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2. Managerial Decision-Making, Bad decision making affects the following…
2. Managerial Decision-Making
2.1 Overview of Managerial Decision-Making
Stakeholders:
people or groups that are affected by an organization.
:
What is the right (correct) answer?
a manager is choosing between multiple good options, and it’s not clear which will be the best.
decide when to decide
a manager’s decisions are often complex
Managers frequently make decisions without complete information
What is the right (ethical) answer?
our decisions have a positive or a negative impact.
2.2 How the brain processes information to make decisions: reflective and reactive systems.
The reflective system
Analytical
Logical
Methodical
Deliberate
The reactive system
Impulsive
Quick
Intuitive
Reflective decision-making
Complex situations
Information rationally
The power our emotions
Reactive decision-making
Similar situation
Intuitive route
Experience or expertise
The role of emotions
Emotional intelligence
Ability
Self - regulation
Empathy
Social skills
Self - awareness
2.6 Group decision-making
Involving more people
Advantages
Each individual brings unique information
Incorporate different perspective
Brainstorming
Disadvantages
Suppression of dissent.
Groupthink
How to form a quality group
Finding some common ground:
Interests
Beliefs
Goals
Experiences
Devil’s advocate
Reduce conflicts
Conclusion
Decision making is a crucial daily activity for...
Managers
They think critically about the information
Rarely rely solely on their own expertise
Conduct research and collect information from others
2.4 Barriers to Effective Decision-Making
Time Constraints
Personal Biases
Bounded Rationality
Uncertainty
Conflict
Escalation of Commitment
2.5 Improving the Quality of Decision-Making
Techniques for Making Better:
Analyzing Alternatives
Experience
Selecting, Implementing and Evaluating
Recognizing That a Decision Needs to Be Made
Generating Multiple Alternatives
2.3 Programmed and Nonprogrammed Decisions
Nonprogrammed Decisions
Are novel, unstructured decisions that are generally based on criteria that are not well-defined
Programmed Decisions
Programmed decisions are those that are repeated over time and for which an existing set of rules can be
The Decision-Making Process
Recognize that a decision needs to be made.
Generate multiple alternatives.
Analyze the alternatives.
Select an alternative.
Implement the selected alternative.
Evaluate its effectiveness.
Bad decision making affects the following way:
reduced productivity
increased expenses.
frustration among employees
decision making:
action or process of thinking about possible options and selecting one.
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