管理学罗宾斯9版教师手册.doc

CHAPTER4FOUNDATIONS OF DECISION MAKINGLEARNING OUTCOMES After reading this chapter, students should be able to:1. Describe the decision-making process.2. Explain the three approaches managers can use to make decisions.3. Describe the types of decisions and decision-making conditions managers face.4. Discuss group decision-making.5. Discuss contemporary issues in managerial decision-making. Management MythMyth: The best managers are exempt from making common decision-making mistakes. Truth: Studies have found that executives frequently make the same mistakes that many of us make in our daily decisions. SUMMARYThe overall quality of a mangers decisions goes a long way in determining an organizations success or failure. This chapter focuses on the types of decisions managers make and how they should be made. Teaching Tips:Have students think about important decisions they have made recently. Questions for students to consider: Did they follow a series of steps to think through while making this decision? Was there a high degree of uncertainty involved in making the decision? Was a group of people involved in making this decision? If so, did the group help or hurt the decision making process?I. HOW DO MANAGERS MAKE DECISIONS? A. Introduction1. Decision-making is typically described as “choosing among alternatives.”2. This is simplistic because decision-making is a process.a) See Exhibit 4-1 illustrating the decision-making process. B. What defines a decision problem? 1. The decision-making process begins with the identification of a problem (Step 1), a discrepancy between an existing and a desired state of affairs.a) Kraft Foods example.2. Problem identification is subjective. 3. The manager who by mistake solves the wrong problem perfectly, is likely to perform just as poorly as the manager who fails to identify the right problem and does nothing.a) How do managers become aware that they have a discrepancy? b) Managers compare their current state of affairs against an acceptable standard. 1) Past performance.2) Previously set goals.3) Performance of some other unit within the organization or in other organizations.C. What Is Relevant in the Decision-Making Process? 1. Once a problem is identified, the decision criteria must be identified (Step 2).2. Car-buying example continued.3. Every decision maker has criteriaexplicitly stated or notthat guide his/her decision. a) What is not identified is as important as what is. 4. If a decision maker does not identify a particular factor, it is treated as irrelevant.D. How Does the Decision Maker Weight the Criteria and Analyze Alternatives?1. It is necessary to allocate weights to the items listed in Step 2 in order to give them their relative priority in the decision (Step 3).2. A simple approach, give the most important criterion a weight of ten and then assign weights to the rest against that standard. a) Exhibit 4-2 lists the criteria and weights for vehicle replacement decision. 3. Then the decision maker lists the alternatives that could succeed in resolving the problem (Step 4). a) No attempt is made to appraise these alternatives, only to list them. 4. Once identified, the decision maker must critically analyze each alternative (Step 5). a) Each alternative is evaluated by appraising it against the criteria and weights established in Steps 2 and 3.1) Exhibit 4-3 shows the assessed values for each vehicle; it does not reflect the weighting done in Step 3. b) If you multiply each alternative assessment against its weight, you get Exhibit 3-4. c) Notice that the weighting of the criteria has changed the ranking of alternatives in our example.E. What Determines the Best Choice?1. The critical act of choosing the best alternative from among those enumerated and assessed (Step 6). F. What Happens In Decision Implementation? 1. The decision may still fail if it is not implemented properly (Step 7). 2. Decision implementation includes conveying the decision to those affected and getting their commitment to it. 3. The people who must carry out a decision are most likely to enthusiastically endorse the outcome if they participate in the decision-making process.G. What is the Last Step in the Decision Process?1. The last step (Step 8) appraises the result of the decision to see whether it has corrected the problem. 2. Did the alternative chosen in Step 6 and implemented in Step 7 accomplish the desired result? H. Common Errors Committed in the Decision-Making Process1. Making decisions is making choices. 2. Heuristics are “rules of thumb” that managers use to simplify their decision making. 3. Exhibit 4-5 identifies 12 common decision errors and biases that managers make. 4. Some common mistakes: a) Overconfidence bias - they think they know more than they do or hold unrealistically positive views of themselves and their performance. b) Immediate gratification bias - describes decision makers who tend to want immediate rewards and to avoid immediate costs.c) Anchoring effect -describes when decision makers fixate on initial information as a starting point and then, once set, fail to adequately adjust for subsequent information. d) Selective perception bias - when decision makers selectively organize and interpret events based on their biased perceptions. e) Confirmation bias - decision makers who seek out information that reaffirms their past choices and discount information that contradicts past judgmentsf) Framing bias - when decision makers select and highlight certain aspects of a situation while excluding others.g) Availability bias - is when decisions makers tend to remember events that are the most recent and vivid in their memory.h) Representation bias - when decision makers assess the likelihood of an event based on how closely it resembles other events or sets of