Chapter Seventeen

Communication and Decision Making

I. Chapter Objectives
After reading and studying this chapter, the student should be able to do the following:
1. Define communication
2. List barriers to effective interpersonal communication and how to overcome
them
3. Differentiate between formal and informal communication
4. Explain communication flows and networks
5. Outline the eight steps in the decision-making process
6. Know the difference between rational, bounded rational, and intuitive decisions
7. Identify situations in which programmed decision is a better solution than a
non-programmed decision
8. Differentiate the decision conditions of certainty, risk, and uncertainty

II. Key Teaching Elements/Chapter Outline/Lecture Suggestions

Object.
Managerial Communication
Communication is the oil that lubricates all of the other 1
management functions of forecasting, planning, organizing,
motivating, and controlling.

Managers interact with others throughout the day by the following 1

means:
• Personal face-to-face meetings
• Telephone
• Mail/fax
• Memos, reports, log books, and other internal/external written
communication
• E-mail, web sites

The simplest method of communication involves a sender, a 1

message, and a receiver. Several factors can lead to distortion of
the message, such as noise interference, poor listening skills, and
inappropriate tuning.

What is communication?
Communication is the exchange of information and meaning. The 1
essence of communication is the exchange of information.
Another important aspect of communication is understanding the
meaning.

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Successful communication results when a sender communicates a 1
thought or idea and the receiver perceives it exactly as envisioned
by the sender. You can disagree with something even though you
fully understand it.

Managerial communication includes two different 1

types: Interpersonal communication occurs between two or
more individuals, and organizational communication includes all
the different forms, networks, and systems of communication that
occur among individuals, groups, or departments within an
organization.

The Interpersonal Communication Process

Communication between two or more people is described as 1, 2
interpersonal communication. The interpersonal communication
process is made up of seven elements: the sender, encoding, the
message, the channel, the receiver, decoding, and feedback

Noise is often a part of the interpersonal communication process. 1, 2

Noise can consist of various activities going on in the
background… Therefore, noise is considered a somewhat constant
disturbance in the communications process and the cause of
distortions of the message

Too much knowledge may cause the message not to be understood 1, 2

at all. Preexisting attitudes and the cultural system of the sender
can influence the encoding of the message as well.

The message itself, such as a written document, an oral speech, or 1, 2

gestures and facial expressions, can be influenced by disturbances.

The channel used to convey the message is important to the whole 1, 2

communications process.

Whether the sender chooses to use an office memorandum, a 1, 2

phone call, e-mail, gestures, or pictures to convey the message will
play a large role in how accurately the receiver will understand it.
Using two channels can sometimes eliminate distortion—for
example, oral speech followed by a written summary.

The receiver is limited by the same factors as the sender. If he or 1, 2

she has too little knowledge of the subject, distortions will take
place. Likewise, if he or she has too much knowledge, too much
can be read into a simple message

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 Communicating Interpersonally
Examples of communication by managers include face-to-face, 1, 2
telephone, e-mail, fax, group discussions and meetings, memos,
formal presentations, bulletin boards, mail, employee publications,
and teleconferencing.

Communication experts generally agree that when two people are 1, 2

engaged in a face-to-face conversation, only a small fraction of the
total message they share is contained in the words they use. A
large portion of the message is contained in vocal elements such as
tone of voice, accent, speed, volume, and inflection. The largest
part of the message—and arguably the most important—is
conveyed by a combination of gestures, postures, facial
expressions, and clothing.

Although people may listen closely to what is said, nonverbal 1, 2

behavior may constitute two-thirds or more of total
communication

Nonverbal communication is communication without 1, 2

words…gestures, actions, and the type of clothes worn
communicate messages to us.

Body language consists of facial expressions, gestures, and any 1, 2

other ways of communicating a message with your body

Verbal intonation is using your voice to emphasize certain parts 1, 2

of a phrase or certain words.

