Brand Course for International Students
A decision is a choice from two or more alternatives.
The decision-making process includes the eight steps: identifying a problem; identifying decision criteria; allocating weights to the criteria; developing alternatives; analyzing alternatives; selecting an alternative; implementing the alternative; and evaluating decision effectiveness.
3.Why are managers typically described as decision makers?
Managers are described as decision makers because decision making is part of all four managerial functions (planning, organizing, leading, and controlling).
4.What is the difference between decision making of the rationality and bounded rationality viewpoints.
Managerial decision making is assumed to be rational; that is, managers are assumed to make consistent, value-maximizing choices within specified constraints. In bounded rationality, managers construct simplified models that extract the essential features from problems without capturing all their complexity. Then, given information processing limitations and constraints imposed by the organization, managers attempt to behave rationally within the parameters of the simple model. The result is a satisficing decision rather than a maximizing one.
Intuition in decision making allows for a subconscious process of making decisions based on previous experience and accumulated judgment.
Well-structured problems are straightforward; the goal of the decision maker is clear, the problem is familiar, and information about the problem is easily defined and complete. Decisions are programmed to the extent that they are repetitive and routine, and to the extent that a definite approach has been worked out for handling them.
Ill-structured problems are new or unusual; information about such problems is ambiguous or incomplete. Nonprogrammed decisions are unique and nonrecurring.
Under
conditions of certainty, the manager is able to make perfectly accurate decisions because the outcome from every alternative is known. Under conditions of risk, the decision maker is able to estimate the likelihood of certain alternatives or outcomes.
Under conditions of uncertainty, the optimistic manager will follow a maximax choice (maximizing the maximum possible payoff), the pessimist will pursue a maximin choice (maximizing the minimum possible payoff), and the manager who desires to minimize maximum regret will opt for a minimax choice.
The decision-making process is affected by four factors including the decision-making approach being followed, the decision-making conditions, the type of problem being dealt with, and the decision maker’s own style of decision making.
Linear thinking style, is characterized by a person’s preference for using external data and facts and processing this information through rational, logical thinking to guide decisions and actions. Nonlinear thinking style, is characterized by a preference for internal sources of information (feelings and intuition) and processing this information with internal insights, feelings, and hunches to guide decisions and actions.
11.What is planning?
Planning involves defining the organization’s goals, establishing an overall strategy for achieving those goals, and developing a comprehensive set of plans to integrate and coordinate organizational work. It’s concerned with both ends (what’s to be done) and means (how it’s to be done).
Planning gives direction, reduces the impact of change, establishes coordinated effort, reduces uncertainty, minimizes waste and redundancy, and sets the standards used in controlling.
Goals are desired outcomes for individuals, groups, or entire organizations. Plans are documents that outline how goals are going to be met and that typically describe resource allocations, schedules, and other necessary actions to accomplish the goals.
Plans are documents that outline how goals are going to be met. Plans can be described by their breadth, time frame, specificity, and frequency of use.
Breadth: Strategic versus operational plans. Strategic plans apply to the entire organization, establish the organization’s overall goals. Operational plans encompass a particular operational area of the organization.
Time frame: Short-term versus long-term plans. Long-term plans are plans with a time frame beyond three years. Short-term plans cover one year or less.
Specificity: Specific versus directional plans. Specific plans are clearly defined and leave no room for interpretation. Directional plans are flexible and set out general guidelines.
Frequency of use: Single-use versus standing plans. Single-use plan is one-time plan specifically designed to meet the needs of a unique situation. Standing plans are ongoing plans that provide guidance for activities performed repeatedly.
15.Distinguish between traditional goal setting and management by objectives.
In traditional goal setting goals are set at the top and then are broken down into subgoals for each level of the organization. Management by objectives (MBO) is a system in which specific performance objectives are jointly determined by subordinates and their superiors.
16.Explain the concept of the means-end chain.
Answer
An integrated network of goals in which the accomplishment of goals at one level serves as the means for achieving the goals, or ends, at the next level.
17.What are characteristics of well-designed goals?
Well-designed goals have six characteristics: written in terms of outcomes; measurable and quantifiable; clear as to time frame; challenging but attainable; written down; and communicated to all organizational members who need to know them.
Managers should review the organization’s mission; evaluate available resources; determine individually, or with input from others, the goals; write down the goals and communicate them to all necessary organizational members; and review results and determine whether goals are being met.
Developing a PERT network requires that a manager identify all key activities needed to complete a project, rank them in order of importance, and estimate each activity’s completion time.
20.Describe how managers can effectively plan in today’s dynamic environment.
Answer
The external environment is continually changing. Dynamic environments are more the norm than the exception. Managers should develop plans that are specific, but flexible. Planning is an ongoing process and maintaining flexibility is important. Even though the environment is highly uncertain, it’s critical to continue formal planning. Persistence in planning contributes to significant performance improvement. In addition, a flatter hierarchy allows lower organizational levels to set goals and develop plans.
