13–1 nature of managerial decision making decision making situations: 1.programmed decisions...

13–1

•Nature of Managerial •Decision Making

• Decision making situations:

• 1. Programmed decisions

2. Non-Programmed decisions making

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• Nature of Managerial • Decision Making

• In fact Decision Making is very much identical with Managing.

• Let us see kind of decisions in POLCA!

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• Planning:

• 1. What the organization’s long-term objectives? (It’s a challenge, issue, or goal)

• 2. What strategies will best achieve those objectives?

• 3. What should the organization’s short-tem objectives be?

• 4. How difficult should individual goals be? (Goals should be achievable)

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• Organizing:

• 1. How many employees should I have report directly to me?

• 2. How should jobs be designed? (JD’s, Dept.)

• 3. When should an organization implement a different structure? (Employee Structure, Hierarchy)

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• Leading:

• 1. How do I handle employees who appear to be low in motivation? (Team, Spirit)

• 2. What is the most effective leadership style in a given situation?

• 3. How different work groups can work like teams?

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• Controlling:

• 1. What type of management information system should we have?

• 2. What activities in the organization need to be controlled? (Attendance)

• 3. How will a specific change affect workers productivity? (technology, process, structure, role)

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• Assurance:

• What is the guarantee that decision when implemented will provide the desire result.

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•Nature of Managerial •Decision Making



2. Non-Programmed decisions making

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Routine, repetitive, well structured situations by use of predetermined decision rules

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• Types of Problems and Situations:• Well-Structured Problems• Straightforward, familiar and easily defined

Involve goals that clear.

Are familiar (have occurred before).

Are easily and completely defined—information about the problem is available and complete.

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• A Policy A general guideline for making a decision about a structured

problem.

• A Procedure A series of interrelated steps that a manager can use to respond

(applying a policy) to a structured problem.

• A Rule An explicit statement that limits what a manager or employee

can or cannot do in carrying out the steps involved in a procedure.

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• Managerial • Decision Making

• Programmed decisions used to address structured problems

• 1. Minimize the need for managers to use discretion

• 2. Facilitate organizational efficiency

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• Programmed Decisions• (Examples)

1. Deciding if student meet graduation requirements.

2. Determine skilled worker’s daily wage.3. Hospital laboratory charges for a test4. Customer want to return a purchased product.5. To re-order kitchen supplies in a restaurant

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• 2. Non-Programmed Decision making

• Pre determined decision rules are impractical due to novel &/or ill structured situations.

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• Types of Problems and Situations:

• Poorly Structured Problems• New, unusual problems for which information is

ambiguous or incomplete

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• Managerial Decision Making

• Non-Programmed Decisions used to address poorly structured problems

• 1. Used a custom-made response• 2. More frequent among higher-level managers

• Few decisions in the real world are fully programmed or non!

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• Non-Programmed Decisions• (Examples)

1. Selection of an architect to design a new manufacturing plant/house.

2. To invest or not, in a new technology?3. To shut down or invest in a money-losing

division?4. To switch from one academic discipline to

another discipline for a better growth?

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• Types of Problems,• Types of Decisions &

• Level in the Organization

Types ofProblems

Non-Programmed

Decisions

Programmed Decisions

Level in Organization

Ill Structured Top

Well Structured Lower

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• 3. The Element of Risk

• Possibility of a chosen decision could lead to losses rather than intended results.

• A situation in which the manager is able to estimate the likelihood (probability) of outcomes that result from the choice of particular alternatives.

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• Manager as • Decision Maker

• Models of Managerial Decisions Making:

• 1. Rational Model

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• Rational Decision-Making Model

External and Internal Environmental Forces

1. Define the Issue 2. Set Goals

3. Search for Alternative Solutions

4. Compare and Evaluate AlternativeSolutions

5. Choose among Alternative Solutions

6. Implement theSolutionSelected

7. Follow up and Control

13–1 nature of managerial decision making decision making situations: 1.programmed decisions...

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