2.3 Classifying decisions and decision-making conditions.2.4 Describe how biases affect decision-making. Now how to recognize when you use errors
and biases in your decision-making and what to do about it.2.5 Identify effective decision-making methods. On the implementation of the solution. The problem is possible when coming up with solutions to not get solved without implementing yourproblem. Solution. Think about how to make your decision.
If you don't follow Step well, 3. Evaluate ideas or possible solutions. the problem will probably still be there or even get worse. Carefully and carefully assess your ideas, how they will affect the problem. But it's five. Re-examine your decision. Has the problemalso critically look at the time constraints and
have been resolved or at least better? If not, the money. Can your decisions lead to success you will have to determine if it is still rightresults in timing and budget decision or what additional actions can you face? Need. Decision-making is at the heart of governance. This is what managers do (or try to
avoid). And all managers would like to make the right decisions, because they are judged by the results of these decisions. In this chapter, we look at the concept of decision-making and how managers make decisions. In 2016, actor Will Smith, director Spike Lee and others have publicly announced they
will boycott the Oscars ceremony. Their protest followed the announcement of Oscar nominations that did not include any African 8182 Part 1 Introduction to the Office of American Filmmakers or Actors. Such a protest would tarnish the AA's reputation of choice among two or more award sponsors, the
Academy of Motion Picture Arts and Sciences. Management promptly analysed the root cause of the nomination process, which they considered to be a homogeneous membership base consisting mainly of older white men. In response, the Academy's board decided to change the racial composition of
the Obstacle, which makes it difficult for the academy to radically change the Academy's membership rules - something that has not been done in the organization's 90-year history. While most decisions made by leaders do not require radical change, you can see that decisions - choices, judgments -
play an important role in what an organization should do or is capable of doing. Decisions are made by leaders at all levels and in all areas of the organization' activities. I mean, they make a choice. For example, top managers make decisions about their orga-nization goals, where to place production
facilities, or which new markets to move to. Middle- and lower-level managers make decisions about production schedules, product quality issues, pay increases and employee discipline. Our focus in this guy-ter is about how managers make decisions, but making decisions is not what only managers do.
All members of the organization make decisions that affect their work and the organization they work for. While decision-making is usually described as a choice among alternatives, there is more to it than that! Why? Because decision-making is (and should be) a process, not just an act of choice among
Even for something as simple as deciding where to go for lunch, you do more than just choose burgers or pizza or hot dogs. Sure, you can't spend a lot of time contem-covering your dinner decision, but you still go through the process when making that decision. Exhibition 2-1 shows eight stages in the
decision-making process. This pro-cess is as relevant to personal decisions as it is for corporate solutions. Let's look at an example - a manager deciding which laptops to purchase to illustrate the steps in the process. Step 1: Identify a problem that your team isn't working with, your customers leave, or
your plans are no longer relevant.2 Each solution starts with a problem, a discrepancy between an existing and a desirable condition.3 Let's work on an example. Amanda is a sales manager whose representatives need new laptops because their old ones are outdated and not enough to do their job. To
make it simple, suppose it's not economical to add memory to old com-travelers, and it's the company's policy to buy rather than rent. Now we have a problem - the discrepancy between the current computers of sales representatives (existing state) and their need to have a more efficient (desirable state).
Amanda has to make a decision. How do managers identify problems? In the real world, most problems don't come with neon signs flashing the problem. When her representatives started complaining about their computers, it was pretty clear to Amanda that something had to be done, but few problems,
which is obvious. Managers should also be careful not to confuse the problem with the symptoms of the problem. Is a 5 percent drop in sales a problem? Or is the decline in sales just a symptom of a real problem such as substandard prod-ucts, high prices, bad publicity, or a change in consumer
preferences?4 For example, McDonald's has fallen on hard times in recent years as its sales have declined significantly.5 Also, keep in mind that the issue of identification is subjective. One possibility of reducing McDonald's sales is the different preferences of the younger generation compared to older
generations who grew up by eating McDonald's burgers and french fries. One manager may consider it a problem and the other manager can't. Also, a manager who solves the wrong problem perfectly is likely to work just as badly as a manager who doesn't even recognize the problem and does nothing.
For example, what if McDonald's management-ment were the attribute of sales dropping solely to its advertising campaign rather than changing consumer preferences? As you can see, effectively identifying prob-lems is important, but not easy.6Chapter 2 Decision-making 83 Definition My Sales
Representatives In new computers! Exhibition 2-1 Problem Decision Decision Definition - Memory and Storage Decision - Display Display Criteria - Battery life - Guarantee - Weight transfer that highlights memory and storage............... 10 Libra to battery life............ 8 Criteria Carrying weight..................... 6
Guarantee............ 4 Development of display quality............... 3 Alternatives to HP ProBook Toshiba Satellite Alternatives Sony VAIO Apple MacBook Air Lenovo IdeaPad Dell Inspiron Choice Apple MacBook HP Pavilion HP Pavilion HP Toshiba Satellite Sony VAIO Apple MacBook Air Alternative Lenovo
IdeaPad Dell Inspiron Implementation of Apple MacBook HP Pavilion Alternative ProBook Toshiba Toshiba Satellite Sony VAO The manager has identified the problem, he or she must determine the decision criteria relevant to the problem, important or relevant to the solution of the problem. Every
decision-maker has criteria for his or her decisions, even if they are not explicitly stated. In our example, Amandadecides after careful consideration of what memory and storage capabilities, display quality, battery life, warranty, and carrying weight are relevant criteria in their decision. Sometimes the
decision-making criteria change. For example, given the demographics, interests and preferences of consumers, were the most important criteria in the adoption of advertising solutions. Nowadays, many companies realize that these criteria in making ad-ing choices are not sufficient because consumers
are more multifaceted.7 We work, read books for fun, take a vacation, enjoy eating out, and so on. Understanding consumer thepsychology at different times is more effective than relying solely on demographics and interests.8 Mobile technologies allow consumers to easily influence companies and when
consumers need it most. For example, restaurants that want to attract travelers and locals looking for new food experiences subscribe with mobile apps such as RoundMenu. Based in the United Arab Emirates, RoundMenu understands that consumers typically rely on apps for everyday needs, such as
restaurant financing. Thus, the RoundMenu app simplifies for users browser lists and menus, reserve a table, or order meals for home delivery.984 Part 1 Introduction to Memory Management and Storage 10 Battery Life 8Exhibit 2-2 Carrying weight 6 Guarantee 4 Important decision-making criteria
Displaying quality 3 Eight-step decision-making process Step 3: Distribution of weights for Criteriabegins with assessment of the problem and ends with the outcome of the decision. If the relevant criteria Equally important, the solutionputers identifying the need to purchase a new laptop manufacturer
should weight the items in order to give them the right computers for their sales representatives, the manager's priority in deciding. As? An easy way is to give mostmust to determine the relevant criteria such as price, an important weight criterion of 10, and then assign weights todisplay quality, and
memory that will help others using this standard. Of course, you could use any num-guide to her final decision. bere as the highest weight. Weighted average criteria for our exampleSource:Alex Segre/Alamy Stock Photo is shown at 2-2. Step 4: Developing alternatives to the fourth step in decision-
making requires that the decision-maker list viable alternatives that could solve the problem. At this stage, the decision maker must be creative, and the alternatives are only listed, and not evaluated just yet. Our sales manager, Amanda, identifies seven laptops as a possible choice. (See Exhibit 2-3.)
Step 5: Analysis of alternatives Once alternatives have been identified, the decision maker must evaluate each of them. As? Using criteria set in step 2. Exhibit 2-3 shows the estimated values that Amanda gave each alternative after doing some research on them. Keep in mind that this data is an
assessment of eight alternatives using decision-making criteria, but not weighting. By multiplying each alternative by a given weight, you get weighted alternatives, as shown in the 2-4 exhibition. The overall score for each alternative, then, is the sum of his weighted criteria. Sometimes the decision-maker
may miss this step. If one alternative scores high on each criterion, you won't need to consider weights because this alternative will already be the best choice. Or, if the scales were equal, you can evaluate the alternative just by summing up the estimated values for each of them. (Look again at the show
2-3.) Например, оценка hp ProBook будет 36, и оценка для Apple MacBook Air будет 35.Экспонат 2-3 Памяти и батареи, несущих гарантийный дисплей хранения жизни Вес 8 Качественные Альтернативы HP ProBook 10 3 10 Lenovo IdeaPad 8 5 10 8 5 Apple MacBook 8 7 7 8 10 Toshiba
Спутник 7 8 7 10 Apple MacBook Air 8 3 7 6 7 Dell Inspiron 10 7 6 8 7 HP Павильон 4 10 8 8 4 7 10Chapter 2 Принятие решений 85 Памяти и аккумулятора Проведение Гарантийный дисплей Общий экспонат 2-4 Срок службы хранения Вес 32 Качество 231HP ProBook 100 24 40 232 Оценка
АльтернативыЛеново IdeaPad 80 40 60 32 15 231Apple MacBook 80 56 42 32 30 229Toshiba Спутник 70 64 42 40 21 204Apple MacBook Air 80 24 42 24 21 249Dell Inspiron 100 56 36 32 24 206HP Павильон 40 80 48 21 24 30Степ 6 : Choose The sixth step in the decision-making process is
choosing the best alternative or one that generated the highest total in step 5. In our our (Exhibit 2-4), Amandawould choose Dell Inspiron because it scored higher than all other alternatives (249 total). Step 7: Implementing AlternativeIn Step 7 in the decision-making process, you put the decision into
action, bring it to the victims and get their commitment to it. We know that if people who have to implement the decision are involved in the process, they are more likely to sup-port it than if you just tell them what to do. Another thing managers may need doduring implementation is to re-evaluate the
environment for any changes, especially if it is a long-term solution. Are the criteria, alternatives and choices still the best of them, the orhas environment has changed in a way that we need to rethink? For example, businesses that offer goods and services with an online component must ensure the
security of private users' data, such as passwords and payment details. However, even companies that have taken steps to protect customer data are rethinking their criteria and changing their criteria due to the surge in cybercrime. An example would be VTech Holdings, a Hong Kong-based company
that manufactures technology-enabled toys. After VTech's children's website was hacked, the company was criticized for failing to confirm the breach and notify parents of password changes. Following the investigation, VTech executives hired a cybersecurity consulting firm to strengthen online security.
