ELISHBA'S POST ON CHAPTER 6 (DECISION MAKING: THE ESSENCE OF THE MANAGER'S JOB

DECISION: THAT IS, THEY MAKE CHOICES. FOR INSTANCE, TOP-LEVEL MANAGERS MAKE DECISIONS ABOUT THEIR ORGANIZATIONS GOALS.

DECISION-MAKING PROCESS: A SET OF EIGHT STEPS THAT BEINGS WITH INDENTIFYING A PROBLEM AND DECISION CRITERIA AND ALLOCATING WEIGHTS TO THOSE CRITERIA ; TH ATS MOVES TO DEVELOPING, ANALYZING, AND SELECTING AN ALTERNATIVE THAT CAN RESOLVE THE PROBLEM; IMPLEMENTING THE ALTERNATIVES; THAT CONCLUDES WITH EVALUATING THE DECISION'S EFFECTIVENESS.

THE MANAGER AS DECISION MAKER: DECISION MAKING IS PARTICULARLY IMPORTANT INA MANAGER'S JOB. DECISION MAKING IS PART OF ALL FOUR MANAGERIAL FUNCTIONS. IN FACT, THAT'S WHY WE SAY THAT DECISION MAKING IS THE ESSENCE OF MANAGEMENT. THAT'S WHY MANAGERS- WHEN THEY PLAN, ORGANIZE, LEAD, AND CONTROL- ARE CALLED DECISION MAKERS.

MAKING DECISIONS: RATIONALITY, BOUNDED RATIONALITY, AND INTUITION

1. RATIONALITY: MANAGERS MAKE CONSISTENT VALUE-MAXIMIZING CHOICES WITHIN SPECIFIED CONSTRAINTS.

2. BOUNDED RATIONALITY: DECISION-MAKING BEHAVIOUR THAT'S RATIONAL, BUT LIMITED BY AN INDIVIDUALS, ABILITY TO PROCESS INFORMATION.

3. ROLE OF INTUITION: MAKING DECISIONS ON THE BASIS OF EXPERIENCE, FEELINGS, AND ACCUMULATED JUDGMENT.

TYPES OF PROBLEMS AND DECISIONS

• STRUCTURED PROBLEMS: WHICH ARE STRAIGHTFORWARD, FAMILIAR, AND EASILY DEFINED.



• PROGRAMMED DECISIONS: A REPETITIVE DECISION THAT CAN BE HANDLED BY A ROUTINE APPROACH.



• UNSTRUCTURED PROBLEMS: PROBLEMS THAT ARE NEW OR UNUSUAL AND FOR WHICH INFORMATION IS AMBIGUOUS OR INCOMPLETE.


• NON PROGRAMED DECISIONS: A UNIQUE DECISION THAT REQUIRES A CUSTOM-MADE SOLUTION.

DECISION-MAKING CONDITIONS

• CERTAINTY: A SITUATION IN WHICH A MANAGER CAN MAKE ACCURATE DECISIONS BECAUSE ALL OUTCOMES ARE KNOWN.


• RISK: A SITUATION IN WHICH THE DECISION MAKER IS ABLE TO ESTIMATE THE LIKELIHOOD OF CERTAIN OUTCOMES.


• UNCERTAINTY: A SITUATION IN WHICH A DECISION MAKER HAS NEITHER CERTAINTY NOT REASONABLE PROBABILITY ESTIMATES AVAILABLE.

DECISION-MAKING STYLES

• DIRECTIVE STYLE: A DECISION -MAKING STYLE CHARACTERIZED BY LOW TOLERANCE FOR AMBIGUITY AND A RATIONAL WAY OF THINKING.


• ANALYTIC STYLE: A DECISION-MAKING STYLE CHARACTERIZED BY A HIGH TOLERANCE FOR AMBIGUITY AND A RATIONAL WAY OF THINKING.


• CONCEPTUAL STYLE: A DECISION-MAKING STYLE CHARACTERIZED BY A HIGH TOLERANCE FOR AMBIGUITY AND AN INTUITIVE WAY OF THINKING.


• BEHAVIORAL STYLE: A DECISION-MAKING STYLE CHARACTERIZED BY A LOW TOLERANCE FOR AMBIGUITY AND AN INTUITIVE WAY OF THINKING.