Matakuliah : J0562 / Management Tahun : 2010 Decision Making : The Essence manager’s job Pertemuan 03 (Thrid Meeting)

Learning Outcome Student should be able to explain The decision making process, the manager As decision maker -> C3

Learning Outline The Manager as Decision Maker The Decision Making Process The Manager as Decision Maker Decision Making for Today’ World

The Decision Making Process Identification of a problem Identification of Decision Creteria Alocation of Weights to Creteria Development of Alternatives Analysis of Alternatives Selection of an Alternatives Implementation of the Altrnatives Evaluation of Decision Effectiveness

Decision Choice from two or more alternatives Decision-making Decision-making Process A set of eight steps that include identifying a problem, selecting an alternatives, and evaluating the decision’s effectiveness Problem A discrepancy between an existing and a desired state of affairs A decision-making process begins with the existence of a problem

Step 1 : identifying a Problem step 2 :identifying decision criteria step 3 : allocation weights to creteria step 4 : developing alternatives step 5 : analyzing alternatives step 6 : selecting an alternative step 7 : implementing the alternative step 8 : evaluating decision effectiveness My sales reps need new computers! Memory and storage 10 Display quality 3 Battery life 8 Warranty 4 Carrying weight 6 Toshiba , HP, Sony, Dell, Apple, lenovo Assessed values of laptop computers using decision criteria and next evaluation of laptop alternatives against weighted creteria Toshiba * Toshiba Evaluation

The Manager as Decision Maker Leading How do I handle employees who appear to be low in motivation ? What is the most effective leadeership style in a given situation ? How will a specific change affect worker productivity ? When is the right time to stimulate conflict ? Controlling What activity in the oganization need to be controlled ? How should those activities be controlled ? When is a performance deviation significant ? What type of maangement information system should the organization have ? Planning what are the organization’s long term objectives ? What strategies will best achive those objectives ? What should the organization’s short term objectives be ? How difficult should individual goals be? Organizing How many employees should I have report directly to me ? How much centralization should there be in the organization ? How should jobs be designed ? When should the organization implement a different structure ?

Making Decisions : Rationality, Bounded Rationality and Intuition Rational decision making Decision making behavior where choices are consistent and value maximizing within specified constraints Bounded rationality Decision making behavior that’s rational, but limited (bounded) by an individual’s ability to process information

Intuition Intuituion Values or ethics based decisions Experience based decisions Affect initiated decisions Cognitive based decisions Sub conscious mental processing

Decision-making Conditions Certainty A situation in which a manager can make accurate decisions because all outcomes are known Risk A situation in which the decision maker is able to estimate the likehood of certain outcomes Uncertainty A situation in which a decision maker has neither certainty nor reasonable probability estimates available

Decision making Styles analytic conceptual directive behavior

Decision making biases and errors Decision making error and biases overconfidence hindsight Self-serving Sunk costs randomness representation availabilty framing confirmation Selective perception Anchoring effect Immediate gratification

Decision making for today’s world Understand cultural differences Know when it’s time to call quits Do use an effective decision making process