Later, they restarted the website with updated terms of use of disclosure potential problems, saying that non-companies can offer a 100 percent guarantee that it will not be hacked.10Step 8: Evaluating decision-making effectiveness The last step in the decision-making process includes evaluating the
results or resulting the decision to see if the problem has been resolved. If the score shows that the problem still exists, then the manager should assess what went wrong. Has the problem been mis-defined? Were there any errors in evaluating alternatives? Was an alternative chosen, but was it poorly
implemented? For example, after the Deepwater Horizon oil spill in the Gulf of Mexico, CEO Tony Hayward (now a reformer) apologized to the public for being poorly conceived and executed. Responding to the spill, Hayward said: We regret the massive disruption this causedtheir life. No one wants this
thing to end more than I do. 11 Indeed, the right decision was made to apologize to the victims. But Hay-Ward's decision to include himself as a victim was poorly conceived. Answering questions posed as a result of the evaluation of the result may lead to a reworking of an earlier step or even require the
entire process to start. In this particular case, Hay-Ward did not have such a because he resigned after a public outcry.86 Part 1 Introduction to the Office of The Government of Decision-Making. Solutions. decision-making is the essence of LO2.2 While everyone in the organization decides, management
decision-making is especially important for managers. As exhibition 2-5 shows, it is part of all four management functions. That's why managers, when they plan, organize, lead and control, are called decision makers. The fact that almost everything a manager does is about making decisions doesn't
mean that decisions always take a lot of time, are complicated or obvious to an outside observer. Most decisions are routine. For example, every day of the year you decide what to eat for dinner. It's no big deal. You've done deci-zion thousands of times. This is a fairly simple solution and can usually be
processed quickly. This is the type of solution you have almost forgotten this solution. And managers also make dozens of these routine decisions every day; for example, which employee will work in what shift next week, what information should be included in the report, or how to resolve a customer's
complaint. Keep in mind that although the solution seems easy or has collided with the manager several times, it is still a decision. Let's look at four perspectives on how managers make decision.rational decision-making RationalityDescribes choices that are logical and insupulous and maximize value We
assume that managers will use rational decision-making; that is, they will make logical and consistent choices to maximize value.13 After all, managers have all sorts of tools and techniques to help them be rational decision makers. What does it mean to be a rational decision maker? ASSUMPTIONS
RATIONALITY A rational decision-maker would be completely obsessive and logical. The problem it faced would be clear and unambiguous, and the creator of the deci-sion would have a clear and concrete purpose and would know all possible alternatives and consequences. Finally, rational decision-
making will consistently lead to the choice of Exhibit 2-5 Planning What are the long-term goals of the organization? Solutions managers can make what strategies will best achieve these goals? What should be the organization's short-term goals? How complex should individual goals be? Organizing How
Many Employees Should I Have a Report Directly to Me? How much centralization should there be in the organization? How should jobs be designed? When should an organization introduce a different structure? How can I treat people who seem unmotivated? What is the most effective management
style in this situation? How will the specific change affect productivity? When is the time to stimulate conflict? Monitoring what activities in the organization need to be How should these actions be monitored? When is a significant performance deviation? What type of information management system
should be 2 Decision-making 87 alternative that maximizes the likelihood of achieving this goal. These asmping justifications apply to any decision, personal or managerial. However, to make management decisions that it is rational, but, we must add another assumption - decisions are made in the best
limited (limited) individual interest of the organization. These rationality assumptions are not very realistic and the ability to handle informationmanagers does not always work rationally, but the following concept may help explain how most satisficedecisions get made in organizations. To make decisions
that are reasonably well-connected to the escalating commitment to an increased commitment to the previous Receible unrealistic assumptions, managers are expected to be rational when Mack's decision, despite evidence that he can have decisions.14 They understand that good decision makers
should do the wrong thing and exercise good decision-making behavior as they identify problems, consider alternatives, gather information, act decisively, but decisively. When they have Netflix CEO Reed Hastings relying on what hedo is so, they show others that they are competent and that their
decisions are the result of calls of informed intuition in the development of a different debate. However, a more realistic approach to describing As the manag-original programming that plays majorers to make decisions is the concept of limited rationality, which says that managers have a role in the
company's international growth.make decisions rationally but are limited (limited) by their ability to handle infor-Although Netflix invests heavily in datamation.15 Because they can't analyze all the information on all alternatives, human analysts, Hastings says, that the intuition of asagers satisfice rather
than maximally. That is, they make decisions that are as good as data when making final decisions. They are rational within (borders) of their ability to handle Source: Tobias Hase/picture alliance/dpa/information. Let's look at an example. Newscom Suppose you are a finance major and after graduating
you want a job, but a personal financial planner with a minimum wage of $55,000 and within 100 miles of your hometown. You accept a job offer as a business loan analyst - not exactly personal financial planning, but still in finance-in-bank 50 miles from homeat's initial salary of $47,500. If you did a more
comprehensive job search, you would find a job in personal financial planning at a trust company just 25 miles from your hometown and starting with a salary of $55,000. haven't been a per-fectly rational decision maker because you don't maximize your decision by looking for all possible alternatives and
then choose the best. But because The first job offer was satisfactory (or good enough), you behaved in a limited-rational way if it did. Most of the decisions that managers make do not correspond to the assumptions of perfect rational ity, so they satisfice. However, keep in mind that their decision-making
is also likely influenced by the organization's culture, domestic politics, considerations of power, and a phenomenon called escalating commitment, an increased commitment toa the previous decision, despite evidence that it may have been a wrong.16 Challenger space shuttle disaster is often used as
an example of escalating commitments. The decision of the mak-ers chose to launch the shuttle that day even though the de-cision was questioned by several individuals who believed there was a bad one. Why should decision-makers re-commit to a bad decision? Because they don't want to admit that
their original decision may have been wrong. Instead of looking for new alternatives, they simply increase their com-mitment to the original solution. Intuition When managers in stapler-maker Swingline saw com-pany market share decline, they used logical scientificapproach to solve the problem. For
three years, they exhaus-tively researched stapler users before deciding which new products to develop. However, at Accentra, Inc., founder Todd Moses used a more intuitive approach to decision-making to line up his line of unique PaperPro.1788 Part 1 Introduction to Managers to Force Managers to
Make An Exhibition 2-6 Decisions Based on Solutions Based on What Is Intuition? their past experiences of feeling or emotion Experience-based ect-initiated managers to make decisions based on ethical values decisions or a culture of Cognitive-based Intuition-based Decisions of Values or Ethics-Based
Decisions Of The Subconscious Mental Processing Managers use data from managers to make subliminal decisions based on skills, knowledge and traininghelp their decision-makingSource:Based on L.A. Burke and M. Miller , October 1999, page 91-99.intuitive decision-making, as Todd Moses,
managers often use their intuition to help their decisions Mc Making decisions based on ING. What is intuitive decision-making? He makes decisions based on ex-experience, feelings, and accumulated rience, feelings, and accumulated judgments. Researchers studying managers' use of intuitive
solutions identified five different aspects of intuition described in 2-6.18 How common is intuitive decision-making? One survey found that almost half of the managers surveyed used intuition more often than analysis to run their companies. 19 Intuitive decision-making can complement both rational and
limited rational decision-making20 First of all, a manager who has experience a similar type of problem or situation can often act quickly with what appears to be limited infor-mation due to this past experience. In addition, a recent study found that indie-visuals who experienced strong feelings and
emotions when making decisions actually achieved higher decision-making efficiency, especially when they understood their feelings when they made decisions. The old belief that managers should ignore emotions when making decisions may not be the best advice.21Watch It 1! If your professor has
appointed this, go to www.mymanagementlab.com to watch a video called CH2MHill decision-making and answer questions. Evidence-based sales management partners at a cosmetics counter at the Department store Bon-Ton Stores, Inc. had the highest turnover of any store sales group. Using a data-
driven decision-making approach, managers developed a more accurate employment assessment test. Now, not only do they have a lower turnover, they actually have better hires.22 Suppose you exhibited some strange, mysterious physical symptoms. In order to make better decisions about proper
diagnosis and treatment, don't you want your doctor to base your decisions on the best available evidence? Now let's say you're a manager who's faced with employee recognition. Don't you want these decisions to be based on the best evidence available? Chapter 2 Decision-making 89REALlegte'st
Scenario: Source: Prudence Rufus Juan Hernandez is a successful business owner. His landscaping business is growing, and a few months ago he decided to bring someone to manage his office operations because he had little time to keep on top of that activity. However, this person cannot make a
decision without tormenting about it over and over and over and on. What can Juan do to help this person become the best decision-maker? Juan could give his office assistant a better idea of the challenges facing the day/week/month, as well as the timing for each. This will force him to make a decision
over a period of time and also give him a broader understanding of the workload. This will allow him to realize that there are still many tasks to accomplish. Prudence Rufus Business Owner/Photographer Any decision-making process is likely to be expanded by the use of relevant evidence management
and reliable evidence, whether it's buying someone a birthday gift or an interesting (EBMgt) that the new washing machine to buy. 23 This is a prerequisite based on evidence Systematic use of the best available management (EBMgt), the systematic use of the best available to improve the evidence to
improve management practices. 24 EBMgt practice is quite relevant for management decisions. The four main elements of EBMgt are (1) experience and judgment decision makers; (2) External external The decision-makers have been assessed. (3) the opinions, preferences and values of those
interested in making a decision; and (4) relevant organizational (internal) factors, such as context, circumstances and organizational members. The power or influence of each of these elements on the decision will change with each decision. In some cases, the intuition (judgment) of decision-makers may
be given more attention in decision-making; In other cases, it may be the views of stakeholders; and in other cases, it may be ethical considerations (organizational context). The key for leaders is to understand and understand the attentive, conscious choices of which elements are most important and
should be emphasized when making a decision. TIPS decisions and decision-making FYIconditions - The more trust employees have in their managers, the more restaurant managers in Portland make routine weekly decisions about the likelihood that employees will buy food and plan shifts. It's to expect
organizational results for something they've done many times. But now they face a different kind of to be favorable and moredecisive-one they've never encountered: how to adapt to the new law, demanding that they probably should expect thenutritional information to be posted. procedures used by the
authorities to plan and implement decisions will be fair.25 Such situations are not so unusual. Leaders across all kinds of organizations face challenges and solutions when they do their job. Depending on the nature of the problem, the manager can use one of two different types of solutions.90 Part 1
Introduction to management of structured problems STRUCTURED PROBLEMS AND PROGRAMMED DECISIONS Some problems Are familiar, and easily simple. The purpose of the decision-makers is clear, the problem is familiar, and certain information about the problem is easily determined and
