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    2. Decisiin Making and Problem Solving

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    31 views16 pages

    Decisiin Making and Problem Solving

    Uploaded by

    Aly Tutor

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    © All Rights Reserved
    Download as PDF or read online from Scribd
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    CHAPTER 5 Decision Making and Problem Solving hen Andrew Schuman bought Hammond's Candies in 2007, the nearly 90-year-old candy Company was operating in the red. Schuman, ° ? who Says he knew Nothing about the candy business. soon Differentiate between non- learned th f ker, rather than an execu ogenmed ile 'an an assembly-line worker, ‘ e ‘grammed decisions, tive, had dreamed up the design of the company’s popula © Eien the sieos imvetvedin "ibn snowflake candy Sec. "or ommamad It was an “aha” moment, he says. “I thought, ‘wow, we 6 Understand the major factors have a lot of smart people back here, and we're not tapping that influence decision making their knowledge.” So Schuman then decided to offer a $50 in organizations bonus t Ali ho came up with success- ° dete the vanaf 0 assembly-line workers who p Potential limitations of group ful ideas to cut manufacturing costs ° decision making. “They're the ones making and packing the candy, so | Understand the nature of cre ativity and how it cont he thought they probably know how to do thi Ings better and to managerial work. more efficiently,” says Schumnan, president and director of After studying doing the exerci be able to: hy Describe organizational pro- the Denver, Colorado, company that has about 90 employ- rams for improving creativity ‘ aes ees. The informal idea program, which is open to all Ham- mond's Candies workers, handed out more than $500 in employee bonuses in its first year of operation One worker te Suggested a tweak in a machine gear that reduced workers needed on an assembly line from five to four. Another employee devised 2 new way to protect candy canes while €n route to stores, which resulted in a 4 percent Freduction in yeakage F eee 182 CHAPTERS. Dac problem \V. A dscrepancy between ideal and actual conditions decision = 1. A choice among alternatives. LEARNING OBJECTIVE Diterentiate between Ronprogrammed and programmed decisions. onprogrammed k decision A decision that is Githeult because of its complexity and the fact that the person 2 it infrequently 80 Making and Problem Solving ip us in the that hel I's these little tiny things that someone notices vas, become long run," says Schuman, who adds that his Profitable. compan tes a couple of ‘a company 10 um for The story about the candy company owne! istrat important points about finding imaginative ideas 10 move oechani ward. Companies should encourage suggestions, create & spt exploro® collecting ideas, and offer rewards for useful ideas. THis © 5 individually » decision a works ams and make ning cs ta y and innovation jifeblood of in prob: and in groups. We emphasize the role of creativit lem solving because useful new ideas are the organizations. 4, problem is a discrepancy between ideal and actual For example, a hospital might have too many beds satin when the ideal is to have an occupancy rate of 90 percent or g ik A decision is choosing among alternatives, such as affiliating More doctors so as to receive more patient referrals: pt carry out all mary - Problem solving and decision making are required to carry e they must most | conditions. unoccupied agement functions. For example, when managers control, make a series of decisions about how to solve the problem of getting per formance back to standard. Decision making can be seen as the heart of management. A distinguishing characteristic of a manager's job is the authority to make dec sions. NONPROGRAMMED VERSUS PROGRAMMED DECISIONS Managerial workers make a variety of decisions. A problem that takes a new and an unfamiliar form or one that is complex or significant calls for a non- programmed decision. A complex problem contains many elements. Signifi cant problems affect an important aspect of an organization, such as the introduction of a new service. Virtually all strategic decisions are nonpro- grammed. A well-planned and highly structured organization reduces. the number of nonprogrammed decisions. It does so by formulating policies to help managers know what to do when faced with a problem. Many small firms do not offer much guidance about decision making "Ten Evans, “Entreprencurs Seek to Ect W December 22, 2009, p. BT wkers’ Ideas.” The Wall Street Journal Nonorogrammed Verwus Progammed Decwore — 163 Within the cate to hi TASTY Of nonprogrammed decislons, there are wide varie Davidson executive ys omplex nonprogrammed decision for a Harley heavy bikes 10 Sought! be whether to outsource the manufacture of sts including the ‘ 5 It would be necessary to consider many issues Costs Of labor angio" Harley has as an American icon and the relative labor ane Would be whethe MPping oi A less complex nonprogrammed decision :

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