Mgmt 371 Chp 9 Notes
Chapter 9: Managerial Decision Making
Types of decisions and problems
Decision- choice made from available alternatives
Decision making- process of identifying problems and opportunities and then resolving them
Programmed and Non programmed decisions
Programmed decisions- involve situations that have occurred often enough to enable decision rules to be developed and applied in the future
Made in response to recurring organizational problems
Ex-types of skills required to fill certain jobs, reorder or manufacturing inventory, selection of freight routes for product deliveries
Non programmed decisions- made in response to situations that are unique, poorly defined and largely unstructured, and have important consequences for the organization
One primary difference between programmed and on programed decisions relates to the degree of certainty or uncertainty that managers deal with in making decisions
Certainty- means that all the info the decision maker needs is fully available
Managers have info on operating conditions, resource costs, or constraints and each course of action and possible outcome
Risk- means that a decision has clear-cut goals and that good info is available, but the future outcomes associated with each alternative are subject to chance
Uncertainty- means that managers know which goals they wish to achieve, but info about alternatives and future events is incomplete
Factors that affect decisions-price, production costs, volume or future interest rates are difficult to analyze and predict
Ambiguity- (most difficult decision situation)- means that the goals to be achieved or the problem to be solved in unclear, alternatives are difficult to define, and info about outcomes is unavailable
Highly ambiguous situation-can create “wicked decision problem” (most difficult decision situations managers can face)-
Ofter associated with conflicts over goals and decision alternatives, rapidly changing circumstances, fuzzy info, unclear links
Types of decisions and problems
Decision- choice made from available alternatives
Decision making- process of identifying problems and opportunities and then resolving them
Programmed and Non programmed decisions
Programmed decisions- involve situations that have occurred often enough to enable decision rules to be developed and applied in the future
Made in response to recurring organizational problems
Ex-types of skills required to fill certain jobs, reorder or manufacturing inventory, selection of freight routes for product deliveries
Non programmed decisions- made in response to situations that are unique, poorly defined and largely unstructured, and have important consequences for the organization
One primary difference between programmed and on programed decisions relates to the degree of certainty or uncertainty that managers deal with in making decisions
Certainty- means that all the info the decision maker needs is fully available
Managers have info on operating conditions, resource costs, or constraints and each course of action and possible outcome
Risk- means that a decision has clear-cut goals and that good info is available, but the future outcomes associated with each alternative are subject to chance
Uncertainty- means that managers know which goals they wish to achieve, but info about alternatives and future events is incomplete
Factors that affect decisions-price, production costs, volume or future interest rates are difficult to analyze and predict
Ambiguity- (most difficult decision situation)- means that the goals to be achieved or the problem to be solved in unclear, alternatives are difficult to define, and info about outcomes is unavailable
Highly ambiguous situation-can create “wicked decision problem” (most difficult decision situations managers can face)-
Ofter associated with conflicts over goals and decision alternatives, rapidly changing circumstances, fuzzy info, unclear links