completed. Examples can include when a customer returns a purchase to a store, when a vendor is late with a programmed important delivery solution, a news team response to a quick event, or a re-solution of a college that can be processed by a student wishing to opt out of the class. Such situations
are called structured problems of the usual approach, because they are simple, familiar and easily defined. For example, the server pours a drink on the client's coat. The client is upset and the manager needs to do something. Because this is not an unusual phenomenon, there is probably a series of
successive steps used for some standardized routine to handle it. For example, the manager suggests taking action towards a well-structured problem that the coat has cleaned at the expense of the restaurant. It's what we call a programmed solution, a repetitive solution, Approach. Because the problem
is structured, the manager doesn't have to go into trouble and costs in an explicit statement that tells managers that they are going through the decision-making process. The development-alternative phase, which may or may not be accomplished in the decision-making process, either does not exist or is
given little attention. Why? Because once a structured problem is identified, the solution is usually self-evident policy or at least comes down to a few alternatives that are familiar and have proven to be successfulA guidance for decision-making in the past. The spilled drink on the customer's coat does not
require the restaurant manager to determine and weight the criteria for making a decision or develop a long list of possible solutions. Instead, the manager relies on one of three types of pre-programmed deci-sion: procedure, rule, or policy. The procedure is a series of consistent steps that the manager
uses to respond to a struc-tured problem. The only difficulty is identifying the problem. Once that's clear, it's a procedure. For example, a purchasing manager receives a request from a warehouse manager for 15 tablets for inventory clerks. The purchasing manager knows how to make this decision by
following the established purchase procedure. A rule is a clear statement that says what is possible and what cannot be. Rules are often used because they are easy to use and ensure consistency. For example, rules on lateness and absenteeism allow managers to make disciplinary decisions quickly
and fairly. The third type of programmed decisions is policy, a guideline for decision-making. Unlike the rule, a policy sets general parameters for making decisions, rather than specifically about what should or should not be done. Typi-cally policies contain an ambiguous term, which leaves the
interpretation until a decision is made. Here are some examples of political statements: The client always comes first and should always be satisfied. We promote from within whenever possible. Workers' wages must be competitive within community standards. Please note that conditions are satisfied
when possible and competitively require interpreta-tion. For example, a competitive wage policy does not tell the company's human resources manager the exact amount he or she must pay, but it directs the manager to make a decision. This is your career decision-making, part 1-If your instructor uses
Pearson MyLab management, log on to mymanagementlab.com and test your decision-making knowledge. Don't forget to turn to the head of opener!unstructured problems UNSTRUCTURED PROBLEMS AND NONPROGRAMMED DECISIONS Not allProblems that are new or unusual and the problems
faced by managers be solved by programmed solutions. Many for whom information is ambiguous or organizationally related to unstructured unstructured new or unusual prob-incomplete lems for which the information is ambiguous or incomplete. After more than 50 years of separation between the
United States and Cuba, how the United StatesChapter 2 Decision-making 91Characteristic Programmed Solutions Unprogrammed Exhibit 2-7TypeType Problem Structured Solutions Mountain Level Lower Level Unstructured VersusFrequency Repetitive, the usual upper levels of Unprogrammed
SolutionsInformation Ready available new new, unusual Goals Clear, specific ambiguous or incomplete time to address ShortSolution. Procedures, rules, policies and creativity and creativitythe government builds economic ties with Cuba is an example of unstructured unprogrammed solutions. It's also a
challenge facing U.S. HR professionals who need unique and non-remembering solutions that do how to change their health insurance plans according to patient pro-requiring customization and the Affordable Care Act. When problems are unstructured, managers must be prepared for unprogrammable
decision-making to develop unique solutions. Unprogramried solutions are unique and unguarded and include customized solutions. Exhibition 2-7 describes the differences between programmed and unprogrammable solutions. Lower-level managers rely heavily on programmed solutions (procedures,
rules, and policies) because they encounter familiar and repetitive problems. As managers move up the organizational hierarchy, the challenges they face become more unstructured. Why? Because lower-level managers handle routine decisions and allow senior managers to deal with unusual or difficult
solutions. In addition, senior managers delegate routine solutions to their subordinates so that they can deal with more complex issues.26 Thus, several management decisions in the real world are either fully programmed or not programmed. Most fall somewhere in between. If your professor has
appointed this, go to www.mymanagementlab.com to complete Write It! Writing Appointment of MGMT 8: Decision-making.When decision-making, managers may face three different conditions: certainty, risk, and uncertainty. Let's look at the characteristics of each of them. CERTAINTY The ideal
situation for decision-making is one of certainty, a situation of certainty where the manager can make accurate decisions, because the result of each alterna-situation in which the manager cantive is known. For example, entrepreneurs and business managers in Sweden make accurate decisions because
allcertain they will receive quick payment for goods and services when they decide that the results are known to allow customers to shop through financial services applications such as i'ettle andtrustly. Predictably, the results of most management decisions have not been established.27RISK A much
more common situation is one of the conditions in which the risk-risker can estimate the probability of certain results. Under threat, managers have a situation in which decision-makers have data from past personal experience or secondary information that allows them to assess the likelihood of a
probability of different alternatives. Let's set an example. Certain results Suppose you run a Colorado ski resort and you are thinking of adding another lift. Obviously, your decision will be influenced by the additional revenue of Part 1 Introduction to Management that the new elevator will generate, which
depends on the snowfall. You have pretty reliant-able weather data for the last 10 years at snowfall levels in your area - three years of heavy snowfall, five years of normal snowfall, and two years of light snow. And you have good information about the amount of revenue generated at each level of snow.
You can use this information to help you make a decision by calculating the expected cost - the expected return on every possible outcome - by multiplying the expected revenue by the chance of snowfall. The result is an average income that you can expect over time if the probability data hold. As Exhibit
2-8 shows, the expected revenue from the addition of the new lift is $687,500. Of course, whether this is enough to justify the decision to build depends on the costs associated with obtaining this income. UNCERTAINTY CEO and staff of the Fukushima Daini nuclear power plant in Japan have faced a
crisis due to the damage caused by the earthquake and tsunami. There was a high probability of a catastrophic nuclear crisis and an explosion at the power plant. Many possible factors may need to find a way to maintain their crowdsoursing abilities to help organizations make decisions and solve
problems that will depend on what will be cool when transporting goods during summer management ability to use powermonths effectively or in warmer climatic conditions.28 To meet this bowl of crowds. A professor at Harvard Business School Karimlenge, Hershey addressed the crowd. Instead, watch-
Lakhani suggests that organizations need to find the right one to address in company, manage people and create appropriate incentives to motivate crowdsourcing innovation competitions to decide whether to contribute. Effective crowdsourcing should be a problem of supply chain management. Anyone
can draw a variety of opinions that are not independent of the onesubmit idea, and the winner of the contest gets $25,000 in another. Organizations should also have a mechanism for developing funds and being able to collaborate cumulative individual responses in collective opinion with Hershey to
develop the proposed in order to support the use of crowdsourcing in deci-sion solutions. Search Search problem solving is one of the most common use of crowdsourcing in organizations. Crowd-crowdsourcing can be a game-changer forsourcing can help managers collect ideas from cus-making
decisions in organizations if strategi-tommers are used, employees or other groups to help make deci-cally. We could see a shift from traditional models such as what products to develop, where they made decision-making led with the top of the hierarch-must-invest, or even who to promote. Works on chy
to more efficient solutions, driven by user collective experiences and ideas by many, crowdsors-ers, employees or others. This revolution in this process can help leaders make better decisions, the decision-making process can call into question the convening, receiving contributions from the front line and
beyond. management practice that requires new skills from managers. Crowdsourcing is not something new in the business world. One of the first examples of business using the crowd,If your professor decided to appoint this, to go tosourcing occurred in 1916, when Planters Peanuts held a
www.mymanagementlab.com to discuss a subsequent competition to create its logo. However, today the Internet ING questions.connectivity provides businesses with quick and easy ac-cess to information from customers and employees, ef-TALK ABOUT IT 1: How can crowdsourcing helpfectively
clicking on their cumulative wisdom. This manager making better decisions?connection, combined with new software applications that facilitate crowdsourcing, gives him the potential to talk ABOUT IT 2: What are some risks in usingsignificantly impact on the future of organizational deci-crowdsourcing
decisions?sion decisions. Chapter 2 Decision 93Wea the expected cost of the exhibition 2-8Heavy Snowfall Revenues × Probability - Every AlternativeNormal Snowfall Expected ValueLight Snowfall $255,000 $850,000 0.0 3 362,500 72 5000 0.5 70000 $687,500 350,000 0.2 led to these results, including
whether vital systems, damaged in quakecould to be repaired and whether the aftershocks will further destabilize the nuclear re-agents. What happens if you come across a solution where you are unsure of theoutcomes and can't even make a reasonable probability assessment? We call it uncertainty.
Managers face situations of uncertainty in decision-making. In the face of uncertainty, the choice of alternatives is influenced by the limited number of situations A in which the decision is made and the psychological orientation of the decision-makers. Has neither certainty nor reasonablenessIjoy manager
will follow the maximum choice (maximizing the maximum probability of ratings available to the positive winning); The pessimist will follow the maximum choice (maximizing the mini-mother of possible winnings); manager who wishes to minimize his maximum re-gret will choose minimax minimax Let's look
at these different approaches of choice, they can be used by example. SantadteASs4.) mTfoahrrekpemrtoianmrgkoemttiinangngatmgheearn VaaitsgaVerasarlsdhoathskrndooeutwgeshrmothuinat ettdhmefaoWjuoersptcooCsmosiapbseltirteott three competitive tahcitsioenxas m
(CpAle,1,wCeA'll2,aassnudmCeAth3) atitt'sheusVinisga to promote her map in the same region. shown at the exhibition 2-9 to show the different strategies and profits, depending on the competitive actions, used MasterCard. in this example, if our tVhiesalamrgaenstapgoerssisbaloapint:im$2is8t,
msihllei'ollnc. hNootseethstartatgisyc4ho (Sic4e) because it can produce the maximum possible gain (maximum choice). ThewSea3oc'rhst$s1tor5uatmtceoiglmyli.oeFnfo;olSrlo4ew-aicn$hg14stththraeitlmelgiaoyxnii.smTaihnsecfs ohelolaoircwee,st:hshSe
e1m'woos$tu1lp1demsmsiialmlxioiismnti;iczSeo2ut'htce$o9mmmiilmflrioounmm;payoff; in other words, it would have chosen the S3 ($15 million is the largest of the minimum payouts). In the third approach, managers recognize that after a decision is made, this will not necessarily result in the most
profitable payout. There may be a regret profit abandoned-regret citing the amount of money that could visa Marketing Strategy (in MasterCard Exhibition 2-9 million dollars) Competitive Action Payouts Matrix S1 CA1 CA2 CA3 S2 11 S3 13 14 S4 9 15 18 21 15 18 14 2894 Part 1 Introduction to
Management Visa Marketing Strategy (in MasterCard millions of dollars) Competitive ActionExhibit 2-10 S1Regret Matrix S2 S2 S4 CA1 CA2 CA3 11 7 17 15 10 0 0 13 67LEADER do was done, if another strategy was used by DIFFERENCE. Managers calculate regret by sub-tracting all possible
winnings in each cat- He's not your typical CEO. In fact, some may egory from the maximum possible win call it a little crazy, except that its for every given event, in this case for each track record on turning crazy ideas into profita-competitive actions. For our Visa manager, Ble Enterprises is very good.
