Decision Making,
Learning,
Creativity, and
Entrepreneurship
chapter seven
McGraw-Hill/Irwin
Copyright © 2014 by The McGraw-Hill Companies, Inc. All rights reserved.
Learning Objectives
1. Understand the nature of managerial decision
2.
making, differentiate between programmed
and non-programmed decisions, and explain
why non-programmed decision making is a
complex, uncertain process.
Describe the six steps that managers should
take to make the best decisions and explain
how cognitive biases can lead managers to
make poor decisions.
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Learning Objectives
3. Identify the advantages and disadvantages of group
4.
5.
decision making, and describe techniques that can
improve it.
Explain the role that organizational learning and
creativity play in helping managers to improve their
decisions.
Describe how managers can encourage and
promote entrepreneurship to create a learning
organization and differentiate between
entrepreneurs and intrapreneurs
7-3
The Nature of Managerial
Decision Making
 Decision Making
 The process by which managers respond to
opportunities and threats that confront them by
analyzing options and making determinations
about specific
organizational
goals and courses
of action.
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Decision Making
 Programmed Decision
 Routine, virtually automatic process
 Decisions have been made so many times in the
past that managers have developed rules or
guidelines to be applied when certain situations
inevitably occur
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The Classical Model
 Optimum decision
 The most appropriate decision in light of what
managers believe to be the most desirable future
consequences for their organization.
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The Classical Model of Decision
Making
Figure 7.1
7-7
Why Information Is Incomplete
Figure 7.2
7-8
Causes of Incomplete Information
Ambiguous
Figure 7.3
Information
 Information that can
be interpreted in
multiple and often
conflicting ways.
Young Woman or Old
Woman
7-9
Six Steps in Decision Making
Figure 7.4
7-10
Group Decision Making
 Superior to individual making
 Choices less likely to fall victim to bias
 Able to draw on combined skills of group
members
 Improve ability to generate feasible
alternatives
7-11
Devil’s Advocacy and Dialectical
Inquiry
Figure 7.7
7-12
Organizational Learning and
Creativity
Creativity
 A decision maker’s
ability to discover
original and novel
ideas that lead to
feasible alternative
courses of action.
7-13
Senge’s Principles for Creating a
Learning Organization
Figure 7.8
7-14
Entrepreneurship and
Management
 Frequently, founding entrepreneur lacks the
skills, patience, and experience to engage in
the difficult and
challenging work
of management
7-15