Administrative Model

Decisioin making describes how managers actually make decisions in difficult sitionations like those of non prgrammed decisions, uncertainty, and ambiguity.

Focuses on organizational factors that influence indivdual decisions.

Descriptive describes how to make decisions

 1. Decision goals are vague, confidentiality and lack of consensus

2. Rational procedures are not always used, when they are used they have a simple view of the problem

3. Search for alternatives is limited because of human, information, and resource constraints

4. Managers settle for staticificing

Intution

Quick apprehension of decision situation based on past experience but without conscious thought

Political Model

Most useful for non programmed decisions:

1. Organization are made of groups with diverse interests/goals

2. information is ambiguous/incomplete

3. Managers do not have time to idenify all a problem'd imensions

4. Mangers engage in the debate to discuss the alternative

Effective Decision Process

1. Recognition of decision required

2. Diagnosis and analysis of cause

3. Develop alternatives

4. Select deseired alternative

5. Impliment decision

6. Evaluate and feedback

Problem

Organizational accomplishment is less than established goals.

Opportunity

When mangers see potential accomplishment that exceeds current goals.

Diagnosis

Analyize casual factors

Questions:

What is the state affecting us?

When? Where? How? And to whom did it occur?

Urgency?

Interconnectedness of events?

Result came from activity?

Risk propensity

Willingness to undertake risk with the opportunity for increased profit/payoff.

Implimentation

This stage involves the use of managerial/administrative, persuasive abilities to put decisions or chosen alternatives into action.

The three Decision Styles

1. Directive

2. Analytical

3.Conceptual

Directive Style (decision making)

Used by people who prefer simple, clear cut solutions to problems, who make decision quickly because they do not like a lot of information, and may consider only one or two alternatives.

Analytical Style (of decision making)

People who like to consider complex solutions based on as much data as they can gather.

Decisions are from objective, rational data from management control systems

Conceptual Sytle (of decision making)

Likes to consider a broad amount of information; more socially oriented and like to talk to others about problems.

Behavorial Style (of decision making)

Done by managers that have a deep concern for others.

Talk to people one on one to understand their feelings.

Vroom Jago Model

Model to help managers guage the amount of subordinate participation in decision making.

Spectrum ranges from Total Influenced by leader to freedom by group

Leaders Decides, Consult individula, Consult group, facilitate (a grp meeting), Delegate.

To decide which decision style to use...ask these questions

- Decision significance

- Importance of commitment

- Leader Expertise

-Likelihood of commitment

-Group support for Goals

-Group Expertise

- Team competence

Escalating Commitment

Manager block/ distort negative info becasue they dont want to be responsible four a bad decision.

So they continue to invest time and resources in a failing decision.

Five whys

The 5 whys are improve how people think about the problems and generate alternatives for solving them.

Ask "why" 5 times

Devils advocate

Person with the role of cahallenging assumptions and assertions made by the group.

Point- counter Point

Break room into groups, people are assigned to express competing points of view.

Decision making

Process of identifying problems and opportunities and then resolving them.

Decision

A choice made from available alternatives.

Programmed decisions

Involve situations that have occurred often enough to engage decisions rules that are developed and applied in the future in response to reoccuring organizational problems

Non programmed Decisions

Decisions that are made in response to situations that are unique, are poorly defined, and are largly unstructure, and have important consequences.

Difference between programmed and non programmed decisions --> degree or certainty or uncertainty

Certainity

All the information the decision maker needs is fully available.

Information on: Operating conditions, resource costs/ constraints to each possible outcome/ each course of action

Risk

Decision has clear cut goasl and that good information is available but the future outcomes associated with each alternative are subject to change

Ex. Saturn's mid sized car to compete with Accord and Camry.

Uncertainity

Managers know which goals they wish to achieve but information about alternatives and future events is incomplete.

The following are difficult to analyize/predict: price, production cost, volume, and future interest rate

Ambiguity

Most difficult decision situation. Goals/problem to be solved are unclear. Alternatives are difficult to define and information about outcomes is unavailable.

Classical Model

The decision making is based on economic assumptions.

- decision maker operates to accomplish goals that are known and agreed upon

- decision maker strives for certainty

- criteria to evaluate the alternatives are known

Classic model is normative (how decisions should be made).

Bounded Rationality

 Means that people have limits or boundaries on how rational they can be.

Satisficing

Decision makers must choose the 1st solution alternative that satisfies minimal decision criteria