Professional Documents
Culture Documents
to Accompany Chapter 7 of
Management
Canadian Edition
Schermerhorn Wright
Management - Chapter 7 4
Study Question 1: How is information
technology changing the workplace?
Electronic commerce.
The process of buying and selling goods and services
electronically through use of the Internet.
B2C e-commerce.
B2B e-commerce.
Stages of development in e-commerce:
Secure an online identity.
Establish a Web presence.
Enable e-commerce.
Provide e-commerce and customer relationship management.
Utilize a service application model.
Management - Chapter 7 5
Study Question 1: How is information
technology changing the workplace?
Management - Chapter 7 6
Figure 7.1 Information technology is
breaking barriers and changing organizations.
Management - Chapter 7 7
Study Question 1: How is information
technology changing the workplace?
Management - Chapter 7 9
Study Question 2: What is the role of
information in the management process?
What is useful information?
Data.
Raw facts and observations.
Information.
Data made useful for decision making.
Information drives management functions.
Characteristics of useful information:
Timely.
High quality.
Complete.
Relevant.
Understandable.
Management - Chapter 7 10
Study Question 2: What is the role of
information in the management process?
Management - Chapter 7 11
Figure 7.2 External and internal
information needs of organizations.
Management - Chapter 7 12
Study Question 2: What is the role of
information in the management process?
Management - Chapter 7 13
Study Question 2: What is the role of
information in the management process?
Management - Chapter 7 14
Study Question 2: What is the role of
information in the management process?
Management - Chapter 7 15
Study Question 2: What is the role of
information in the management process?
Basic information system concepts (cont.):
Intranets and corporate portals.
Allow employees, by password access, to share databases and
communicate electronically.
Extranets and enterprise portals.
Allow communication and data sharing between the
organization and the external environment.
Electronic data interchange (EDI).
Uses controlled access to enterprise portals and supporting
software to enable electronic transactions between businesses.
Management - Chapter 7 16
Study Question 2: What is the role of
information in the management process?
Management - Chapter 7 17
Study Question 2: What is the role of
information in the management process?
Managerial advantages of IT utilization
(cont.):
Leading advantages.
Improved communication with staff and
stakeholders.
Keeping objectives clear.
Controlling advantages.
More immediate measures of performance results.
Allows real-time solutions to performance problems.
Management - Chapter 7 18
Figure 7.3 The manager as an
information-processing nerve center.
Management - Chapter 7 19
Study Question 3: How do managers use
information to make decisions?
A performance deficiency is
Actual performance being less than desired
performance.
A performance opportunity is
Actual performance being better than desired
performance.
Problem solving is
The process of identifying a discrepancy between actual
and desired performance and taking action to resolve it.
A decision is
A choice among possible alternative course of action.
Management - Chapter 7 20
Study Question 3: How do managers use
information to make decisions?
Programmed decisions.
Apply solutions that are readily available from
past experiences to solve structured problems.
Structured problems are ones that are familiar,
straightforward, and clear with respect to
information needs.
Best applied to routine problems that can be
anticipated.
Management - Chapter 7 21
Study Question 3: How do managers use
information to make decisions?
Nonprogrammed decisions.
Develop novel solutions to meet the demands
of unique situation that present unstructured
problems.
Unstructured problems are ones that are full of
ambiguities and information deficiencies.
Commonly faced by higher-level management.
Management - Chapter 7 22
Study Question 3: How do managers use
information to make decisions?
Crisis decision making.
A crisis involves an unexpected problem that can lead
to disaster if not resolved quickly and appropriately.
Rules for crisis management:
Figure out what is going on.
Remember that speed matters.
Remember that slow counts, too.
Respect the danger of the unfamiliar.
Value the skeptic.
Be ready to fight fire with fire.
Management - Chapter 7 23
Study Question 3: How do managers use
information to make decisions?
Decision environments:
Certain environments.
Offer complete information about possible action alternatives
and their outcomes.
Risk environments.
Lack complete information about action alternatives and their
consequences, but offer some estimates of probabilities of
outcomes for possible action alternatives.
Uncertain environments
Information is so poor that probabilities cannot be assigned to
likely outcomes of known action alternatives.
Management - Chapter 7 24
Figure 7.4 Three environments for managerial decision
making and problem solving.
Management - Chapter 7 25
Study Question 3: How do managers use
information to make decisions?
Problem-solving styles:
Problem avoiders.
Inactive in information gathering and solving
problems.
Problem solvers.
Reactive in gathering information and solving
problems.
Problem seekers.
Proactive in anticipating problems and opportunities
and taking appropriate action to gain an advantage.