Barriers to Effective Interpersonal Communication

Everybody perceives things differently. This is due to different 2
backgrounds, upbringing, personal experiences, and major
influences in their lives. No two people are alike, and neither is
their perception

The actual meaning of words, or semantics, is the cause of many 2

failed communication efforts. The literal meaning of words and the
actual meaning can be two different things, but they can be
expressed in the same way

Nonverbal communication—communication through body 2

language—is a typical means of communication. However, it can
also be considered a barrier to effective communication

Misinterpretations of nonverbal communication are especially 2

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dominant in cross-cultural communication. Gestures and
expressions mean different things in different cultures

Ambiguity, vagueness, or uncertainty can occur in a message being 2

conveyed. A message may be ambiguous, meaning the person
receiving the message is uncertain about the actual meaning

When people feel that they are being verbally attacked or criticized, 2
they tend to react defensively. The reaction could be making
sarcastic remarks, being overly judgmental, or simply screening out
the unpleasant parts of the conversation

Overcoming Barriers to Effective Interpersonal

Communication
Right off the bat, offering feedback, the last step in the 2
communication process, will eliminate misunderstandings and
inaccuracies regarding the message being conveyed. The feedback
can be verbal or nonverbal. The best form of verbal feedback is a
quick restatement and summary of the message that has been
conveyed

There is a difference between hearing and actually listening. You 2

may hear what your manager is saying, but did you really listen?
Hearing is passive, and listening is a deliberate act of understanding
and responding to the words being heard. The first step to active
listening is listening for the total meaning

Defensiveness is one of the main barriers to effective 2

communication. By avoiding the tendency to criticize, argue, or
give advice, senders can avoid triggering defensive behavior.

Leaders will get the best results with and through their associates if 2
they…have a great attitude toward your associates, treat them fairly
and with respect; establish a climate of trust; include your
associates in as much decision making as possible, be sensitive to
cultural differences and learn more about their cultures, learn the
best ways to communicate, make sure that your associates know
what is expected of them, actively listen to them, and train them

Organizational Communication
Formal and Informal Communication
Formal communication is used by managers to communicate job 3
requirements to their employees. It follows the official chain of
command

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Informal communication does not follow a company’s chain of 3
command or structural hierarchy. The subject matter may be job
related but may not be essential to performing job duties.

Communication Flows and Networks

Upward communication takes place when managers or superiors 4
rely on their subordinates for receiving information. It flows
upward from employees to managers

Communication flowing down from supervisor to employee is 4

considered downward communication. Downward
communication is often used to inform, direct, coordinate, and
evaluate employees.

Communication that takes place between the employees of a 4

company who are on the same hierarchical level in the organization
is called lateral communication. This type of communication is
used by employees to discuss their environment and the
organization in general

Communication that takes place between employees who are on 4

different hierarchical levels and in different departments of the
organization is called diagonal communication.

Communication in a chain network flows according to the existing 4

chain of command of an organization. This includes downward as
well as upward communication flow. This type of network is highly
accurate; no information can be lost, and the path the message
travels is precise

The wheel network is a network in which communication flows 4

between a strong leader and each individual in a group or team;
they communicate solely with their leader

The all-channel communication network is differentiated from 4

others by its freely flowing communication between all members of
a group or team. This means that the leader communicates with
employees, and employees all communicate with each other.

The grapevine may be the most popular and important 4

communication network in an organization. One survey reported
that 75 percent of employees hear about matters first through
rumors on the grapevine. The grapevine is an informal
organizational communication network and an important source of
communication for the managers of an organization.