We're talking about the highest win, given that Elon Musk's MasterCard.29 In 2002 he sold his second Inter- leinogna, g$e2s 1inmCilAlio1, nC, Aor2, $o 2r8CmAi3l-lioisn,$2re4spmeicl - pure startup, PayPal, eBay for $1.5 billion (his tively (highest number in each column). Cur- Subtracting wins in
exhibition 2-9Source:Kristoffer Tripblaar/Sipa USA (Sipa via AP for rent, Musk is the CEO of Space Exploration Technologies (SpaceX) and from these figures produces the results of Tesla Motors, and and solarCity's largest shareholder, shown at 2-10. energy technology company. SpaceX, which builds
rockets for com- Slmio4inz'e; TsS$ht27he'emmm$ial1alx5ixiomimnmu.iumlTlmiohrneree;gmgrSrei3etnts'i,mas$roa1exo3Sucm1rh'ioVlliiic$soe1an7mm; maiannniild--- shells and countries to put satellites in space, was the first private ager to choose Sre4.gBreyt to make this choice, the company to deliver
cargo to the International Space Station. This Reig-she will never have profit given up on niting interest in space exploration. Tesla Motors is the world's most out of more than $7 million. This result is con-prominent the maker of electric cars and proves that electric cars can trasts, for example, with the
regret of $15 mil-being green, sexy, and profitable. SolarCity is currently a leading supplier of tliaoknenAhaCltdhAos1hu. eghchmosaennaSge2 rasndtryMatosteqruCaanrtdifhyada domestic solar panels in the United States. Each of these businesses has a solution when possible through a winning and
transformed (or transformational) industry: PayPal-Internet pay-regret matrix, uncertainty often forces them to ments; Tesla - cars; SpaceX - Aeronautics; and SolarCity - rely more on intuition, creativity, guesswork, energy. As a decision maker, Musk deals with mostly unstructured and gut-feeling. risky
problems. However, like other business innovators, Musk is comfortable with that and in achieving what many can con-sider crazy idea territory. His genius was compared to the late Steve Jobs. And Fortune magazine named it the 2013 Busi-nessperson of the year. What can you learn from this leader
who will make a difference? Watch it 2! If your professor has appointed this, go to www.mymanagementlab.com to watch a video called Gavinia Gourmet Coffee: Organizational Behavior and Answer Questions. DECISION-MAKING biases and lo2.4 errors when managers make decisions, they can use
the rules of the thumb, or the rules of the thumb that managers use for Euristics to make it easier for them to make decisions. Thumb rules can make decision-making useful because they help to understand complex, uncertain and ambiguous infor-mation.30 Even if managers can use thumb rules, it
doesn't mean that these rules are reliable. Why? Because they can lead to errors and biases in the processing andChapter 2 Decision-making 95 Self-Confidence Exhibition 2-11 Common Solutions Biases Hindsight Immediate GratificationSelf-Service Anchor E ectSunk Decision-making Costs Selective
Perception Of Error And Biases Confirmation Representation Framing Availability. Exhibition 2-11 identifies 12 common mistakes of manag-ers solution and that they may have. Let's take a look at each.31 When decision makers tend to think they know more than they do, or hold non-realistically positive
views on themselves and their own they demonstrate a preconception of the charge. The immediate satisfaction of bias describes decision makers who would like immediate remuneration and avoid immediate costs. For these people, the choice of solutions that provide quick payouts are more attractive
than those with a win in the future. The anchor effect describes how decision-makers are fixated on the initial infor-mation as a starting point and then, after the set, are unable to adequately tune in to follow-up information. First impressions, ideas, prices and estimates carry unreasonable weight to the
information received later. When decision-makers selectively organize and rethink events based on their biased perception, they use selective perception. This affects the information they pay attention to, the problems they iden-tify, and the alternatives they develop. Decision makers who are looking for
information that confirms their past selection and discount information that contradicts past judgmentsexhibit confirmation bias. These people tend to take for a point of view information that confirms their preconceived views and are critical and skeptical of information that challenges these views. Framing
bias occurs when decision-makers choose to highlight some aspects of the situation, excluding others. By drawing attention to the specific aspects of the situation and emphasizing them, while downplaying or omitting other aspects, they distort what they see and create the wrong guidelines. Accessibility
bias occurs when decision makers tend to remember events that are the latest and brightest in their memory. The result? This distorts their ability to recall events objectively and leads to distorted judgments and test scores. When decision-makers assess the probability of an event based on how similar it
is to other events or sets of events, it is a preconception of view. Managers have shown this bias, draw analogies and see the same situations when they do not exist. Random bias describes the actions of decision makers who try to create meaning from random events. They do so because most decision
makers have difficulty with chance, even if random events happen to everyone, and there is nothing that can be done to predict them. The squenched cost error occurs when decision makers forget that the current choice cannot fix the past. They mis-fix-eat on past spending time, money or effort in
evaluating choices rather than onfuture consequences. Instead of ignoring the sunken costs, they can't forget them. Decision-makers who take credit for their successes and blame failure on external factors showing self-serving biases. Finally, the retroactive bias trend96 Part 1 Introduction to
ManagementFYI for decision makers falsely believe that they would have accurately predicted predicted events as soon as this result is actually known.When managers have reduced the effects of bias in their decisions managers avoid the negative consequences of these error-making and biases by
making their organizations aware of them and then not using them! Fortunately, some studies show that return train-performance ING can successfully attract employees to recognize specific decision biases 7 percent higher.32 and reduce subsequent bias decision-making with long-term effect.33 Aside
from this, managers should also pay attention to how they make decisions and try to identify the prouristics they normally use and critically assess the fission of these heuristics. Finally, managers can ask trustees to help them identify weaknesses in their decision-making style and try to improve those
shortcomings. For example, Christopher Cabrera, founder and CEO of Xactly, did just that. I had an experienced boss who was a great mentor and he really helped me with the job and understanding of how to build a variety of teams. The company grew rapidly and hiring was a big part of my job. 34It's
your career decision-making, part 2-If your instructor uses Pearson MyLab management, log into mymanagementlab.com and test your decision-making knowledge. Don't forget to go back to the head knife! The Review of Management Solutions Exhibition 2-12 provides an overview of management
decisions. Because it is in their best interest, managers want to make the right decisions, that is, choose a better alternative, implement it, and determine whether it cares about the problem that is the reason the decision was needed in the first place. The decision-making process is influenced by four
factors: decision-making, the type of problem, the decision-making environment, and certain errors and biases in decision-making. So whether deci-sion involves solving a habitual employee delay, solving a product quality problem, or determining whether to enter a new market, it has been shaped by a
number of factors. Exhibition 2-12 Decision-making Approach - Rationality of Errors and BiasesOverview Management Decision-Making - Limited Rationality - Intuition Types of Problem And Solution Solutions - Choosing the Best Alternative - Well Structured-Programmed Decision-Making Process -
Unstructured-Unprogrammed Process - Maximization - satisficing Decision-Making Terms Solutions Maker's Style - Implementation - Definition - Linear Thinking Style - Assessment - Risk - Nonlineary Thinking Style - UncertaintyChapter 2 Decision-making 97WORKPLACE CONFIDENTIAL Making Good
DecisionsLife comes with tough decisions. So is the job. Heavy is actually fix only about 50 percent of the time. And when the decisions begin with a choice, work they say they are 100 percent sure they are usually an onlyoffer. They often continue to decide with whom to make friends with and 70 percent
to 85 percent of the correct.trust at work, whether to join a new team or ac-cept promotion to a new city, how to respond to a situation to reduce self-confidence, start by acknowledging this ten that could jeopardize your ethics, or how to convey bad news dency, and expect it to be more likely , surface
when your scammer. fidence is extremely high or when accurate judgments are difficult to make. Next, adjust your confidence awareness Let's start with the basic principle that you can't avoid reflecting your level of knowledge on the subject. You're more likely to make decisions by ignoring them. The
decision not to do anything to be self-confident when you are considering the issues outsideis still a decision. It's a decision to maintain the status quo. your experience. Finally, directly address this bias, chal-lenging yourself to look for reasons why your predictions or you can maintain the status quo by
following any response may be wrong.of two ways-one active and the other passive. You can assess the current situation, determine your many of us are suffering from a tendency to want to capture foroptions, carefully exhaust the strengths and weaknesses of immediate reward and avoid immediate
costs. If he feels out of these options, and conclude that there is no new alternative well, we want to do it now; if it means pain, we want to be above the path you're on right now. It's actively postponing it. This direct bias of satisfaction explains why involvement is entirely consistent with rational decision-
making. It's so hard to diet, quit smoking, avoid credit card debt, or have your concern here, however, with a passive approach- except for retirement. Each comes with an immediate reward where the current path follows just because you're not into delicious food, a nice cigarette, an immediate purchase,
orconsider other options. You, for example, don't want extra disposable money to be spent. And everyone delays their expenses to find themselves regretful after spending 20 years in the go of some hazy future.nowhere job that you didn't like because you avoided looking for other opportunities. If you
consider yourself vulnerable to immediate grati-fication bias, what can you do? First, set long-term goals and how do you resist the indecision of the solution? The first review of them is regular. This can help you focus on longerstep awareness. You can't give up decisions by ignoring the term and help
you justify the decisions that win them. To do this, just choosing to continue along can be a long way into the future. If you don't know where you are You are on. This path may be the one you want, but being in 10 or 20 years old is easier to discount your future and make-up that recognizes that are
expenses associ-live at the moment. Second, pay attention to both the reward for maintaining the status quo and the changes. and expenses. Our natural tendency is to inflate the immediateYou also need to directly challenge the status quo. These are not rewards and underplay future expenses. For
example, think enough to know that doing nothing is a decision. You that would be like being retired without having savings and trying also need to sometimes justify why you shouldn't be ing live on $ $1,200-a-month Social Security check. Or look at another path that is different from the one you are
currently around for examples of people who are not planning on their futurefollowing. Why aren't you looking for another job? and now suffer the consequences. Are stocks, bonds and mutual funds in your pension plan properly aligned with recent changes in the economy? Finally, a rational decision-
making process involves the end of the consideration of the costs of inaction. Too often we focus on the fact that objectively collect information. But we don't. In its own way about the risks associated with change. You are less likely to selectively collect information so that it confirms our currentto get
