Decision-Making Process E. FRANK HARRISON Fifth Edition The Managerial Decision-Making Process

The Managerial Decision-Making Process Fifth Edition Author: E. Frank Harrison, Ph.D. Slides by Monique A. Pelletier, Ph.D.

Values for Decision Making Chapter 4 Values for Decision Making

The Basics Properties of Values Values are acquired early in life. Values are like attitudes, but are more ingrained and permanent. Values differ among individuals. Values govern our perceptions and our behavior. Values facilitate the process of self-evaluation.

The Basics Properties of Values (cont’d) Values comprise a guidance system for decision making. Values permeate the entire process of choice.

Rokeach’s Typology of Human Values Terminal Values l Personal values l Social values Instrumental Values l Competence values l Moral values Managerial Values l Competence values l Personal values

Figure 4.1 A Typology of Human Values Terminal values Instrumental values Personal values Social values Competence values I II Moral values III IV

England’s Study of Managerial Values, No. 1 Operating values l values of greater importance Non operating values l values of lesser importance

England’s Study of Managerial Values, No. 2 Goals of business organizations Personal goals of individuals Groups of people Ideas associated with people Ideas about general topics

Table 4.1 Ranking of Managerial Values by Category Ideas Ideas about Goals of Business Personal Goals Associated General Organizations of Individuals Groups of People with People Topics Organizational efficiency* Achievement* My company* Ability* Change* High productivity* Success* Customers* Ambition* Competition* Profit maximization* Creativity* Managers* Skill* Authority Organizational growth* Job satisfaction* My boss* Cooperation* Caution Industrial leadership* Individuality My subordinates* Aggressiveness Compromise Organizational stability* Money Technical employees* Loyalty Conflict Employee welfare Influence Employees* Trust Conservatism Social welfare Prestige Me* Honor Emotions Autonomy My coworkers* Tolerance Equality Dignity Craftsmen* Prejudice Force Security Owners* Obedience Liberalism Power Stockholders* Compassion Property Leisure White-collar employees* Conformity Rationality Blue-collar workers Religion Government Risk Laborers Labor unions *Operating values of high importance

A Conceptualization of Managerial Values Individual values Organizational values Organizational/Individual values = Managerial values Managerial values are a composite of diminishing individual values and overlapping organizational values

Figure 4.2 Profile of Managerial Values Organizational Values Managerial Values Individual Values

Ethical Behavior Ethics constitute the normative standards for management decision making. In reality, ethics change to fit the attitude of the decision maker and the specific variables in the decision at hand.

Ethical Behavior (cont’d) Therefore, ethics comprise a transitional phenomenon in managerial decision making. Although declaredly normative, ethics are highly subjective and ephemeral. It is tenuous to judge a managerial decision on its ethical merits.

Value Conflicts Value conflicts between the individual and the organization Value conflicts between the organization and society Value conflicts are inevitable at all levels.

Value Conflicts (cont’d) Value conflicts may have favorable or unfavorable consequences. Higher levels of management tend to have fewer value conflicts because they personify the values of the organization.

Value Judgments The term judgment is not synonymous with the term decision. Judgment involves evaluation and categorization. Decision involves commitment and action.

Value Judgments (cont’d) A value judgment is a special type of evaluation or categorization applied to a decision-making situation. Value judgments provide a basis for making and implementing decisions, but they are not a surrogate for any part of the decision-making process.