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business sense seems sound. At present, of course, he can’t actually do business
with Cuban coffee growers, but he has figured out a way to lay the groundwork.
He has already established working relationships with coffee cooperatives, groups
of individual growers who pool their crops to enter the export market and secure
higher prices, in Latin America and Africa. “Right now,” he says, “my objective is
to show those cooperatives that I’m willing to risk something on their behalf,” but
a longer-term goal is to invest the same capital and acquired know-how in
relationships with Cuban growers.
The director of Thanksgiving’s Cuba project, Nick Hoskins, has already
developed contacts in Cuba’s coffee-growing regions, and Katzeff hopes to
establish a twinning agreement, an exchange of people-to-people programs, with
cooperatives in the coffee-growing province of Santiago de Cuba. “We’re trying
to create models that other companies can use and benefit from,” explains
Katzeff, who is meanwhile willing to settle for a public relations program of
transactions—monetary and otherwise—with American coffee drinkers.
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Managers make decisions every day. Some have immediate consequences. Others, like
those made in the context of the Cuban embargo, are much more long-term in nature.
Making effective decisions, as well as recognizing when a bad decision has been made
and quickly responding to it, is a key ingredient in organizational effectiveness. Indeed,
some experts believe that decision making is the most basic and fundamental of all man-
agerial activities.
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Thus, we discuss it here, in the context of the first management func-
tion, planning. Keep in mind, however, that although decision making is perhaps most
closely linked to the planning function, it is also part of organizing, leading, and
controlling.
We begin our discussion by exploring the nature of decision making. We then
describe rational perspectives on decision making. Behavioral aspects of decision making
are then introduced and described. We conclude with a discussion of group and team
decision making.
THE NATURE OF DECISION MAKING
Managers at Disney recently made the decision to buy all of George Lucas’s properties,
including the characters and stories in the Star Wars mythology. At about the same time,
the general manager of the Ford dealership in Bryan, Texas, made a decision to sponsor
a local youth soccer team for $200. Each of these examples reflects a decision, but the
decisions differ in many ways. Thus, as a starting point in understanding decision mak-
ing, we must first explore the meaning of decision making as well as types of decisions
and the conditions under which decisions are made.
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