bogged down in inaction decisions if you also address beliefs, and we reject evidence that the problems thoserisks are associated with do nothing. Beliefs. We also tend to take over the point of view information that confirms our preconceived views, while critical, and we should also look at perhaps the
three most skeptical information that defies these views.critical mistakes you are likely to make in decision-making: self-confidence, short-term focus, and confirmation overcoming this confirmation bias begins with having honed bias. While each is briefly mentioned in this chapter, let's est about your
motives. You are seriously trying to get an infor-closer look at them. Conquer these three and you will go mation to make an informed decision, or you are just looking for a way to improve the quality of your decisions. for proof to confirm what you would like to do? If you are seri-ous about it, then you need
to intentionally look the opposite. This means that you have to be pre-decision-making is more common and more potentially over couples to hear what you don't want to hear. You will also need a disaster than self-confidence. Almost all of us suffer from scepticism until it becomes habitual. Same from
him. When we are given factual questions and asked in such a way that the lawyer seeks conflicting evidence to underestimate the likelihood that our true, we tend to refute the plaintiff's case, you have to think about the reasons why be too optimistic. In general, we overestimate our beliefs can be wrong
and then aggressively seek outknowledge, outknowledge, risk, and overestimate our ability to prove that they are so.control events. Based on S. P Robbins, Solve and Conquer: Ultimate Research Guide found that when people say they are improving your decision-making, 2nd ed. (Upper Saddle River,
N.J.: Pearson65 percent to 70 percent believe they're right, they're ingested, 2015).98 Part 1 Introduction to ManagementKorean automaker Hyundai decided to adopt an EFFECTIVE design-thinking approach in testing the durability and quality of its i30 modern hatchback worldfamily car, allowing a
group of 40 safari park-beboons to explore it for 10 hours. Hyundai LO2.5 Per Carlsson, Product Development Manager, believes that the lessons learned from the successful wear and tear of car parts at IKEA are spending their days creating Volvo- and interior can be applied to the research and style of
the kitchen at Yugo prices. His job is to take a trial development of future cars. lems identified product-strategy board of the companySource:REX Features/AP Images (a group of Globe-trotting senior managers that monitors consumer trends and sets product priorities) and turn them into furniture that
customers around the world want to buy. One problem is defined by the council: the kitchen has replaced the living room as a social and entertainment center in the house. Customers are looking for kitchens that convey comfort and cleanliness, while allowing them to continue their gourmet aspirations.
Karlsson should take this information and make things hap-pen. There are many solutions to make-programmed and unprogramnable, and the fact that IKEA is a global company makes it even more challenging. Comfort in Asia means small, cozy appliances and spaces, while North American customers
want oversized glassware and giant refrigerators. Its ability to make good decisions quickly has significant implications for IKEA's success. The brand, Tru by Hilton, is set to satisfy the preferences of millennial torment, regardless of age. CEO Christopher Nassetta is positioning a new brand for people
who are united by a millennial mind - a young energy, a highlight of life and a desire for human connection. 36 Today's business world revolves around decision-making, often risky, usually with incomplete or inadequate information and under intense time pressure. Making the right business decisions in
today's fast-paced and messy world is not easy. Things hap-feather too fast. Customers come and go with a click or a screen napkin. Market landscapes can change dramatically overnight in multiple dimensions. can enter the market and get out of it as quickly as they entered. Entered. and prosperity in
such circumstances means that management decisions must adapt to these realities. Most managers make one decision after another; and as if it wasn't a difficult enough task, more is at stake than ever before. Bad decisions can cost the Miles. What do managers need to do to make effective decisions
in today's rapidly changing world? First, let's take a look at some of the proposed guidelines. We will then discuss an interesting new line of thinking that has implications for making effective decisions, especially for business types, called design thinking. Give it a shot! If your professor has appointed this,
go www.mymanagementlab.com to complete the simulation: Make decisions and see how well you can apply the ideas behind the decision-making process. Guidelines for effective decision-making is a serious business. Your ability and track record as an effective decision-makers will determine how your
organizational performance is assessed and whether you will be promoted to higher and higher responsibilities. Here are some additional tips to help you be the best decision maker. Understand cultural differences. Managers all over the world want to make the right decisions. But is there only one best
way to make decisions in the world? Or is the best way to depend on the values, beliefs, attitudes and behavioral patterns of the people involved? 37 Getting a job is less likely when people from one culture are deaf to cultural norms elsewhere. For example, L'Oreal's decision-making culture encourages
open debate that the leadership supports. For example, the company's confrontational approach is incompatible with cultural values in Southeast Asia, a region where 77 percent of managers say they do business. An Indonesian worker said: For an Indonesian the amount of decisions they face, the
confrontation in the group setting is extremely negative because it does do during a typical day has another person losing face. So this is something we try hard to avoid in any open elevated way. Create standards for making good decisions. Good solutions are forward-looking, design thinking to use
accessible information, consider all available and viable options, and make approach management problems like not creating conflicts of interest.40 Bill and Melinda Gates Foundation expect designers to approach design problem employees not to engage in decisions that could create conflicts of
interest. Fund staff are required to avoid and disclose ethical, financial or other conflicts of interest related to the fund and to remove themselves from the position of the decision-making body in relation to the any conflict situation involving the foundation. 41 Know when it's time to call it quits. When it is
obvious that the solution does not work, do not be afraid to pull the fork. For example, just a few months after Steve Rowe became CEO of the British company Marks and Spencer, he decided to close dozens of stores at home and abroad to increase the retailer's profitability. Although the previous CEO
reinstated large stores in Paris and its area after a decade of not working in France, Rowe reversed this decision as a way to significantly reduce costs.42 However, as we have said before, many decision makers block or misrepresent negative information because they do not want to believe that their
decision was bad. They are so attached to the decision that they refuse to admit when it is time to move on. In today's dynamic environment, this type of thinking simply won't work. Experts say that an effective decision-making process has these six characteristics: (1) it focuses on what is important; (2) It
is logical and consistent; (3) it recognizes both subjective and objective thinking and combines analytical and intuitive thinking; (4) A particular dilemma requires only as much information and analysis as necessary; 5) It encourages and sends the collection of relevant information and informed opinion; and
(6) it's simple, reliable, easy to use, and flexible.43 Develop your ability to think clearly so you can make better choices at work and in your life.44 Making the right decisions doesn't come naturally. You have to work on it. Read and learn about decision-making. We have a dossier on the decision-making
process and the results in which you evaluate your successes and failures in decision-making by looking at the process you have used and the results that you have received. Design thinking and decision-makingThe as managers approach decision-making, using rational and analytical thinking in
identifying problems, coming up with alternatives, evaluating alternatives, and as one of these alternatives, may not be the best, and certainly not so, choice in today's environment. That's where design thinking comes in. Designthinking has been described as an impending management problem, as
designersapproach design problems. 46 More organizations are beginning to recognize howdesign thinking can benefit them.47 PepsiCo embraces the importance of think-ing design. For example, the company's designers created Pepsi Spire, which is a high-tech dispenser machine with an action-
packed design. PepsiCo CEO Indra Nooyi hadthis say about the company's design approach: Other companies with dispenses have been focused on adding a few more buttons and flavor combinations. our design guys essentially said we're talking about fundamentally different interoccesses between
While many managers don't deal specifically with the product or process of designing deci-sions, they still make decisions about the work issues that arise, and design thinking can help them be better decision makers. What can the approach to design thinking 100 Part 1 Introduction to Managementbig
Data Managers teach about making more informed decisions? Well, this starts with the first step of identifying-a huge number of quantitative ing problems. Design Thinking says that managers need to look at the challenges of identifica-information that can be analyzed tion jointly and integratively, in order
to gain a deep understanding of the highly complex data processing situation. They should look not only at the rational aspects, but also at the emotional elements. Then always, of course, design thinking will affect how managers identify and evaluate alternatives. A traditional manager (educated in a
business school, of course) will take the options that have been presented and ana-lysine them based on deductive reasoning and then choose the one with the highest net present value. However, using design thinking, the manager will say: What are some things completely new, that would be fine if it
existed, but not now? 49 Design thinking means opening your perspective and getting an idea through observation and research skills rather than relying simply on rational analysis. We are not saying that rational analysis is not necessary; we say that there is more need for effec-tive decisions, especially
in today's world. Just Headed: Design Thinking also has broad implications for managers in other areas, and we will look to future chapters on its impact on innovation and strategy. Big data and decision-making - China's Alibaba, the world's largest online retailer, is profiting from its technology to
personalize customer offerings and process 175,000 purchases per second.50 - At Abu Dhabi-based Etihad Airways, managers rely on extensive data analysis for various business decisions. They looked at the financial services and technological resources of 14 different banks before selecting two
banks capable of providing the necessary data, in the necessary detail and software format, for key airline money management decisions.51 - It's not just businesses that use big data. Thanks to improvements in data collection and analysis techniques, including new software to model supply and
demand, managers of the National Blood Administration in Australia can make better decisions about distributing blood products to health facilities, saving many lives and a lot of money.52 Yes, there is a ton of information there-100 petabytes here in the decade of 2010, according to the opinion of the (In
bytes, which translates to 1 plus 17 zeros, in case you're interested!) 53 Both businesses and other finally figure out how to use it. So what is big data? This is a huge amount of quantitative information that can be analyzed with very complex data processing. One IT expert described big data with 3V: high
volume, high speed and/or high diversity of information assets. 54 What does big data have to do with decision-making? A lot, as you can imagine. With this type of data at hand, decision makers have very powerful tools to help them make decisions. However, experts warn that collecting and analyzing