Management - Chapter 7 26
Study Question 3: How do managers use
information to make decisions?
Systematic versus intuitive thinking.
Systematic thinking approaches problems in a rational,
step-by-step, and analytical fashion.
Intuitive thinking approaches problems in a flexible and
spontaneous fashion.
Multidimensional thinking applies both intuitive and
systematic thinking.
Effective multidimensional thinking requires skill at
strategic opportunism.
Management - Chapter 7 27
Study Question 4: What are the steps in the
decision-making process?
Management - Chapter 7 28
Figure 7.5 Steps in managerial decision
making and problem solving.
Management - Chapter 7 29
Study Question 4: What are the steps in the
decision-making process?
Management - Chapter 7 30
Study Question 4: What are the steps in the
decision-making process?
Step 2 generate and evaluate possible
solutions.
Potential solutions are formulated and more
information is gathered, data are analyzed , the
advantages and disadvantages of alternative
solutions are identified
Approaches for evaluating alternatives:
Stakeholder analysis.
Cost-benefit analysis.
Management - Chapter 7 31
Study Question 4: What are the steps in the
decision-making process?
Step 2 generate and evaluate possible solutions
(cont.).
Criteria for evaluating alternatives:
Benefits.
Costs.
Timeliness.
Acceptability.
Ethical soundness.
Common mistakes:
Selecting a particular solution too quickly.
Choosing a convenient alternative that may have damaging
side effects or may not be as good as other alternatives.
Management - Chapter 7 32
Study Question 4: What are the steps in the
decision-making process?
Management - Chapter 7 33
Study Question 4: What are the steps in the
decision-making process?
Step 3 decide on a preferred course of
action (cont.).
Behavioral decision model
Managers act in terms of what they perceive about a
given situation.
Recognizes limits to human information-processing
capabilities.
Cognitive limitations.
Bounded rationality.
Results in a satisficing decision.
Management - Chapter 7 34
Study Question 4: What are the steps in the
decision-making process?
Management - Chapter 7 35
Figure 7.6 Differences in the classical and behavioral
models of managerial decision making.
Management - Chapter 7 36
Study Question 4: What are the steps in the
decision-making process?
Step 5 evaluate results.
Involves comparing actual and desired results.
Positive and negative consequences of chosen
course of action should be examined.
If actual results fall short of desired results, the
manager returns to earlier steps in the decision-
making process.
Management - Chapter 7 37
Study Question 5: What are the current issues
in managerial decision making?
Types of heuristics for simplifying decision
making:
Availability heuristic.
People use information readily available from memory as a
basis for assessing a current event or situation.
Representativeness heuristic.
People assess the likelihood of something happening based
upon its similarity to a stereotyped set of occurrences.
Anchoring and adjustment heuristic.
People make decisions based on adjustments to a previously
existing value or starting point.
Management - Chapter 7 38
Study Question 5: What are the current issues
in managerial decision making?
Escalating commitment.
The tendency to increase effort and apply more
resources to a course of action that is not working.
Ways to avoid the escalation trap:
Set advance limits and stick to them.
Make your own decisions.
Carefully determine why you are continuing a course of
action.
Remind yourself of the costs.
Watch for escalation tendencies.
Management - Chapter 7 39
Study Question 5: What are the current issues
in managerial decision making?
Potential advantages of group decision
making:
Greater amounts of information, knowledge,
and expertise are available.
More action alternatives are considered.
Increased understanding and acceptance of
outcomes.
Increased commitment to implement final
plans.
Management - Chapter 7 40
Study Question 5: What are the current issues
in managerial decision making?
Management - Chapter 7 41
Study Question 5: What are the current issues
in managerial decision making?
Ethical decision making.
Any decision should meet ethics double
check. mentioned in step 3 of the decision-
making process.
How would I feel if my family found out about this
decision?
How would I feel if this decision were published in
the local newspaper?
Any discomfort in answering these questions
indicates the decision has ethical shortcomings.
Management - Chapter 7 42
Study Question 5: What are the current issues
in managerial decision making?
Ethical decision making (cont.).
Considering the ethics of a proposed decision
may result in better decisions and prevention of
costly litigation.
Ethical decisions satisfy the following criteria:
Utility.
Rights.
Justice.
Caring.
Management - Chapter 7 43
Study Question 5: What are the current issues
in managerial decision making?
Knowledge management.
Processes through which organizations develop,
organize, and share knowledge to achieve competitive
advantage.
Chief Knowledge Officer (CKO)
Energizes learning processes.
Manages and enhances organizations intellectual
assets.
Knowledge management requires a culture that
values learning fosters a learning organization.
Management - Chapter 7 44
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