events. i) Randomness bias - describes when decision makers try to create meaning out of random events.j) Sunk costs error - when decision makers forget that current choices cant correct the past.k) Self-serving bias -decision makers who are quick to take credit for their successes and to blame failure on outside factors.l) Hindsight bias - the tendency for decision makers to falsely believe that they would have accurately predicted the outcome of an event once that outcome is actually known.II. WHAT ARE THREE APPROACHES MANAGERS CAN USE TO MAKE DECISIONS?Learning Catalytics Question: Instructor Directions and Follow-UpQuestion TypeQuestionAnswer/ResponseFor the InstructorRegionThere are three approaches to decision making a manager may choose: the rational approach, bounded rationality, and intuition. Which approach did you use when you made the decision to choose this course?There is no correct answer.The decision to come to college for many students is layered and complex. Help them understand how they made their decisions and what influenced them. A. Rational Model 1. Decision making is the essence of management. Managersas they plan, organize, lead, and controlare called decision makers. (Exhibit 4-6).2. Managerial decision-making is assumed to be rational. a) Managers make consistent, value-maximizing choices within specified constraints.3. Decision maker who was perfectly rational would be fully objective and logical. a) He or she would carefully define the problem and have a clear and specific goal. b) The steps in the decision-making process would consistently lead to selecting the alternative that maximizes that goal. c) Decisions are made in the best interests of the organization.d) Guide users through problems by asking them a set of sequential questions about the situation and drawing conclusions based on the answers given.From the Past to the Present1. Herbert Simon found that within certain constraints, managers do act rationally.2. Because it is impossible for human beings to process and understand all the information necessary, they construct simplified models that extract the essential features from problems.a.) Bounded rationality, decision makers behave rationally within the limits of the simplified or bounded model.b.) The result is a satisfying decision; the solutions are “good enough.”Discuss This: Is satisfying settling for second best? Discuss. How does knowing about bounded rationality help managers be better decision makers?B. What Is Bounded Rationality?1. Management theory is built on the premise that individuals act rationally.2. The essence of managerial jobs revolves around the rational decision-making process. However, few people actually behave rationally. 3. How do managers actions within these boundaries differ from actions within the rational model? a) Once a problem is identified, the search for criteria and alternatives begins. 1) This list of criteria is generally limited and made up of the more conspicuous choices. b) Simon found that decision makers focus on easy-to-find choicesthose that are highly visible. c) This means developing alternatives that vary only slightly from past decisions about similar problems.d) Once this limited set of alternatives is identified, decision makers begin reviewing them. 1) The review will not be exhaustive. e) They review alternatives only until an alternative that is sufficient is found. 1) The first alternative to meet the “good enough” criterion ends the search.2) Consider the following example,(a) A finance major upon graduation is looking for a position as a personal financial planner with a minimum salary of $47,000. (b) They accept a job offer as a business credit analyst at a bank 50 miles away from home at a starting salary of $42,000. (c) Further searching would have revealed an opening for a personal financial planner (the job they were looking for) with firm 25 miles from home at a starting salary of $43,000.(d) They stopped searching when the first job was found because it was “good enough.”f) What are the implications of bounded rationality on the managers job? In situations in which the assumptions of perfect rationality do not apply (including many of the most important and far-reaching decisions that a manager makes), the details of the decision-making process are strongly influenced by the decision makers self-interest, the organizations culture, internal politics, and power considerations.g) Decision-making is also likely influenced by the organizations culture, internal politics, power considerations, and by a phenomenon called escalation of commitment, which is an increased commitment to a previous decision despite evidence that it may have been wrong. C. Intuition and Managerial Decision Making1) Its making decisions on the basis of experience, feelings, and accumulated judgment.2) Its been described as “unconscious reasoning.”3) Exhibit 4-7 shows 5 different aspects of intuition.Technology and the Managers JobMaking Better Decisions with Technology1. Expert systems use software programs to encode the relevant experience of an expert and allow a system to act like that expert in analyzing and solving ill-structured problems.a.) Use specialized knowledge about a particular problem area rather than general knowledge that would apply to all problems.b.) Use qualitative reasoning rather than numerical calculations.c.) Perform at a level of competence that is higher than that of non-expert humans.2. Neural networks are the next step beyond expert systems.a.) Use computer software to imitate the structure of brain cells and connections among them.b.) People cant easily assimilate more than two or three variables at once, but neural networks can perceive correlations among hundreds of variables.c.) For example, most banks today use neural networks