4.

1

LEARNING OBJECTIVES
• EVALUATE SCHOOLS OF
MANAGEMENT THINKING
• DESCRIBE LEVELS, TYPES, STAGES
OF DECISION MAKING
• COMPARE INDIVIDUAL &
ORGANIZATIONAL DECISION MAKING
*
4.2

3 .LEARNING OBJECTIVES • ASSESS CHANGING MANAGEMENT PROCESS • EXPLAIN HOW INFO SYSTEMS AID MANAGERS & DECISION MAKING * 4.

MANAGEMENT CHALLENGES • • • WHAT MANAGERS DO INTRODUCTION TO DECISION MAKING INDIVIDUAL MODELS OF DECISION MAKING • HOW INFORMATION TECHNOLOGY HAS CHANGED MANAGEMENT PROCESS * 4.4 .

THREE MANAGEMENT THEORIES • TECHNICAL .RATIONAL “Classical” • BEHAVIORAL • COGNITIVE * 4.5 .

THREE MANAGEMENT THEORIES TECHNICAL .RATIONAL “Classical”: • EMPHASIZES PRECISION OF TASK • ORGANIZES TASKS INTO JOBS • ORGANIZES JOBS INTO PRODUCTION SYSTEMS * 4.6 .

7 . INTERNAL ENVIRONMENT * 4.THREE MANAGEMENT THEORIES BEHAVIORAL: • EMPHASIZES ORGANIZATION’S ADAPTATION TO EXTERNAL.

THREE MANAGEMENT THEORIES COGNITIVE: • EMPHASIZES LEARNING & APPLYING KNOW-HOW.8 . KNOWLEDGE • HOW WELL MANAGERS PROVIDE MEANING TO NEW SITUATIONS * 4.

9 CLASSICAL (1880-1927) CONTEMPORARY (1930-1962) POSTMODERN (1965 .present) * .EVOLUTION OF MANAGEMENT THEORY • • • 4.

10 . organizing. deciding. coordinating. controlling * 4.CLASSICAL PERIOD: • • • TECHNICAL-RATIONAL VIEW TIME & MOTION STUDIES SCIENTIFIC MANAGEMENT Planning.

12 SOCIAL PSYCHOLOGISTS SOCIOLOGISTS ORGANIZATIONAL BEHAVIORISTS Emphasized individual collective behavior * .CONTEMPORARY PERIOD: • • • 4.

12 ECONOMISTS SOCIOLOGISTS MANAGEMENT THEORISTS Emphasizes knowledge basis of organizations * .POSTMODERN PERIOD: • • • 4.

hearsay. gossip Complex web of interactions. fragmentation. high-speed work Variety. contacts Prefer verbal media Control agenda * 4. brevity Speculation.BEHAVIORAL MODEL OF MANAGEMENT: High-volume.13 .

MANAGERIAL ROLES (Mintzberg): Interpersonal: figureheads & leaders Informational: receive. handle disturbances. allocate resources. negotiate conflicts * 4. disseminate critical info Decisional: initiate activities.14 .

Wrapp’s SUCCESSFUL MANAGER: GENERAL MANAGER OPERATING DECISIONS CORPORATE STRATEGY 4.15 OPERATING PROBLEMS .

& knowledge processing infrastructure • Two schools * 4.16 .COGNITIVE PERSPECTIVE ORGANIZATION: • Is knowing. sentient organism • Can “learn” & “know” • Success depends on learning.

MANAGERIAL SENSE-MAKING: MANAGERS: • Create mental maps • Are problem solvers. decision makers • Are information processors • Create & support information processing * 4.1.17 .

know-how. skills • Change based on new information • Firm creates value by integrating specialized knowledge • Strategy: Develop core competencies * 4.2. Tacit (know-how) Includes information. social relations.18 . KNOWLEDGE-BASED VIEW OF FIRM: KNOWLEDGE: • • • Central productive / strategic asset Explicit (codified).

LEVELS OF DECISION MAKING • STRATEGIC: Long-term objectives. knowledge • OPERATIONAL: How to carry out specific day-to-day tasks * 4. policies • MANAGEMENT CONTROL: Monitor use of resources. performance • KNOWLEDGE-LEVEL: Evaluate potential innovations. resources.19 .

risk • UNSTRUCTURED: Unique.TYPES OF DECISIONS • STRUCTURED: Repetitive. definite procedure. non-routine. requires judgment * 4. uncertainty. routine. certainty • SEMISTRUCTURED: One or more factors not structured.20 .

21 STRATEGIC ACCOUNTS RECEIVABLE TPS UNSTRUCTURED MANAGEMENT PRODUCT DESIGN FACILITY LOCATION ESS NEW PRODUCTS NEW MARKETS . DECISIONS ORGANIZATIONAL LEVEL TYPE OF DECISION STRUCTURED OPERATIONAL KNOWLEDGE ELECTRONIC SCHEDULING OAS SEMISTRUCTURED PRODUCTION COST OVERRUNS MIS BUDGET PREPARATION PROJECT SCHEDULING DSS KWS 4. LEVELS.INFO SYSTEMS.

The New Science of Management Decision (1960) . select criteria • CHOICE: Use criteria to evaluate alternatives. select • IMPLEMENTATION: Put decision into effect. identify problem • DESIGN: Conceive alternatives. allocate resources.STAGES OF DECISION MAKING • INTELLIGENCE: Collect information.22 SOURCE: Simon. control * 4.

23 . evaluate all alternatives • SATISFICING: Bounded rationality. marginal changes • PSYCHOLOGICAL: Cognitive types.INDIVIDUAL MODELS OF DECISION MAKING • RATIONAL: Comprehensive rationality. choose first “good” alternative • MUDDLING: Successive comparison. manages differ in how they make choices * 4.

ORGANIZATIONAL MODELS OF DECISION MAKING • RATIONAL ACTOR: Maximize organization’s benefits • BUREAUCRATIC: Follow standard operating procedures (SOP) • POLITICAL: Key groups compete and bargain • “GARBAGE CAN”: Organizations not rational. solutions accidental * 4.24 .

25 .Connect to the INTERNET PRESS LEFT MOUSE BUTTON ON ICON TO CONNECT TO THE LAUDON & LAUDON WEB SITE FOR MORE INFORMATION ON THIS CHAPTER 4.

4.26 .