Key Topics
Introduction
Decision Styles
A discussion on Group Decisions
Part I Introduction
Organizations
Organizations are systems
Managers
Managers are responsible for effective and efficient execution of these organizational functions. A typical manager performs a number of functions that are categorized as: Interpersonal Informational
Decisional
Managers
One of the key traits that distinguish managers from operatives is the ability to make independent decisions.
Part II Decision-making
What is decision-making?
The word decision is defined as:
Decision-making Process
Identifying a problem
Problem Definition
Problem is a discrepancy (difference) between an existing and a desired state. Example: The manager has resigned, and we need another manager Here the phrase manager has resigned reflects the current state while need another manager represents a desired state.
Communication skills
Planning and analytical skills
Professional experience
Developing Alternatives
Involves defining the possible alternatives (or choices) that would resolve the problem. In our case, the alternatives would be a list of candidates or job applicants.
Analyzing Alternatives
Alternatives are rated and analyzed on the basis of the criteria The rating can be based on a specified scale, say 1 5 etc.
Rating may be subjective in nature and thus,may depend on the judgment of the individual(s)
CANDIDATES RATING AND ASSESSMENT Candidate Kamran Ashraf Rahila Mushtaq Tasaduq Hussain Zubair Ahmed Maliha Javed Qualification 3 2 4 2 4 Leadership 3 1 2 5 5 Communication 3 4 3 2 4 Analysis 1 2 2 4 3 Experience 1 2 3 1 2
Selecting an alternative
Involves choosing the best alternative, based on the above rating and analysis Generally implies selecting the alternative with the highest score.
Involves clear communication of the decision to all concerned and obtaining their commitment
Evaluation
Evaluation forms an integral part of any process Involves evaluation of the outcome based on the desired goal and criteria
Involves assessing the effectiveness and efficiency of the outcome (or the entire process)
In case of any undesired results, each step of the process is carefully reviewed to trace the root causes
Decision-making Models
Model
Rational/Bounded Rational
So Rational and Bounded Rational Models are cognitive models that describe how managers make rational decisions
2. Set goals
3. Search for alternative solutions
6. Implement the solution selected 5. Choose 4. Compare among and evaluate alternative solution solutions
Intuition
An unconscious process of making decisions on the basis of experience and judgment
Intuition
Involves gut feeling
Decision Types
Effective managers make various kinds of decisions. In general, these decisions are either Programmed decisions
Non-programmed decisions
Programmed Decisions
A decision that is repetitive and routine
Non-programmed Decisions
A decision that is novel (new or unique) or Ill structured No established methods exist, because it has never occurred before or because It is too complex
Non-programmed Decisions
Organizational
Levels
Nature of Problems
Nature of Decision-making
Non-programmed Decisions
Are tough decisions that involve risk and uncertainty and call for entrepreneurial abilities Such decisions draw heavily on the analytical abilities of the manager Examples: Moving into a new market, investing in a new unproven technology, changing strategic direction
Decision Styles
Decision-making, though a rational process does include some subjective elements Thus in real organizational settings, the quality of decision does depend on the ability, style and approach of the manager
AI
The decision is made individually, using the information available to the individual only
The manager obtains information from subordinates and himself makes the decision May or may not share with subordinates, the purpose of questions or the nature of problem
Subordinates do not play any role in problem definition or selection of alternatives
CI
The manager shares the problem with relevant subordinates individually
Getting their input individually and not as a group. The manager then makes the decision independently, and may or may not be influenced by the subordinates suggestions
GI
The problem is shared to subordinates as a group Alternatives are generated and evaluated collectively
Group Decision-making
The factors requiring group decisions include: Involving sensitive issues High cost alternatives Involving very high risk factor Strategic impact
Coordination is easier
Communication is easier Existence of large alternatives More information can be processed Diversity of experience and perspectives
Unimportant to group
Manager can take decision
Incapability of members
Managers dominance
Data collection
Importance of acceptance
Importance of solution
Complex problem Democratic process
Better understanding
Whole responsibility
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