vs ‘When managers at stapler-maker Swingline saw the company’s marketshare declining, they used a logical scientific approach to address the issue. For three years, they exhaustively researched stapler users before deciding what new products to develop. However, at Accen- tra, Inc., founder Todd Moses used a more intuitive decision approach to come up with his line of unique Paper?ro staplers!" Like Todd Moses, managers often use their intuition to help their decision making. What is intuitive decision making? It's making decisions on the basis of experience, feelings, and accumulated judgment. Researchers studying managers" use of intuitive decision making have identified five different aspects of intuition, which are described in Exhibit 7-6.4 How common is intuitive decision making? One survey found that almost half of the executives surveyed “used intuition more often than formal analysis to run their companies." What Is Intuition? *Explicit knowledge: That exist in the portified form “Tactic knowledge: eam through experience Subconscious! montal processing Se tees ease —— ‘Scanned with CamSeannerSuppose you were exhibiting sume stange, puzzling physical syinpt det tw make the best decisions about proper diagnosis and treatment, wouldn’t you want your doctor to base her decisions on the best available evidence? Now suppose that you're a manager faced with putting together an employee recognition program. Wouldn't you want those decisions also to be based on the best available evidence? “Any decision- making process is likely to be enhanced through the use of relevant and reliable evidence, whether it’s buying someone a birthday present or wondering which new wash- ing machine to buy.""* That’s the premise behind evidence-based management (EBNIgt), which is the “systematic use of the best available evidence to improve man- agement practice" EBMgt is quite relevant to managerial decision making, The four essential elements of EBMgyt are the decision maker's expertise and judgment; external evidence that’s been eval- uated by the decision maker; opinions, preferences, and values of those who have a stake in the decision; and relevant organizational (internal) factors such as context, circumstances, and ‘organizational members. The strength or influence of each of these elements on a decision will vary with each decision. Sometimes, the decision makers intition (uudement) might he «given greater emphasis in the decision; other times it might be the opinions of stakeholders; and at other times, it might be ethical considerations (organizational context), The key for ‘managers isto eeognize and understand the mindful, conscious choice as to which element(s) ‘are most important and should be emphasized in making a decision. Types of Decisions and Decision-Making Conditions Restaurant managers in New York City make routine decisions weekly about purchasing food supplies and scheduling employee work shifts. Its something they've done numerous times, But now they're facinga different kind of decision—one they've never encountered — how to adapt to the new law requiring that nutritional information be posted. Just read LEARNING OUTCOME ‘Classty decisions ond ‘decision-making concitions. ‘Scanned with CamSeannerTypes of Decisions and Decision-Making Te | Conditions ‘Classify decisions ond Restaurant managers in New York City make routine decisions weekly about purchasing S008O"-alng condone. food supplies and scheduling employee work shifts. ICs something they've done numerous times. But now they're facing a different kind of decision—one they've never encountered — hhow to adapt to the new law requiring that nutritional information be posted. ‘Types of Decisions ‘Such situations aren’t all that unusual. Managers in all kinds of organizations face different types of problems and decisions as they do their jobs. Depending on the nature of the prob- lem, a manager ean use one of two different types of de ‘VSinucTunED PROBLEMS AND! PROGRAMMED DECISIONS: Some: problems are straightfornard. The decision maker gol is clay, the problem fair and informe Sion about the problem is easly defined and somplete; Examples might include when a eRe nee Intuitive decision making Gurmicessecr ener {EBMat) 186 PART THREE | PLANNING customer returns a purchase to a store, when a supplier is late with an important delivery, a rnews team’ response toa fast-breaking event, ora college's handling ofa student wanting to drop a class. Such situations are called structured problems hecause they're straight- ‘Scanned with CamSeanneeART THREE | PLANNING customer returns a purchase ta store, when a suppliers late with an important delivery. a rows tam's response toa fast breaking event, ora collage’: handling ofa student wanting to drop a class, Such sisations are called structured problems because they're straight: forward, familiar, and easily defined. For instance, a server spill a drink ona customer's coal, The customer is upset and the manager needs toda something. Because i not an unusual occurrence, ther’ probably some standardized routine for handing it. For exam: ple, the manager offers to have the Cat eleaned at the restaurant's exponse. Ths What We call a programmed decision, a repetitive decision that can be handled by a routine approach, Because the problem i structured, the manager doesn't have to go to the wouble and expense of going through an involved decision process. The “develop the-alteratives™ stage of the decision-making process either doesn't exis or is given litle attention. Why? Because once the structured problem is defined the solution is usually self-evident or at least reduced to afew alternatives that are familiar and have proved successful in the past. “The spilled drink on the customer's coat doesn't require the restaurant manager to identify and weight decision criteria. orto develop along lis of possible solutions. Instead [NEM RE TERES OTE OT HESS Types wT propia eT Oe prONEaE, Tne OTH =a procedure is a series of sequential steps a manager uses to respond to a structured RR AT AY I OP SENET TOURER For instance, a purchasing manager receives 2 request for a warehouse manager for 15 PDA handel for the inventory clerks. The purchasing manager knows bow to make this ‘decision by following the established purchasing procedure. ay are frequently used because they're simple to follow and ensure consistency. For example, rules about lateness and absentcism permit supervisors to make disciplinary decisions rap ily and fly The third type of programmed decisions is a policy, which is a guideline for making a in contrast to a rule, OH eStsDliaies pol SIRNAS Foe IS GEC SLES fate than specifiy stating wat should or sould note done. Policies typicllyconsin fm ambiganus tem at eves nerprttion up othe deision ma Here sme san- ple pole Satem=ns Example » Thecsomer aay comes first and should always be stig > We promowe fom within, whenever port. > Employee wages sallbe compote within community sandals or compete pay package [itice that he terms satisfied, menever possible, nd compete ee inept. For instance the pole of paying compete wages dos tl a company’s hanian resources — “— “ “Scanned with CamSeannerns Notice that the terms satisfied, whenever possible, and competitive require interpretation. For instance, the policy of paying competitive wages doesn’t tell a company’s human resources ‘manager the exact amount he or she should pay, but it does guide them in making the decision. Not all the problems ‘managers face can be solved using programmed decisions. Many organizational situations involve unstructured problems, which are problems that are new or unusual and for wich So, too, is the problem facing restaurant ‘managers in New York City who must decide how to modify their businesses to comply with the new law. When problems are unstructured, managers must rely on nonprogrammed deci- sion making in order to develop unique solutions. Nonprogrammed decisions 'are unique eNOS 7-1 describes the differences between programmed and nonprogrammed di sions. Lower-level managers mostly rely on programmed decisions (procedures, rules, and policies) because they confront familiar and repetitive problems. As managers move up the organizational hierarchy, the problems they confront become more unstructured. Why? Because lower-level managers handle the routine decisions and let upper-level managers deal with the unusual or difficult decisions. Also, upper-level managers delegate routine decisions to their subordinates so they can deal with more difficult issues." Thus, few man- agerial decisions in the real world are either fully programmed or nonprogrammed. Most fall somewhere in between. ctivate Win ‘Scanned with CamSeanner