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The Decision-Making Process
Step 1: Identification and Definition of
Problem
Defining this problem is best done by writing a problem statement. 5
Once the problem has been accurately stated, it becomes easier to
move to the next step

Step 2: Identification of Decision Criteria

Once the problem has been identified and defined, we need to 5
determine the criteria relevant to the decision

Criteria that are not identified are usually treated as unimportant. 5

Step 3: Allocation of Weights to Criteria

To decision makers, decision criteria all have different levels of 5
importance. One method used to weigh the criteria is to give the
most important criterion a weight of 10 and then score the others
according to their relative importance

Step 4: Development of Alternatives

In developing alternatives, decision makers list the viable 5
alternatives that could resolve the problem. No attempt is made to
evaluate these alternatives—only to list them

Step 5: Analysis of Alternatives

The alternatives are analyzed using the criteria and weights 5
established in Steps 2 and 3.

Step 6: Selection of Alternative

Select the best alternative. Once the weighted scores for each 5
alternative have been totaled, it will become obvious which is the
best alternative.

Step 7: Implementation of Alternative

Ensure that the alternative is implemented so that the decision is 5
put into action. Sometimes good decisions fail because they are not
put into action

Step 8: Evaluation of Decision Effectiveness

The final step in the decision loop is to evaluate the effectiveness 5
of the decision. As a result of the decision, did we achieve the goals
we set? If the decision was not effective, then we must find out
why the desired results were not attained.

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How Managers Make Decisions
Managers are the main decision makers in any organization. 1
Although all employees face daily decisions, the choices a manager
makes impact the future of the organization. Decision making is an
integral part of all four primary managerial functions: planning,
organizing, leading, and controlling.

Making Decisions:
Rationality, Bounded Rationality, and Intuition
The first criterion for making a decision is that it must be rational. 6
Several assumptions are made to define what a rational decision
really is. First, the decision itself would have to maximize value
and be consistent within natural constraining limits. This means
that the choice made must maximize the organization’s profitability

One assumption of rationality as it relates to the decision maker is 6

that he or she is fully objective and logical

Bounded rationality means that managers make decisions based 6

on the decision-making process that is bounded, or limited, by an
individual’s ability to gain information and make decisions

When decision makers cannot find all of the necessary information 6

to analyze a problem and all of its possible alternatives, they find
themselves satisficing or accepting a solution that is just “good
enough” rather than maximizing.

Intuitive decision making is a subconscious process of making 6

decisions on the basis of experience and accumulated judgment.
Five different identified aspects of intuition comply with the
different types of decisions made. The first is a values- or ethics-
based decision. The second is an experience-based decision. Affect-
initiated decisions are those that are based on a manager’s
emotions and feelings. The fourth type is a cognitive-based
decision. Last, the manager may use his or her subconscious mind
to retain data and process it

Intuition and rationality are separate but are often used in 6

combination in most decision making. The two complement each
other to offer the manager an ideal solution for the decision-making
process.

Types of Problems and Decisions

The two major types of decisions are programmed decisions and 7
non-programmed decisions. A programmed decision involves

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situations that recur on a regular basis, allowing the response to be
a handled with a “programmed” response. In a programmed
decision, the response will occur on a repetitive basis. Programmed
decisions generally become a standard operating procedure.

A non-programmed decision is nonrecurring and made necessary 7

by unusual circumstances. The type of problem that induces a non-
programmed decision is a poorly structured problem. These types
of problems are usually new or unusual to the decision maker.
More often than not, the information on the problem is incomplete
or unavailable.

Decision-Making Conditions
The ideal situation for making a decision is one of certainty. A 8
decision of certainty includes knowing all of the alternatives and
therefore having no risk involved when making a decision, because
the outcome is known.

Making a decision that involves risk is one of the most common 8

situations. Here the decision maker is not certain of the outcome of
the situation. However, through personal experience, or a simple
“gut feeling,” she can estimate the probability of the outcome.

Uncertainty situations are characterized by having to make a 8

decision when the outcome is not certain and when reasonable
outcome estimates can’t be made either. These situations often
arise when alternatives to the decision are limited because of lack
of adequate information.

