What is Decision Making?What is Decision Making?

Business ManagementBusiness Management

Chapter 8.1Chapter 8.1

Decision MakingDecision Making

Hundreds of decisions each dayHundreds of decisions each day

Varying levels of importanceVarying levels of importance

Varying degrees of difficultyVarying degrees of difficulty

Ways to Make DecisionsWays to Make Decisions

Two basic waysTwo basic ways

IntuitivelyIntuitively

RationallyRationally

Intuitive Decision MakingIntuitive Decision Making

Decisions based on intuition or hunchesDecisions based on intuition or hunchesRely on experience / knowledge rather Rely on experience / knowledge rather

than statistical datathan statistical dataCan go against traditional approachesCan go against traditional approachesOften used when time plays a factorOften used when time plays a factor

Rational Decision MakingRational Decision Making

Decisions based on factual information Decisions based on factual information and logical reasoningand logical reasoning

More scientific than intuitiveMore scientific than intuitiveRelies on quick and effective gathering Relies on quick and effective gathering

and analysis of informationand analysis of informationMany sources are often consultedMany sources are often consulted

BrainstormBrainstorm

Think of a decision you made today that Think of a decision you made today that was intuitivewas intuitive

Think of a decision you made today that Think of a decision you made today that was rationalwas rational

Six Steps to Rational DecisionsSix Steps to Rational Decisions

1)1) Recognizing the need for a decisionRecognizing the need for a decision

2)2) Determining how to make a decisionDetermining how to make a decision

3)3) Gathering information to helpGathering information to help

4)4) Identifying possible alternativesIdentifying possible alternatives

5)5) Evaluating each alternativeEvaluating each alternative

6)6) Selecting the best alternativeSelecting the best alternative

Risk, Timing, ValuesRisk, Timing, Values

The risk associated with actions can factor The risk associated with actions can factor into the choiceinto the choice

The time frame for making the decision The time frame for making the decision can factor into the choicecan factor into the choice

The personal values of the decision maker The personal values of the decision maker can factor into the choicecan factor into the choice

ConsiderationsConsiderations

Manager’s position in the companyManager’s position in the companyThe company’s corporate cultureThe company’s corporate cultureThe employees the manager supervisesThe employees the manager supervisesResources available to the managerResources available to the manager

Real World ExamplesReal World Examples

What factors and considerations go into What factors and considerations go into deciding whether or not to cancel school deciding whether or not to cancel school for a snow day?for a snow day?

What factors and considerations go into What factors and considerations go into deciding whether or not to press charges deciding whether or not to press charges against a kid shoplifting at your store?against a kid shoplifting at your store?

Participation in Decision MakingParticipation in Decision Making

““Two heads are better than one.”Two heads are better than one.”Managers rely on input of teamManagers rely on input of teamMany companies use team decision Many companies use team decision

making – a group of individuals with making – a group of individuals with different backgrounds assigned to resolve different backgrounds assigned to resolve specific problems or issuesspecific problems or issues

Types of Management Decision StylesTypes of Management Decision Styles

1)1) Autocratic – manager decides aloneAutocratic – manager decides alone

2)2) Semi-autocratic – employee input, but Semi-autocratic – employee input, but manager decidesmanager decides

3)3) Leading – manager uses input to lead to Leading – manager uses input to lead to decisiondecision

4)4) Collaborative – freely share and discuss Collaborative – freely share and discuss possible solutions; manager pickspossible solutions; manager picks

5)5) Accomodating – freely share and discuss Accomodating – freely share and discuss solutions before choosing onesolutions before choosing one

Self-ReflectionSelf-Reflection

Which management decision style do you Which management decision style do you think is most effective?think is most effective?

If you were the manager, which decision If you were the manager, which decision style do you think you would use most style do you think you would use most often?often?

Are there times when different styles are Are there times when different styles are more appropriate than others?more appropriate than others?