Chapter 4 Managing Decision Making (3).pptx

Management

1. SARDER ARIFUZZAMAN SR. LECTURER DEPARTMENT OF PHARMACY WORLD UNIVERSITY OF BANGLADESH

2. Learning Outcomes Define decision making and discuss types of decisions and decision-making conditions. Discuss rational perspectives on decision making, including the steps involved. Describe the behavioral aspects of decision making. Discuss group and team decision making, including its advantages and disadvantages and how it can be more effectively managed.

3. THE NATURE OF DECISION MAKING Decision making The act of choosing one alternative from among a set of alternatives Decision-making process Recognizing and defining the nature of a decision situation, identifying alternatives, choosing the best alternative, and putting it into practice

4. Types of Decisions Programmed decision A decision that is relatively structured or recurs with some frequency (or both) Nonprogrammed decision A decision that is relatively unstructured and occurs much less often than a programmed decision

5. Decision-Making Conditions

6. Classical Model of Decision Making

7. Steps in Rational Decision Making Process STEP DETAIL EXAMPLE 1. Recognizing and defining the decision situation Some stimulus indicates that a decision must be made. The stimulus may be positive or negative. A plant manager sees that employee turnover has increased by 5 percent. 2, Identifying the alternative Both obvious and creative alternatives are desired. In general, the more important the decision, the more alternatives should be generated. The plant manager can increase wages, increase benefits, or change hiring standards. 3. Evaluating the alternatives Each alternative is evaluated to determine its feasibility, its satisfactoriness, and its consequences. Increasing benefits may not be feasible. Increasing wages and changing hiring standards may satisfy all conditions. 4. Selective the best alternatives Consider all situational factors, and choose the alternative that best fits the manager’s situation. Changing hiring standards will take an extended period of time to cut turnover, so increase wages. 5. Implementing the chosen alternative The chosen alternative is implemented into the organizational system. The plant manager may need permission from corporate headquarters. The human resources department establishes a new wage structure. 6. Following up and evaluating the results At some time in the future, the manager should ascertain the extent to which the alternative chosen in Step 4 and implemented in Step 5 has worked. The plant manager notes that, six months later, turnover dropped to its previous level.

8. Steps in Rational Decision Making Process

9. BEHAVIORAL ASPECTS OF DECISION MAKING D ecisions are often made with little consideration for - logic and rationality. Other behavioral aspects include - political forces, -intuition and escalation of commitment, -risk propensity, and -ethics.

10. BEHAVIORAL ASPECTS OF DECISION MAKING A decision-making model that argues that decision makers (1) use incomplete and imperfect information, (2) are constrained by bounded rationality, and (3) tend to “satisfice” when making decisions.

11. Forms of Group and Team Decision Making- The most common methods of group and team decision making are- interacting groups, Delphi groups, and nominal groups. GROUP AND TEAM DECISION MAKING IN ORGANIZATIONS

12. GROUP AND TEAM DECISION MAKING IN ORGANIZATIONS Interacting groups or teams Interacting groups or teams are the most common decision-making group. The format is simple—either an existing or a newly designated group or team is asked to make a decision. Existing groups or teams might be functional departments, regular work teams, or standing committees. Newly designated groups or teams can be ad hoc committees, task forces, or newly constituted work teams. The group or team members talk among themselves, argue, agree, form internal coalitions, any, after some period of deliberation, the group or team makes its decision.

13. GROUP AND TEAM DECISION MAKING IN ORGANIZATIONS Delphi group A Delphi group is sometimes used to arrive at a consensus of expert opinion. Developed by the Rand Corporation, the Delphi procedure solicits input from a panel of experts who contribute individually. Their opinions are combined and, in effect, averaged. The first step in using the Delphi procedure is to obtain the cooperation of a panel of experts. For this situation, experts might include various research scientists, university researchers, and executives in a relevant energy industry. At first, the experts are asked to anonymously predict a time frame for the expected breakthrough. The persons coordinating the Delphi group collect the responses, average them, and ask the experts for another prediction. In this round, the experts who provided unusual or extreme predictions may be asked to justify them.

14. GROUP AND TEAM DECISION MAKING IN ORGANIZATIONS Nominal Groups A structured technique used to generate creative and innovative alternatives or ideas Another useful group and team decision-making technique that is occasionally Unlike the Delphi method, in which group members do not see one another, nominal group members are brought together in a face-to-face setting. The members represent a group in name only, however; they do not talk to one another freely like the members of interacting groups. To begin, the manager assembles a group of knowledgeable experts and outlines the problem to them. The group members are then asked to individually write down as many alternatives as they can think of. The members then take turns stating their ideas, which are recorded on a flip chart or board at the front of the room. Discussion is limited to simple clarification.

15. GROUP AND TEAM DECISION MAKING IN ORGANIZATIONS Advantages Disadvantages More information and knowledge are available. The process takes longer than individual decision making, so it is costlier. More alternatives are likely to be generated. Compromise decisions resulting from indecisiveness may emerge. More acceptance of the final decision is likely. One person may dominate the group. Enhanced communication of the decision may result. Groupthink may occur. Better decisions generally emerge. Advantages and Disadvantages of Group and Team Decision Making