Matakuliah
Tahun
: J0562 / Management
: 2010
Decision Making :
The Essence manager’s job
Pertemuan 03 (Thrid Meeting)
Learning Outcome
Student should be able to explain
The decision making process, the manager
As decision maker -> C3
Learning Outline
• The Decision Making Process
• The Manager as Decision Maker
• Decision Making for Today’ World
The Decision Making Process
a)
b)
c)
d)
e)
f)
g)
h)
Identification of a problem
Identification of Decision Creteria
Alocation of Weights to Creteria
Development of Alternatives
Analysis of Alternatives
Selection of an Alternatives
Implementation of the Altrnatives
Evaluation of Decision Effectiveness
Decision
Choice from two or more alternatives
Decision-making
Decision-making Process
A set of eight steps that include identifying a
problem, selecting an alternatives, and
evaluating the decision’s effectiveness
Problem
A discrepancy between an existing and a
desired state of affairs
A decision-making process begins with the
existence of a problem
Step 1 : identifying a
Problem
step 2 :identifying
decision criteria
step 3 : allocation
weights to creteria
step 4 : developing
alternatives
step 5 : analyzing
alternatives
step 6 : selecting an
alternative
step 7 : implementing
the alternative
step 8 : evaluating
decision effectiveness
My sales reps need new computers!
• Memory and storage
• Display quality
• Battery life
• Warranty
• Carrying weight
Toshiba , HP, Sony, Dell, Apple, lenovo
10
3
8
4
6
Assessed values of laptop computers using decision
criteria and next evaluation of laptop alternatives
against weighted creteria
Toshiba *
Toshiba
Evaluation
The Manager as Decision Maker
Leading
Planning
•
•
•
•
what are the organization’s long term
objectives ?
What strategies will best achive those
objectives ?
What should the organization’s short
term objectives be ?
How difficult should individual goals
be?
Organizing
•
•
•
•
How many employees should I have
report directly to me ?
How much centralization should there
be in the organization ?
How should jobs be designed ?
When should the organization
implement a different structure ?
•
•
•
•
How do I handle employees who
appear to be low in motivation ?
What is the most effective leadeership
style in a given situation ?
How will a specific change affect
worker productivity ?
When is the right time to stimulate
conflict ?
Controlling
•
•
•
•
What activity in the oganization need
to be controlled ?
How should those activities be
controlled ?
When is a performance deviation
significant ?
What type of maangement information
system should the organization have ?
Making Decisions :
Rationality, Bounded Rationality and
Intuition
Rational decision making
Decision making behavior where choices are consistent
and value maximizing within specified constraints
Bounded rationality
Decision making behavior that’s rational, but limited
(bounded) by an individual’s ability to process information
Intuition
Values or
ethics based
decisions
Sub
conscious
mental
processing
Experience
based
decisions
Intuituion
Cognitive
based
decisions
Affect
initiated
decisions
Decision-making Conditions
• Certainty
A situation in which a manager can make accurate
decisions because all outcomes are known
• Risk
A situation in which the decision maker is able to
estimate the likehood of certain outcomes
• Uncertainty
A situation in which a decision maker has neither
certainty nor reasonable probability estimates
available
Decision making Styles
analytic
conceptual
directive
behavior
Decision making biases and errors
overconfi
dence
hindsight
Immediat
e
gratificati
on
Selfserving
Anchorin
g effect
Decision
making
error and
biases
Sunk
costs
Selective
perceptio
n
randomn
ess
confirmat
ion
represen
tation
framing
availabilt
y
Decision making for today’s world
• Understand cultural differences
• Know when it’s time to call quits
• Do use an effective decision making process