Homework 6
Gubaton, Michelle C. February 26, 2015
MGT141 | AY01 Thursday
Summary of chapter 12
Decision - choice made from available alternatives
Decision making - process of identifying problems and opportunities and resolving them
Categories of decisions:
1. Programmed decisions - Situations occurred often enough to enable decision rules to be developed and applied in the future
2. Nonprogrammed decisions - in response to unique, poorly defined and largely unstructured, and have important consequences to the organization
Certainty - all the information the decision maker needs is fully available
Risk - future outcomes associated with each alternative are subject to chance
Uncertainty - managers may have to come up with creative approaches to alternatives
Ambiguity - by far the most difficult decision situation
Three decision-making decisions
1. Classical model
Assumptions - Decision maker operates to accomplish goals that are known and agreed upon
Normative - describes how a manager should and provides guidelines for reaching an ideal decision
2. Administrative model
Bounded rationality - people have limits or boundaries on how rational they can be
Satisficing - means that decision makers choose the first solution alternative that satisfies minimal decision criteria
Descriptive - how managers actually make decisions--not how they should
3. Political model
Coalition - informal alliance among manages who support a specific goal
Six steps in the managerial decision-making process
1. Recognition of decision requirement
2. Diagnosis and analysis of causes
3. Development of alternatives
4. Selection of desired alternatives
5. Implementation of chosen alternatives
6. Evaluation and feedback
Diagnosis - analyze underlying causal factors associated with the decision situation
Selection of desired alternatives:
1. Risk propensity - willingness to undertake risk with the opportunity of gaining an increased payoff
2. Implementation - using
MGT141 | AY01 Thursday
Summary of chapter 12
Decision - choice made from available alternatives
Decision making - process of identifying problems and opportunities and resolving them
Categories of decisions:
1. Programmed decisions - Situations occurred often enough to enable decision rules to be developed and applied in the future
2. Nonprogrammed decisions - in response to unique, poorly defined and largely unstructured, and have important consequences to the organization
Certainty - all the information the decision maker needs is fully available
Risk - future outcomes associated with each alternative are subject to chance
Uncertainty - managers may have to come up with creative approaches to alternatives
Ambiguity - by far the most difficult decision situation
Three decision-making decisions
1. Classical model
Assumptions - Decision maker operates to accomplish goals that are known and agreed upon
Normative - describes how a manager should and provides guidelines for reaching an ideal decision
2. Administrative model
Bounded rationality - people have limits or boundaries on how rational they can be
Satisficing - means that decision makers choose the first solution alternative that satisfies minimal decision criteria
Descriptive - how managers actually make decisions--not how they should
3. Political model
Coalition - informal alliance among manages who support a specific goal
Six steps in the managerial decision-making process
1. Recognition of decision requirement
2. Diagnosis and analysis of causes
3. Development of alternatives
4. Selection of desired alternatives
5. Implementation of chosen alternatives
6. Evaluation and feedback
Diagnosis - analyze underlying causal factors associated with the decision situation
Selection of desired alternatives:
1. Risk propensity - willingness to undertake risk with the opportunity of gaining an increased payoff
2. Implementation - using