data for the sake of data is a wasted effort. Targets are needed to collect and use this kind of information. As one person said: Big data is a descendant of Taylor's scientific management more than a century ago. 55 While Taylor used a stopwatch to time and monitor every worker's movements, big data
uses mathematical modeling, predictive algorithm and artificial intelligence software to measure and monitor people and machines like never before. But managers need to really examine and evaluate how big data can contrib-ute to their decision-making before jumping in with both feet. Why? Because
big data, no matter how comprehensive or well analyzed, needs to be mitigated by a good judg-ment. For example, a recent government report states, Companies should remember that while big data is very good at detecting correlations, it does not explain which correlations make sense. 56 Credit
companies have typically created a corre-lation between a credit account and a repayment history (lower scores are associated with lower payment histories). However, it is certainly not the case that everyone with a low credit score will not be able to pay for credit cards. When making decisions, it is
important to remember that correlation does not equate to cause and effect. Chapter 2 Decision-making 101 Chapter 2 PREPARING FOR: Exams / Victors CHAPTER SUMMARY by learning ObjectivesLO2.1 Describe eight steps in decision-making. LO2.2LO2.3 Solution is a choice. The decision-making
process consists of eight stages: (1) identifying the problem; (2) determine the criteria for decision-making; (3) weight criteria; (4) develop alter-LO2.4 natives; (5) Analyze alternatives; (6) Choose an alternative; (7) implement an alternative; and (8) to assess the effectiveness of decision-making. EXPLAIN
the four ways managers make decisions. The assumptions about rationality are this: the problem is clear and non-ambigu-ous; a single, well-defined goal must be achieved; All alternatives and consequences are known; and the final choice will maximize the winnings. Limited rationality says managers
make rational decisions but are limited (limited) by their ability Information. Satisficing occurs when decision makers make decisions that are good enough. With an escalating commitment, managers increase commitment to the solution, even if they maybe it was the wrong decision. Intuitive decision-
making means making decisions based on experience, feelings and accumulated judgment. Using evidence-based management, the manager makes decisions based on the best available evidence. THE WORK OF THE OWN and the conditions for decision-making. Programmed solutions are repetitive
solutions that can be handled by the usual approach and are used when the problem is solved simply, familiarly and easily defined (structured). Unprogramried solutions are unique solutions that require an individual solution and are used when problems are new or unusual (unstructured) and for which
information is ambiguous or incomplete. Definition is a situation in which the manager can make accurate decisions, because all the results are known. Risk is a situation in which a manager can estimate the probability of certain results. Uncertainty is a situation in which the manager is not sure that he
has left and can not even make reasonable assessments of probability. When decision-makers face uncertainty, their psychological orientation will determine whether they follow the maximum possible impact; Maximum choice (maxi-size minimum possible win); or the choice of minimax (minimizing
maximum regret - the amount of money that could have been made if a different decision had been made). DESCRIBE how biases affect decision-making. The 12 common errors and biases in decision-making include self-confidence, immediate satisfaction, anchor, selective perception, confirmation,
framing, availabil-ity, presentation, randomness, sunken expenses, self-serving biases, and hindsight. The management decision-making model helps explain how the decision-making process is used to select the best alternative (s), either by maximizing or satisficing, and then implementing and
evaluating alternatives. It also helps explain what factors influence decision-making, including decision-making (rationality, limited rationality, intuition), problem and decision types (well structured and programmed or unstructured or unprogrammed), and decision-making conditions (certainty, risk,
uncertainty).102 Part 1 Introduction to ManagementLO2.5 IDENTIFY effective decision-making methods. Managers can make effective decisions by understanding cultural differences in deci-sion decisions, creating standards for good decision-making, knowing when it's time to call it quits, using an
effective decision-making process, and developing their ability to think clearly. Effective decision-making (1) focuses on what is important; (2) is logical and (3) recognizes both subjective and objective analytical and understandable approaches; (4) Only enough information is required as is needed to solve
the problem; (5) encourages encourages Guides who gather relevant information and informed opinions; and (6) simple, reliable, easy to use and flexible. Design thinking is approximation of management problems as designers approach design challenges. This can be useful in identifying problems and
identifying and evaluating alternatives. Using big data, decision makers have personal tools to help them make decisions. However, no matter how comprehensive or well-analyzed big data is, it should be tempered by good judgment. Pearson MyLab Management Go to mymanagementlab.com to
complete the problems marked with this icon. REVIEW AND DISCUSSION 2-1. Explain how well decision-making is a skill that can be information. Why do you think these styles will be explored and improved. Untrusted? 2-2. Where in the eight-step decision-making process 2-6. What should a good
manager do if he becomes a likely problem area for managers? obviously, the decision already made clearly does not work and does not solve the situation? 2-3. What role does intuition play in decision-making? Discuss. 2-7. What do you understand about personalization technologies? How big data fits
into the solution - 2-4. Is satisficing a desirable way to create management processes? Solutions? Most managers adopt specific styles to make decision-making easier. This helps them sort out the Pearson MyLab managementIf your professor has appointed these, go to the www.mymanagementlab.com
for thefollowing Assisted-graded written questions: 2-8. How can the culture of an organization influence the way managers make decisions? 2-9. Efe looked at last year's sales figures and included a 20 percent increase for the year. He believes his business can cut costs by at least 15 percent
effortlessly. Identify his biases and the mistakes he can make. Chapter 2 Decision-making 103 PREPARING FOR: My career PERSONAL ASSESSMENTS P I PERSONAL INVENTORY ASSESSMENT Solution to problems analytically and creatively Solutions are all about solving problems. Do this PIA
and learn about your level of creativity and innovation in problem solving. ETHICS DILEMMAIn the United Kingdom, the National Health Service gagged the provision as part of the agreement. It turned 1.7 million people.57 It's the world's largest publicly it down. She has used the support of hundreds of
colleagues to fund health care. There are cases when employees of it finally return to work. The petitions, which were received, were sacrificed by management for greater support from former patients added to the call.one cause or another. A striking example is that the elder however, she will never work
at this hospital again.consultant, about 50 years working in London after the incident, was instrumental in inhospitability. She was suspended on full payment years of trying to bring about change in support and protection, there is concern about the level of staffing at its clinic. whistleblowers in service.
Shortly before her suspension, a major case of child abuse in hospital made headlines. Like a hospital 2-10. Was the hospital's decision to suspend the consultant if the consultant had failed to cope with these problems, was the consultant correct? Explain why or why not.became a whistleblower and
exposed to staffing problems. Deeply concerned, the hospital quickly offered her money 2-11. If you were a line manager for a consultant, how would you handle the situation? SKILLS EXERCISE Develop your SkillAbout Skill Creativity for you when least expected. For example, when you arecruic is the
mood. You have to open your mind about to fall asleep, your relaxed mind sometimes to new ideas. Everyone has the opportunity to be creative, whispers the solution to the problem you face. Listen tobut many people just don't try to develop this ability. That voice. In fact, most creative people keep a
notepad Sharing Your Creative Skills can help you become better next to their bed and write down these great ideas when they are a problem-solver and contribute to the workplace. Dynamics are happening. So they don't forget them.environments and managerial chaos require managers to step away
from your comfort zone. Everyone is looking for new and innovative ways to achieve their goals as well as the goals of an organization in a comfort zone in which certainty exists. But creativity and stips in the practice of the skills known often do not mix. To be creative, you need to think of yourself as
creative. Although it is a simple step away from the status quo and focus your mind on something new. Participation in activities that put you outside your comfort zone.suggestion, research shows that if you think you can't be acrooth, you won't. Believing in yourself is the first step you not only have to
think differently; You have to do things to become more creative. differently and thus challenge yourself. Learn to play Notice your intuition. Everyone is a musical instrument or learning a foreign language, an instructive mind works well. Sometimes the answers come by example, opens your mind to a
new challenge.104 Part 1 Introduction to management look for changes in scenery. Humans are often brainstorming creatures with others. Being creative is not a single bite. Creative people will get themselves out of their habits with activity. Bouncing ideas from others creates synergistics that mimic their
scenery, which can mean going into a quiet effect. and a quiet area where you can be alone with your thoughts. Turn creative ideas into actions. Inventing ideas is to find correct answers. Only half of the process is limited to discussion. Once the ideas of the idea generated, theyrationality, we said that
people looking for solutions that are good should be implemented. Keeping great ideas in your mindenough. Being creative means continuing to look for others or on paper that no one will read much for expandsolutions, even if you think you have solved the problem. your creativity. A better, more
creative solution can simply be found. Practicing Skills, play the protector of your devil. Challenging yourself to develop your creative skills similar to building yourdefend your solutions will help you develop muscle confidence through exercise; it takes effort over time. Everyyour creative effort. Second
guess yourself can also week choose a new activity to develop your creative skills. Tryhelp you will find more creative solutions. something new, take an art class, practice brainstorming, Believe in finding a solution. How to believe or spend some time with a new group of people. I'm in a magazine of
creative ideas or ideas. yourself, you also have to believe in your ideas. If you don't think you can find a solution, you probably won't. WORKING TOGETHER Team ExerciseJust How do you make decisions? Researchers suggest creating a group of three or four people and discussing how you source
that how we make decisions depends largely on our and processing information. Which of you is linear and which is the way of thinking. Is it all about sources are nonlineous? Share your findings with the rest of the class.information we use and how we handle this information. Can you come to an
agreement on whether one method Is the researchers classified numerous ways better, faster or more accurate than the other? Is it possible to think in two different styles: linear and nonlineous. change from linear to nonlineary or vice versa? MY TURN TO BE A MANAGER- Consider the big decision you
made. Write about the solution, etc. What did you learn about decision-making from these examples? describing a decision using steps in the decision-making process as a guide. What would you and interview the two managers and ask them to do differently in the process to improve their decision?
