Decision-Making

					I. The Importance of Decision Making

					Why would managers need others' help in the decision-making process? Because a manager alone may not have enough information to make a sound decision.

					Different Ways to Make Decisions

					Intuitive Decision Making - making decisions on intuition or hunches.

					Rational Decision Making - making decisions on factual information and logical reasoning.

					6 Basic Steps:

					1. Recognize the need for a decision

					2. Determining how to go about making a decision

					3. Gathering information to help make a decision

					4. Identifying possible alternatives

					5. Evaluating each alternative

					6. Selecting the best alternative

					Although both methods of decision making are valid, rational decision making is more scientific than intuitive decision making

					Thought Experiment #1: Imagine having to decide to buy a car, how would you go about it? No really, think about this. Teenagers tend to go with intuitive, and the answer is usually "YES!", but wouldn't a better decision be one based on a more rational method?

					Thought Experiment #2: Now let's say you are driving down the road at the speed limit someone has an accident several cars ahead of you. You don't actually see it happen but, suddenly, everyone in front of you is slamming on their brakes to come to a stop on the freeway. You are traveling too fast to get the car to stop in time to keep from rear-ending the car in front of you. However, if you steer into the emergency lane or the shoulder of the roadway, you may be able to avoid a pile-ip. Do you decide rationally how to avoid an accident, or do you intuitively steer into a part of the roadway you are not supposed to be in?

					II. Factors Influencing Decisions

					Risk in Decision Making

					Not having all of the facts

					Not doing enough research

					The Importance of Timing

					What plays a more critical role in business success? (1) the type of decision makers managers are, or; (2) their timing in making their decisions?

					The Roll of Values

					What values determine how quickly a manager decides to lay off workers?

					Managers with predominantly economic values usually decide to lay off workers more quickly than managers with predominantly social values.

					Participation in Decision Making

Lost at Sea.pdf (this worksheet was done individually and as a member of a team in class)

Why would managers discuss their decisions with their employees? So that employees will feel they took part in the decision-making process and support the decision.

Team Decision Making is the process of resolving problems and issues by assigning several people with different backgrounds (accounting, administration, manufacturing, research) to a group.

					Types of Management Decision Styles

					Autocratic:

					Manager makes the decision alone.

					Semi-autocratic:

					Manager asks subordinates for information but still makes the decision alone.

					Leading:

					Managers shares the situation with a few select subordinates and asks them individually for information and advice.

					The manager still makes the final decision which may or may not reflect the subordinates' influence.

					Collaborative:

					Manager meets with all subordinates as a group to discuss the situation.

					Information is freely shared.

					The manager still makes the final decision.

					Thought Experiment #3: Do you think that most managers prefer leading or collaborative styles of management? Research major corporate CEOs and find out what kinds of management styles they have and why.

					I. Making Creative Decisions

					The most successful companies have creative managers who use five basic steps:

					1. Preparation: The manager investigates thoroughly to make sure all parts of the problem are understood and known.

					2. Concentration: The manager sets a timetable.

					3. Incubation: The manager looks at the various options.

					4. Illumination: The manager finds an acceptable solution.

					5. Verification: The manager tests the solution

					Encouraging Creativity

					Brainstorming - a group of people come up with as many ideas as possible without making judgements about those ideas.

					Brainstorming has three basic rules:

					1. Members of the group cannot criticize any idea.

					2. Members of the group cannot praise any idea.

					3. Members of the group cannot question or discuss ideas.

					Brainwriting - like brainstorming but members of the group write down their ideas on paper unsigned.

					Members share their papers with others in the group, who then add their own comments.

					The leader then collects the papers and presents the best ideas to the group.

					Mind Mapping

					Software for mind mapping: Free Mind (all platforms), Edraw Mindmap (Windows), MindMeister (free online mind mapping in the browser), XMind (Windows or Mac)

					Wish Lists - allowing the group to solve ideas without any physical or financial constraints. The leader:

					encourages the group to come up with creative ideas;

					does not want the group to rule out any ideas at first;

					then instructs the group to take the ideas and make them as practical as possible; and,

					finally, the leader and the group select the most practical solutions.

					Meyers Model for Creative Decision Making

					Stage 1: Recognition

					Stage 2: Fact Finding

					Stage 3: Problem Finding

					Stage 4: Idea Finding

					Stage 5: Solution Finding

					Stage 6: Acceptance Finding

					Barriers to Effective Decision Making

					Complacency: Thinking that the decision is easier than it really is.

					Avoidance: Denying the importance of the problem.

					Panic: Becoming frantic trying to come to a decision.

					Indecisiveness: Unable to make a final decision.

					Decision-Making Characteristics of Successful Companies

					accepting change

					listening to customers

					decentralizing authority

					hiring carefully

					training employees continuously

					controlling costs