Decision-Making Styles
Decision makers differ in their way of thinking; some are rational 1, 6
and logical, whereas others are intuitive and creative. Rational
decision makers look at the information in order. They organize the
information and make sure it is logical and consistent.

Intuitive thinkers, on the other hand, can look at information that is 1, 6

not necessarily in order. They can make quick decisions based on
their spontaneous creativity and intuition.

The second dimension in which people differ is each 1, 6

individual’s tolerance for ambiguity. Managers who have a high
tolerance for ambiguity are lucky in that they save a lot of time
while making a decision. These individuals can process many
thoughts at the same time.

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Four major decision-making styles become evident: 1, 6
1. The directive style entails having a low tolerance for
ambiguity as well as being a rational thinker. Individuals
who fall into the category of having a directive decision-
making style are usually logical and very efficient.
2. Decision makers who have an analytic style of decision
making have a large tolerance for ambiguity. These people
require more information before making their decisions
and, consequently, they consider more alternatives
3. Decision makers who have a conceptual style of decision
making look at numerous alternatives and are typically very
broad in their outlook. Their focus is on the long run of the
decision made.
4. Decision makers who work well with others are said to
have a behavioral style of decision making. This entails
being receptive to suggestions and ideas from others as well
as being concerned about the achievements of their
employees

Decision makers often combine two or more styles to make a 1

decision. Most often a manager will have one dominant decision-
making style and use one or more other styles as alternates.

Sustainable Communication and Decision

Making
In order to successfully implement sustainable initiatives, it is
important to effectively communicate sustainable goals internally
to employees and investors, as well as to guests. Sustainable
initiatives are driven from within an organization through
employee encouragement and involvement. The decision to employ
sustainable practices is generally made from the top of an
organization; however, it must be supported by everyone in order
to prevail.

Because tourism heavily impacts local communities, it is important

to effectively communicate sustainable initiatives by fostering a
degree of participation from the local population. Some strategies
to involve the local population in tourism development include
training, meetings, workshops, special events, projects, and so on.
It is beneficial to harbor trust by creating relationships with local
communities, and considering their needs and concerns.

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Trends in Communication and Decision
Making
Current trends include:
• Maintaining a solid business reputation; public comments and
observations, both positive and negative, can be captured and
shared in real time to a global audience.
• Integrated marketing communications; remain consistent in
messaging across all communication channels.
• Ethics in the hospitality industry
• Employee satisfaction leads to guest satisfaction
• New decision making models; ALL staff must be able to make
decisions.
• Improved hospitality consumer insights; it is imperative that we
learn more about some of the choices individuals and groups
make.
• Divergent market segmentation; as each generational cohort
matures and their lifestyles evolve, their spending and travel
habits typically also start to change and the industry must react.
• Innovative technology; need to continue to invest in technology
to help improve the guest experience, but they must also make
smart investments

III. Teaching Techniques/Classroom Exercises

Note: The content of these exercises is such that they may also be used as essay
questions.

Exercise One:
Ask students to describe various distractions in the classroom. Which of these
distractions has more impact on how they pay attention in class? How can these
distractions be reduced in order to offer a more distraction free learning environment?

Exercise Two:
Ask the class to “Freeze!” Ask various students to identify and discuss their
perception of a classmates ‘body language.’

Exercise Three:
Ask students to describe various communication flow examples in their place of
employment or at school. Discuss examples of upward and downward communication,
lateral and diagonal communication.

Exercise Four:
Have students identify the last time they heard something through the ‘grapevine.’
What was the original message versus the actual fact? How closely were they aligned?

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Check Your Knowledge, p. 687
1) Question: What is the difference between interpersonal and organizational
communications?
Answer: Interpersonal communication is communication between two or more
people. Organizational communication includes all the different forms, networks,
and systems of communication that occur among individuals, groups, or
departments within an organization.

2) Question: What are three ways of communicating interpersonally?

