Decision Making Spring 2007 Decision Making 1 Decision

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Decision Making Spring 2007 Decision Making 1

Decision Making Spring 2007 Decision Making 1

Decision Making • • Spring 2007 Approaches to decision making The decision making process

Decision Making • • Spring 2007 Approaches to decision making The decision making process Participation Vroom decision tree Decision Making 2

Approaches to Decision Making • Pure rationality • The economic approach • Bounded rationality

Approaches to Decision Making • Pure rationality • The economic approach • Bounded rationality • There are limits on information that can be acquired and processed • Satisficing: Picking the first solution that’s “good enough” Spring 2007 Decision Making 3

Decision Making Process Identify problem Identify criteria Weight criteria Select alternative Analyze alternatives Develop

Decision Making Process Identify problem Identify criteria Weight criteria Select alternative Analyze alternatives Develop alternatives Feedback Implement solution Spring 2007 Evaluate decision quality Decision Making 4

Criteria for Decision Making • Quality of decision • Timeliness – how soon must

Criteria for Decision Making • Quality of decision • Timeliness – how soon must decision be reached • Cost of wrong decision • Stakeholders -- who has to be considered • Certainty vs. risk • Long-term vs. short-term Spring 2007 Decision Making 5

Programmed vs. Nonprogrammed Decisions • Programmed decision • One that is made regularly •

Programmed vs. Nonprogrammed Decisions • Programmed decision • One that is made regularly • Structures problems (clear problem, obvious criteria) • Pre-set rules, policies, procedures • Efficiency • Non-programmed decision • One-time • More “important” problem Spring 2007 Decision Making 6

What is Participation? • Aspects of participation • • Setting goals Making decisions Solving

What is Participation? • Aspects of participation • • Setting goals Making decisions Solving problems Changing the organization • Levels of involvement • Voice • Participation • Delegation • Fake participation Spring 2007 Decision Making 7

Participation: Pro and Con Spring 2007 Pro Con • It works…. . • Better

Participation: Pro and Con Spring 2007 Pro Con • It works…. . • Better information • Decision acceptance (more motivation) • Better for employees • Basic individual needs (self-actualization, autonomy, etc. ) • Social needs (group decision-making) • It doesn’t work…. . • Information may be centralized • Need for rapid response • It’s not necessary • Assigned goals enough • Employees may not be interested Decision Making 8

Decision Quality Group Decision Making: Level of Group Diversity Decision Speed Spring 2007 Decision

Decision Quality Group Decision Making: Level of Group Diversity Decision Speed Spring 2007 Decision Making 9

Vroom Decision Tree • Decision Criteria • • Spring 2007 Quality Requirement Commitment Requirement

Vroom Decision Tree • Decision Criteria • • Spring 2007 Quality Requirement Commitment Requirement Leader’s Information Problem Structure Commitment Probability Goal Congruence Subordinate Conflict Subordinate Information Decision Making 10

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