what it takes to be a good decision maker. Write down their suggestions and be prepared to submit them to Write a Procedure, Rule and Policy for your class. Be sure that each one - Make a web search for the phrase 101 blunt moments clear and understandable. And be sure to explain how it fits the
characteristics of the procedure, the rules, or the business. Get the most up-to-date version of this end of policy. year list. Choose three examples and describe what happened. What is your reaction to the examples? How to find three examples of management solutions described, whether it could have
been better in any of the popular periodicals (Wall Street - visit the website Mindtools (www.mindtools.com) and magazine, BusinessWeek, Fortune, etc.). Write a document describing each decision and any other information such as finding decision-making tools. Explore the solution as what led to the
decision that happened as a result of taking the tools offered and choose one tool to use the next time you need to make a decision. Chapter 2 Decision-making 1051CASE APPLICATION On The Cards: Decision MakingCard Connection is one of the largest card publishers in the United Kingdom and
market leader in the franchising distribution of greeting cards in the United Kingdom and the Republic of Ireland (ROI). Founded in 1992, it is considered one of the UK's most franchised operations and has been a member of the British Franchise Association since 1995. Its franchisees do not operate in a
standard retail format and instead act as in-termediaries in the supply of cards to a number of retail outlets in dedicated franchise areas. Franchise holders typically supply products to post offices, stores, gas stations and other retailers. Given this customer base, Management-ment Card Connection uses
a business model that requires to place their products in theoutlets on cargo-based-customers not buying shares, but only paying for what they sell. This proved to be a success. At the beginning of 2017, there were 63 franchises in the UK and about 12,000 outlets using their services in ROI. Atany is
currently in time, Card Connection management is looking for a potential franchisee mix of new and unexplored territories and replacing franchisees. To decide which areas to allocate to which franchise owner, Card Connectionanaly has several data sources. The main factors in the data are demographic
factors, the combination of raw demographics and the number of households. Decision-makers must analyze the number of potential shareholders, competitors in the area, the average income of the population and other elements. While the initial process of dividing the United Kingdom and ROI is an
equal part, as the franchise evolves with changes in demographics, regional and local economic and other criteria, the value of each area changes. Each franchise owner has discrete and exclusive territory that only they can sup-ply k. It is because of this decision-making process Card Connection in
relation to the territory often revolves around geography. In most cases, this is how the franchise areas are defined and how the territories are withdrawn. The main problem arises when the franchise business is away from a customer outside its franchise area. should be clear about these cases. Some
franchise agreements allow the franchisor to change territory if there is a circumstance. It's This. changes in demographics in the territory, technology development or de-manda enhancement for a product or service offered under the franchise system.59 DISCUSSION QUESTION 2-12. What current
decisions are needed with regard to the size of the franchise area? What factors should be considered when deciding to acquire a franchise? 2-14. How can globalization affect card-connection decision-making?2CASE APPLICATION Manchester City: Football Big Data ChampionsIn most football teams,
a few minutes before the match, is held in the locker room, where the coach gives last-minute advice and gives a motivational speech to the players. However, for Manchester City Football Club the ritual is a little different. Theteam spends 15 minutes before each match meeting the club's performance,
discussing what they have done well or wrong in previous matches. For example,106 Part 1 Introduction to the Office of Defense examines several factors: the number of crosses, effective or ineffective tackles, balls lost or recovered, relationships with midfield, and movement in the pro-tecting of their
penalty area. The day after the match, the analysis team led by Gavin Fle into the game gives each player a detailed and personalized account of all their movements during the match, allowing each player to get accurate feedback on the necessary improvements. In a 2012 interview with Forbes, Flake
said the purpose of the analytical unit was to help the club make smarter decisions based on objective and more informative data, as well as improve players' productivity, helping them to become more reflective and aware of their unique features, actions and movements on the field. To illustrate how the
team's performance analysis helps better perforate the team, let's look at Manchester City's performance and set-piece goals scored in the 2010-11 season. According to the analytical team, City were lower than any other club in the Premier League with only one set-piece goal scored in more than 21
matches. To underperform what led to goals scored in several European leagues, the team of analysts studied more than 500 corner kicks. The players were then presented with videos that lacked the best tactics and movements used by other teams. It helped City score nine goals in their first 15
matches of the following season from corners, a huge improvement in their game. Data analysis is an essential decision-making tool for Manchester City managers at all levels, including youth teams. For example, future young playoff players are helped to understand their strengths and weaknesses in
different games of formation and what aspects they need to focus on developing their talent. It's important to note that big data is just means of means achieving Man Chester City's strategic goals of developing a youth team that integrates young homegrown talent into the formation of the first team.
Analysts have shown that the team has become very successful - Manchester City have been the best in the 2011/12 and 2013/14 seasons two years in a row since 2012, and also won the title in the 2011/12 and 2013/14 seasons after more than four decades without victories. Of course, big data isn't
the only factor behind these successes, but it was very important. To continue to be a leader in big data football, in 2016, Manchester City orga-nized global Hackathon, with more than 400 applications obtained from around the world where data and football experts created algorithms and simulations
using data from real players that had never before been available to external actors. The challenge was to create algorithms that could help identify new movements, passes, runs and pressure to be more effective on the field. The winning team, which received a cash prize of 7,000 pounds and a promise
to collaborate with the performance analysis team, has created a learning machine algorithm that tracks decision-making during games.60 DISCUSSION QUESTIONS 2-15. What decisions do football managers make? Would you characterize these solutions as structured or unstructured problems?
Explain. 2-16. Describe how big data can help football managers make better decisions and how it affects decision-making. 2-17. What conditions are likely to affect the work of the group of analysts: certainty, uncertainty or risks? Explain. 2-18. Do you think it is appropriate for football managers to use
only quantitative information to evaluate their players' performance during the season? Why or why not? How can big data transform football decisions in the future? Chapter 2 Decision-making 107ENDNOTES 1. S. Minter, Snap Making Season, Industry Week, 16. See, for example, G. McNamara, H.
Moon and. Bromili, May 2010, page 6; and D.A. Garvin and M.A. Roberto, What is Banking on Liabilities: Intended and UnintentionalOu Not Aware of Decision Making, Harvard Business Consequences attempts to organize attenuateReview, September 2001, page 108-116. Escalating commitments,
Academy of Management 2. A bold alternative to the worst best practices, magazine, April 2002, page 443-452; W. S. Rao and A. Monk, BusinessWeek Online, www.businessweek.com, September 15, Influences of Individual Differences and Anonymity for 2009. Commitment to Solutions, Journal of
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failed course of action: Division 6. R.D. Volkema, The Problem of Wording: Her Portrayal in the Role of Choice and Excuse, Journal of Applied Texts, Organizational Behavior Review, 11, No. 3 Psychology, June 1994, page 360-363; and B.M. Staw, (1986-1987), page 113-126. Escalating commitment to
the course of action, 7. S. Gupta, In Mobile Advertising, Timeline Is It, Academy of Management Review, October 1981, Harvard Business Review Online, , November 4, page 577-587.2015. 17. W. Cole, Stapler Wars, Time Inside Business, April 8. Ibid. 2005, p. A5. 9. Jessica Holland, Big Appetite for
UAE Restaurant Locator 18. See E. Dane and M. G. Pratt, Exploring Intuition and Start-UPS, National (UAE), March 15, 2016, http:// His Role in Management Decision Making, Academy ofwww.thenational.ae/business/the-life/big-appetite-for-uae-Management Review, January 2007, p. 33-54; M.
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Smith and E. Shefi, Intuitive Executive:2016); Aka zheng, Regulators on Tightening Understanding of Cyber Defense and Applying 'Gut Feel' in Decision-Making Like Attacks in Asia Increase, Wall Street Journal, June 14, Academy of Management Executive, November 2004, p. 76-2016, and L.A. Burke
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Type and Part 110 Part 1 Introduction to OfficePART 1 Manager's Dilemma 30 Percent Board of Directors For women. The rest of Ger-man's companies were supposed to set quotas once Selina Lo likes her job as a manager of a toy store in Sanaa in 2016. One company, Deutsche Telekom,
choseFrancisco. She loves the chaos and excitement of children aggressively to solve this problem in the first place. He says he intends toas they wander around the store in search of their loved ones more than twice as many women who are managerstoys. Teddy bears removed from shelves and toy
trucks left for five years . One of the actions the company takes is im-sex are an integral part of the management of the toy store. However, its proving and increasing the recruitment of women university hail is the biggest problem that is the problem faced by many retailers, ates. The company's goal is to
have at least 30 percent of its employees' turnover. Many of its employees leave behind just a seat in executive development programs held by women.a few months at work because of the hectic schedules and long other steps taken by the company revolve around working hours. Selina is always
looking for new ways to keep vironment and family work issues. Deutsche executives have committed to working. She also cares about Renee Obermann said: Taking on more women in managing customer requests and complaints and trying to resolve the ment position is not about enforcement wrong
satisfactorily. This is what Selina's life as a manager is egalitarianism. Having more women on top. However, retailers believe that people with Selina will just let us work better. skills and enthusiasm for managing the store a little, and farbetween. Retail store management is not a career that most people
discuss in light of what youcollege graduates aspire to. Attracting and retaining the talented learned in Part 1:Managers is still a challenge for all kinds of retailers. The questions W hat can Deutsche Telekom face in the set Suppose you are a recruiter for a major retail chain and female university
graduates? Want college graduates to consider store-management-ment as a career option. Using what you learned in Part 1, how could she solve these issues? How would you do that? What challenges can she face when making changes to work and family programs, and how can she address these
issues? Who holds more leadership positions around the world: women or what do you think of Oberman's statement that hav-men? Statistics tell an interesting story. In the United States, ING more women at the top will allow women occupying 50 percent of all leadership positions and companies to
perform better?15 percent were members of senior management but - W hat can other organizations around the world learnonly 4 percent of Fortune 500 CEO The United from Deutsche Telekom? Only 1.8 per cent of FTSE 500 companies are women. In Germany, women occupy sources:. Dwyer,
German Councils need women, not quotas, Bloomberg View35.6% of all leadership positions, but only 3% online, www.bloombergview.com, March 10, 2015; M. Egan, Still Missing: Womenof Women are members of the executive board. Asian business leaders money.cnn.com, March 24, 2015; A.
Swanson: The number of women in leadership positions is much higher. Fortune 500 companies led by women is at an all-time high: 5 Percent, Wash-In Thailand, 30 percent of female executives hold the title ington Post online, washingtonpost.com, June 4, 2015; Nearly 20 percent of femaleof IS, like 18
percent in Taiwan. In China, 19 percent of Chinese managers are CEOs, www.fastcompany.com, March 8, 2011; S. Doughty, women in the workforce are CEOs. Even in Japan, 8 percent are cracking the glass ceiling: female employees have the same chance as men reach senior female executives.
