Fundamentals of Management, 8th ed

118

Part 2: Planning

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SUMMARY OF LEARNING OUTCOMES AND KEY POINTS

1.

Define decision making, and discuss types of

decisions and decision-making conditions.

• Decision making is the act of choosing one

alternative from among a set of alternatives.

• The decision-making process includes recog-

nizing and defining the nature of a decision

situation, identifying alternatives, choosing the

“best” alternative, and putting it into practice.

• Two common types of decisions are

programmed and nonprogrammed.

• Decisions may be made under states of

certainty, risk, or uncertainty.

2.

Discuss rational perspectives on decision making,

including the steps involved.

• Rational perspectives on decision making rest

on the classical model.

• This model assumes that managers have

complete information and that they will behave

rationally. The primary steps in rational

decision making are the following:

• Recognizing and defining the situation

• Identifying alternatives

• Evaluating alternatives

• Selecting the best alternative

• Implementing the chosen alternative

• Following up and evaluating the effective-

ness of the alternative after it is implemented

3.

Describe the behavioral aspects of decision making.

• Behavioral aspects of decision making rely on

the administrative model.

• This model recognizes that managers use

incomplete information and do not always

behave rationally.

• The administrative model also recognizes the

concepts of bounded rationality and satisficing.

• Political activities by coalitions, managerial

intuition, and the tendency to become increas-

ingly committed to a chosen course of action

are all important.

• Risk propensity is also an important behavioral

perspective on decision making.

• Ethics also affect how managers make

decisions.

4.

Discuss group and team decision making, includ-

ing its advantages and disadvantages and how it

can be more effectively managed.

• To help enhance decision-making effectiveness,

managers often use interacting, Delphi, or

nominal groups or teams.

• Group and team decision making in general has

several advantages and disadvantages relative to

individual decision making.

• Managers can adopt a number of strategies to

help groups and teams make better decisions.

DISCUSSION QUESTIONS