to flag potential credit card fraud and its more likely that the majority of credit card transactions flagged will be actual cases of fraud. Also, fraudulent activities on a credit card can be uncovered in a matter of hours with neural networks.Discuss This Can a manager ever have too much data when making decisions? Explain. How can technology help managers make better decisions?III. WHAT TYPES OF DECISIONS AND DECISION-MAKING CONDITIONS DO MANAGERS FACE?Learning Catalytics Question: Instructor Directions and Follow-UpQuestion TypeQuestionAnswer/ResponseFor the InstructorRegionWhen you made your last mistake, of what common decision-making error or bias were you guilty?There is no correct answer.Help students understand the common decision-making errors and biases managers make. Use this question in a discussion of current newsworthy events.A. How Do Problems Differ? 1. Some problems are straightforward. The goal of the decision maker is clear, the problem familiar, and information about the problem easily defined and complete. a) Examples of well-structured problems include a suppliers tardiness with an important delivery, a customers wanting to return an Internet purchase, etc.2. Many situations, however, are ill-structured problems, are new, or unusual. Information about such problems is ambiguous or incomplete. a) Examples of ill-structured problems include the decision to enter a new market segment, to hire an architect to design a new office park, etc.B. How Does a Manager Make Programmed Decisions? 1. Programmed, or routine, decision making is the most efficient way to handle well-structured problems. 2. When problems are ill structured, managers must rely on nonprogrammed decision making.a) Automotive mechanic example. 3. Decisions are programmed to the extent that they are repetitive and routine and to the extent that a specific approach has been worked out for handling them.a) Programmed decision making is relatively simple and tends to rely heavily on previous solutions. b) The develop-the-alternatives stage is given little attention because programmed decision making becomes decision making by precedent. 4. Procedure is a series of interrelated sequential steps that a manager can use when responding to a well-structured problem. a) The only real difficulty is in identifying the problem. b) Once the problem is clear, so is the procedure. c) Example of purchasing manager and request for 250 copies of Norton Antivirus Software 5. A rule is an explicit statement that tells a manager what he or she ought or ought not to do. a) Rules are frequently used with a well-structured problem because they are simple to follow and ensure consistency.6. A policy provides guidelines to channel a managers thinking in a specific direction. a) In contrast to a rule, a policy establishes parameters for the decision maker rather than specifically stating what should or should not be done. b) Example, “we promote from within, whenever possible.”c) Analogy, think of the Ten Commandments as rules and the U.S. constitution as policy.C. How Do Nonprogrammed Decisions Differ from Programmed Decisions?1. Examples of nonprogrammed decisions: deciding whether to acquire another organization, deciding which global markets offer the most potential, engineering work processes to improve efficiency, etc. 2. Such decisions are unique and nonrecurring, involving an ill-structured problem with no cut-and-dried solution. The creation of a new organizational strategy is an example of a non-programmed decision. a) Example, A Jeff Bezos strategy to “get big fast”:1) Bezos strategy to “get big fast” helped the company grow but at the cost of perennial financial losses.2) To make a profit, Bezos made decisions affecting how the company operated, including allowing other sellers to sell their books at Amazon. For the first time, Amazon made a profit. D. How are Problems, Types of Decisions, and Organizational Level Integrated?1. Exhibit 4-8 describes the relationship between types of problems, types of decisions, and level in the organization. 2. Well-structured problems are responded to with programmed decision making. a) Lower-level managers essentially confront familiar and repetitive problems.3. Ill-structured problems require nonprogrammed decision making. a) The problems confronting managers up the organizational hierarchy are more likely to become ill structured.4. Few managerial decisions are either fully programmed or fully nonprogrammed. 5. Organizational efficiency is facilitated by the use of programmed decision making.a) Whenever possible, management decisions are likely to be programmed. b) There are strong economic incentives for top management to create policies, standard operating procedures, and rules to guide other managers.c) Programmed decisions minimize the need for managers to exercise discretion. d) This benefit is important because discretion costs money. E. What Decision-Making Conditions Do Managers Face?1. Certainty - which is a situation where a manager can make accurate decisions because the outcome of every alternative is known.2. Risk - conditions in which the decision maker is able to estimate the likelihood of certain outcomes.3. Uncertainty - is when youre not certain about the outcomes and cant even make reasonable probability estimates. IV. HOW DO GROUPS MAKE DECISIONS?A. Introduction 1. Many decisions in organizations, especially important decisions that have far-reaching effects on organizational activities and personnel, are typically made in groups. 2. In many cases, these groups represent people who will be most affected by the decisions.3. Managers spend a significant portion of their time in meetings.B. What Are the Advantages and Disadvantages of Group Decision Making?1. Individual and group decisions have their own