Answer: Nonverbal communication is communication without words…gestures,
actions, and the type of clothes worn communicate messages to us. Body
language consists of facial expressions, gestures, and any other ways of
communicating a message with your body. Verbal intonation is using your voice
to emphasize certain parts of a phrase or certain words.

3) Question: Describe the interpersonal communication process.

Answer: The interpersonal communication process is made up of seven elements:
the sender, encoding, the message, the channel, the receiver, decoding, and
feedback.

Check Your Knowledge, p. 690

1) Question: Define semantics.
Answer: The actual meaning of words, or semantics, is the cause of many failed
communication efforts.

2) Question: Explain ambiguity as it relates to communication barriers.

Answer: Ambiguity, vagueness, or uncertainty can occur in a message being
conveyed. A message may be ambiguous, meaning the person receiving the
message is uncertain about the actual meaning

3) Question: What are three ways of overcoming communication barriers?

Answer: Using feedback, active listening, and avoid triggering defensiveness.

Check Your Knowledge, p. 693

1) Question: Define informal communication.
Answer: Informal communication does not follow a company’s chain of
command or structural hierarchy. The subject matter may be job related but may
not be essential to performing job duties.

2) Question: What is the difference between lateral and diagonal communication?

Answer: Communication that takes place between the employees of a company
who are on the same hierarchical level in the organization is called lateral
communication. Communication that takes place between employees who are on

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 different hierarchical levels and in different departments of the organization is
called diagonal communication.

3) Question: Elaborate on the wheel communication network.

Answer: The wheel network is a network in which communication flows between
a strong leader and each individual in a group or team; they communicate solely
with their leader

Check Your Knowledge, p. 702

1) Question: List criteria for making a rational decision.
Answer: First, the decision itself would have to maximize value and be consistent
within natural constraining limits. The manager making the decision must pursue
the organization’s values and profitability. The goals must be clearly stated.

2) Question: Give an example of satificing.

Answer: Satisficing is accepting a solution that is just “good enough” rather than
maximizing.

3) Question: What are the five aspects of intuition?

Answer: Values or ethics-based decisions, experience-based decisions, affect-
initiated decisions, cognitive-based decisions, and finally using retained or stored
data in the subconscious.

Check Your Knowledge, p. 708

1) Question: Name the two dimensions of decision-making styles.
Answer: The first is the difference between the rational and logical and the
intuitive thinkers. The second is how people differ in their tolerance for
ambiguity.

2) Question: Briefly describe the conceptual style of decision making.

Answer: Decision makers who have a conceptual style of decision making look
at numerous alternatives and are typically very broad in their outlook. Their focus
is on the long run of the decision made.

IV. Answers to Chapter 17 Review Questions

1) Managers are the main decision makers in any organization. Although all employees
face daily decisions, the choices a manager makes impact the future of the
organization. Decision making is an integral part of all four primary managerial
functions: planning, organizing, leading, and controlling.

2) Every student, like every manager will answer this differently. Intuitive decision
making is a subconscious process of making decisions on the basis of experience and

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 accumulated judgment. The assumption of rationality as it relates to the decision
maker is that he or she is fully objective and logical.

3) You can disagree with something even though you fully understand it. The process
has not necessarily failed.

4) The grapevine may be the most popular and important communication network in an
organization. One survey reported that 75 percent of employees hear about matters
first through rumors on the grapevine. The grapevine is an informal organizational
communication network and an important source of communication for the managers
of an organization.

5) Everybody perceives things differently. This is due to different backgrounds,

upbringing, personal experiences, and major influences in their lives. No two people
are alike, and neither is their perception.

V. Mini-Case Discussion Question Answer

1) Student answers will vary. Some suggestions may be:
a) Stagger the start times for housekeeping to minimize impact on elevators
b) Does room service need to have an elevator blocked at this time of the day?
Research and initiate a method to deliver room service orders without
dramatically impacting hotel guests.
c) Stagger housekeeping breaks to minimize guest impact.

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