Census of Australia's best ing top, figures show www.dailymail.co.uk, March 4, 2011; G. Toegel, Dis-200 companies listed on the Australian Securities Exchange destination statistics, positive outlook, Forbes.com, February 18, 2011; E. Butler, showed that 11 percent of the company's executives were
Wanted: female bosses for Germany, www.bbc.co.uk, February 10, 2011; With.. Women. Finally, in Arab countries, the proportion of women Robbins, M. Coulter, J. Sidani and D. Jamali, the manager: Arab world leadership positions are less than 10 percent. (London: Pearson Education Limited, 2011),
page 5; The proportion of executive managers and directors of the ASX 200 companies that are women, Australian Bureau As you can see, companies around the world have great stats www.abs.gov.au, September 15, 2010; Stevens and J. Espinosa, Deutschegender gap in leadership. Men far
outnumber women in Telekom Sets Women Managers quotas, Wall Street Journal Online, www.wsj.com, senior business executive positions. These circumstances were taken on 22 March 2010; J. Blaue, Deutsche Telekom launches a quota for the best female men, despite efforts and campaigns to
improve equality agers, www.german-info.com/business_shownews; and N. Clark, Target's Deutschein workplace. The situation may gradually change in Telekom: more women as managers , New York Times online, www.nytimes.com,Europe. Many countries there require corporations allo- March 15,
2010.cate a specified percentage of board seats for women. For ex-ample, 100 of the largest German corporations award at least a continuation of the Starbucks-Introduction community case. Caring. Made. Coffee. Five Cs that describe the essence of Starbucks Corporation - what it stands for and what
it wants to be as a 1 Practice of Managing 111Beginning in 1971 as a cafe in Seattle's Pike Place Market, Starbucks has a clash with the existing culture. But Schultz was pretty good at becoming the world's top specialty coffee retailer with stores more than convincing and was able to allay owners' fears.
They had an expanded product line including beverage products, including beverages, and asked him to join the company as director of retail opera and fresh food, global consumer goods, as well as Starbucks card and consumer tions and marketing, which he enthusiastically did. Shul Rewards
Program. Starbucks' first store, shown here today, retains its original tz passion for the coffee business was obvious. Although with signs and other items with the first company logo. Some employees of the company resented the fact that heSource:SUMA Press, Inc./Alamy was an outsider, Schultz found
his niche and he had a lot of ideas for the company. As he says: I wanted to make more than 31,000 stores in 70 countries, Starbucks is a positive effect. number one in the world specialty coffee retailer. Kom-Pani also owns Seattle's Best Coffee, Teavana, Tazo Tea, about a year after joining the
company, while at busi-Starbucks VIA, Starbucks Refreshers, Evolution Fresh, Ness Travel in Milan, Schultz went to the espresso bar and La Boulange, and Verismo brands. This is a company that immediately knew that this concept could be successful so unobtrusively personifies the challenges facing
managers in the modern United States. He said: There was nothing like an inglobally competitive environment. To help you better America. It was an extension of the people's porch. It was to be aware of these problems, we are going to take an in-depth emotional experience. I believed intuitively we could
dolook at Starbucks through these continuing events, which it is. I felt it in my bones. Schultz acknowledged that while you'll find the end of each piece in the tutorial. Every Starbucks viewed coffee as products, something to be baggedof these six incomplete ongoing cases will look at the Star- and sent
home with products, Italian coffee bars in terms of the material presented in what were more like the experience-warm, community experi-part. Although each case stands alone, you will be able to ence. This is what Schultz wanted to recreate in Unitedsee the progression of the governance process of
how you work states. However, Starbucks owners weren't really interested though each one. in making Starbucks great and don't really want to give the idea a try. So Schultz left the company in 1985 to start hisThe beginning of his own small chain of espresso bars in Seattle and Vancouver called Il
Giornale. Two years later, when Starbucks owners we in the coffee business, serving people. We Are We Finally wanted to sell, Schultz raised $3.8 million from local government people serving coffee.It's investors philosophy to buy them back. It's a small investment madeof Howard Schultz, the chief
executive officer of Starbucks. He is a very rich man indeed!a philosophy that has shaped and continues to shape-company. The company Facts First Starbucks, which opened in Seattle famous Starbucks' main product of coffee-over 30 blendsPike Place Market in 1971, was founded by Gordon Bowker,
and single-born coffee. In addition to the freshly brewed Jersey Baldwin, and zeu Siegl. The company was named after coffee, here's a sampling of other products companythe coffee loving first assistant in the book Moby Dick, which also suggests: also influenced the design of Starbucks distinctive two -
and handmade drinks: Hot and iced espressotail logo siren. Schultz, a successful New York busi-nessperson, first joined Starbucks in 1981 as a retailer of beverages, coffee and soft mixed drinks, a representative of the Swedish kitchenware manufacturer. He Tazo® teas, and smoothieswas hooked
immediately. He knew he wanted to work - Goods: Homemade espresso machines, coffee brewers for this company, but it took almost a year before he could and grinders, premium candy, coffee mugs and coffeepersuade owners hire him. After all, he was out of new accessories, CDs and other various
York items, and he didn't grow up with the values of com and fresh food: baked pastries, sandwiches, salads, hotpany. Owners thought Schultz's style and high-energy breakfast items, and yogurt parfait - Global Consumer Products: Starbucks Frappuccino® coffee drinks, Starbucks Iced Coffee Drinks,
Starbucks Liquors, and a line of super-premium ice cream and Starbucks cards and My Starbucks Awards® program: rebootable store value card and consumer rewards program - Brand portfolio: Starbucks Entertainment, Ethos™ Water, Seattle Best Coffee® Tea in late 2015, the company had more
than 235,000 partners (employees) worldwide. Howard Schultz is chairman, president and CEO of Starbucks. Some of the other interesting execu-tive positions include the Chief Operating Officer; Global Chief112 Part 1 Introduction to Management Marketing Officer; Chief Creative Officer; The executive
vice president felt it was absolutely necessary and critical. Anddent Partner Resources and Chief Community Officer; former rather than coming together in Seattle, where Starbucksecutive Vice President, global supply chain; Executive Vice headquarters, Schultz chose New Orleans as the place for the
president, global coffee; Training a business partner and in-conference. Here was a city still recovering from a hur-ternational resource coordinator Katrina, who had completely devastated him five years earlier, in 2005. Let's talk about a logistical nightmare - and that's the solutions, the decisions were
made. But this decision was a symbolic choice. New Orleans has been in the process of rebuilding itself and succeeding, and one thing you can't understand is that after running the show Starbucks was in the process of rebuilding itself and could for 15 years at Starbucks, Howard Schultz, at age 46,
stepped down in success, too. While there, Starbucks Partners volunteered out the CEO job in 2000 (he stayed as chairman for about 50,000 hours of time, strengthening Schultz and the company) because he was a little bored. By striding all managers that, despite all the problems, Starbucksdown as
CEO, which he planned to do, prepared not lost its value. Other decisions, such as closing 800for, and there was no intention to return to the substance it keeps and the layoffs of 4,000 partners, were more difficult. Was say he agreed to trust the decisions of others. Since that transition time, Schultz has
done a lot of deci-at-first the company has flourished, but then the dangers of rapid sions. Starbucks is back even stronger in whatmass-market expansion began to set and customer traf-it means reaching in 2015 a phenomenal record financialfic began to fall for the first time. As he looked at what the
results were and it was on track to continue those record-breaking results.was going on, there were times when he felt that the decisions that were made were not good. Schultz couldn't shake so we're starting to see how Starbucks epitomizes thehis guts of the feeling that Starbucks has lost its way. In
fact, in the five Cs-community, communication, caring, committed, andmemo dubbed the espresso shot heard all over the world, coffee. In this ongoing case of running Prac-he wrote to his top managers to explain in detail how the lice section at the end of Part 2-6, you'll find that the unprecedented growth
of morecompany has led to a lot of minor about Starbucks unique and successful management methods. Compromises that when added led to watering down as you work on these remaining ongoing cases, keep the inof the Starbucks experience. Among his complaints: a sterile mind that might be the
information included in this intro-cookie cutter shop layouts, automatic espresso machine duction you can review.that robbed a barista theater of roasting and brewing a cup of coffee, and a flavor-blocked package that does not allow Discussion Matters to inhale and enjoy that distinctive coffee flavor.
Starbucks lost its coolest factor and criticism of Schultz's P1-1. What management skills you think would be the state of the company's stores, was blunt and bold. most important for Howard Schultz to have? Why? There was no longer an emphasis on coffee, but only on The Mc-What Skills do you think
would the most important cash ring. During the year of the memo (and for a Starbucks store manager to have? why?eight years after he left the CEO concert), Schultz returned incharge and was working to restore the Starbucks experience. P1-2. How could the following management theories/its goals
were to fix problem stores to awaken approaches to be useful to Starbucks: scientific and emotional attachment with customers, and make long-term management, organizational behavior, quantitative changes such as company reorganization and reconstruction-approach, a systematic approach?ing the
supply chain. The first thing he did, however, was to apologize to the staff for the decisions that brought P1-3. Choose three of the current trends and challenges facing the company at the moment. In fact, his intention to restore managers and explain how Starbucks can bequality control led him to the
decision to close everything (with this impact. what could be the consequences for the first time) 7,100 U.S. stores in one evening to retrain 135,000 line managers? Average managers? Top managers?barista on coffee experience ... what that means it was. It was a bold decision and one that many P1-4
experts. Give examples of how Howard Schultz can be on public relations and financial disaster. But to perform interpersonal roles, the informationshuss felt that doing so was absolutely necessary to revive both the roles and the decisions of Starbucks. Another controversial decision was to hold a
leaders' conference with all P1-5 store managers. Look at Howard Schultz's Starbucks philosophy. (about 8,000 of them) and 2,000 other partners - all in one How will it affect how the company is time and all in one place. Why? To revitalize and galva-managed?nize these employees around what
Starbucks stands for and what needs to be done for the company to survive and P1-6. Go to the company's website, www.starbucks.com, to thrive. Schultz was unsure of how Wall Street would be and find a list of senior officers. Choose a one-on-one to the cost, which was about $30 million in total (air-
these positions and describe what you think, food, hotels, etc.), but then again it doesn't care because the work can include. Try to imagine what kinds of planning, organization, leading and controlling this person will have to do. P1-7. See the company's mission and guidelines on the company's website.
What do you think of the mission and the guidelines? Principles?

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