Principles of Management Learning Session # 17 Dr. A. Rashid Kausar

Re-cap of Session # 16

Managerial Decision Making in POLCA In fact Decision Making is synonymous with Managing. Let us see kind of decisions in POLCA !

Planning: Organizaing: Leading: Controlling: 1.What are the organization’s long-term objectives? 2.What strategies will best achieve those objectives? 3.What should the organization’s short-term objectives be? 4.How difficult should individual goals be? Organizaing: 1.How many employees should I have report directly to me? 2.How should jobs be designed? 3.When should an organization implement a different structure? Leading: 1.How do I handle employees who appear to be low in motivation? 2.What is the most effective leadership style in a given situation? 3.How different work groups can work like teams? Controlling: 1.What type of management information system should we have? 2.What activities in the organization need to be controlled? 3.How will a specific change affect worker productivity? What is the guarentee that my decision making when implemented will prvide the desired results? ( ASSURANCE)

Nature of Managerial Decision Making Decision Making Situations: 1.Programmed decisions Routine, repetitive, well- structured situations by use of pre-determined decision rules.

Managerial Decision Making Types of Problems and Decisions Well-Structured Problems straightforward, familiar, and easily defined

Managerial Decision Making Programmed Decisions used to address structured problems 1.Minimize the need for managers to use discretion 2.Facilitate organizational efficiency

Programmed Decisions 1.Deciding if student meet graduation requirements. 2. Determine skilled worker’s daily wage. 3. Hospital laboratory charges for blood sugar test. 4. Customer wanting to return a purchased product. 5.To re-order kitchen supplies in a restaurant

Nature of Managerial Decision Making 2.Non-programmed Decision Making Pre-determined decision rules are impractical, due to novel and/or ill- structured situations.

Managerial Decision Making Types of Problems and Decisions Poorly-Structured Problems - new, unusual problems for which information is ambiguous or incomplete

Managerial Decision Making Non-Programmed Decisions used to address poorly- structured problems 1. Produce a custom-made response 2. more frequent among higher-level managers Few decisions in the real world are fully programmed or non-!

Non-Programmed Decisions 1.Selection of an architect to design a new manufacturing plant. 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 better growth?

Types Of Problems, Types Of Decisions, & Level In The Organization Top Lower Well-Structured Ill-Structured Type of Problem Non-programmed Decisions Programmed Decisions

Nature of Managerial Decision Making 3.The Element of Risk Possibility that a chosen decision could lead to losses rather than intended results.

Managers as Decision Makers Models of Managerial Decision Making: 1.Rational Model

Rational Decision-Making Model 3. Search for Alternative Solutions 4. Compare and Evaluate Alternative Solutions 1. Define the Issue 2. Set Goals External and Internal Environment Forces 7. Follow up and Control 6. Implement the Solution Selected 5. Choose among Alternative Solutions

Managers as Decision Makers 2.Non-Rational Models Models suggesting info gathering and processing limitations make it difficult for managers to make optimal decisions.