Decision Making Approaches to decision making The decision making process Participation Vroom decision tree

Approaches to Decision Making Rational Bounded rationality: Limits on information that can be processed Satisficing: Picking the first solution that’s “good enough”

Decision Making Process Evaluate decision quality Identify problem Identify criteria Weight criteria Develop alternatives Analyze alternatives Select alternative Implement solution Feedback

Criteria for Decision Making Quality of decision Timeliness Cost Stakeholders -- who has to be considered Certainty vs. risk

Programmed vs. Nonprogrammed Decisions Programmed decision One that is made regularly Structures problems (clear problem, obvious criteria) Pre-set rules, policies, procedures Efficiency Non-programmed decision One-time More “important” problem

What is Participation? Aspects of Participation Setting Goals Making Decisions Solving Problems Changing the Organization Levels of Involvement Voice Participation Delegation Fake Participation

Participation: Pro and Con Pro It works….. Better information Decision acceptance (more motivation) Better for employees Basic individual needs (self-actualization, autonomy, etc.) Social needs (group decision-making) Con It doesn’t work….. Information may be centralized Need for rapid response It’s not necessary Assigned goals enough Employees may not be interested

Vroom Decision Tree Decision Criteria Decision Quality Commitment Requirement Leader’s Information Problem Structure Commitment Probability Goal Congruence Subordinate Conflict Subordinate Information

Decision Making and Ethical Perspectives How do we make ethical decisions? Sources of ethical beliefs

Sources of Ethical Beliefs Basic human values Reciprocity Altruism Institutional sources Religion Philosophy The environment Cultural experience Law

World Religions Source:

“Every religion emphasizes human improvement, love, respect for others, sharing other people's suffering. On these lines every religion had more or less the same viewpoint and the same goal.” -- The Dalai Lama Source: The Golden Rule

The World of Islam On the day of judgment, the honest Muslim merchant will stand side by side with the martyrs - The Prophet Mohammed

Moral Values in the Work Setting: Islam Prohibition on charging interest Lending fees Leasing Share of a bank’s profits rather than interest Investment (Syariah principles) operations based on riba (interest) such as banking or finance companies Gambling Manufacture and/or sale of haram (forbidden) products such as liquor, non-halal meats and pork; and Elements of gharar (uncertainty) such as conventional insurance

Philosophers Asia Is it religion or philosophy Is this even a valid distinction Western philosophers: A long tradition Classical thinkers Theologians Enlightenment philosophers Writers in other areas (politics, social issues)

Socrates and Plato Socrates (470 BC – 399 BC) Virtue is knowledge of what is good Virtue has an existence of its own; we know what is good without being told Virtue cannot be taught If one knows what is good, one will act virtuously Plato (428 BC – 348 BC) Platonic forms – Pure, eternal and unchanging ideas, that exist independently Differs from Socrates, in that Plato believed that virtue could be taught

Aristotle (384 BC – 322 BC) Virtue is fulfilling a function Virtue comes from strength of character Virtue involves both feeling and action Virtue is innate, but also requires training and practice to form proper habits

Theologians St. Augustine (354 AD – 430 AD) Influenced by Plato and Platonic philosophers (merged classical and Christian thought) Every work of God is good; evil comes from mankind and the freedom they have to choose (also, original sin) Evil does not have an independent existence (the Manichæan heresy) St. Thomas Aquinas ( ) Influenced by Aristotle Mankind aspires to goodness Goodness or virtue requires the exercise of reason

Others Niccolò Machiavelli ( ) Herbert Spencer (1820 –1903) Social Darwinism Friedrich Nietzsche (1844 – 1900) The great man can make his own rules

Niccolò Machiavelli The Prince Bad reputation today, but also a very pragmatic thinker What actually occurred versus what actually worked: …the gulf between how one should live and how one does live is so wide that a man who neglects what is actually done for what should be done learns the way to self-destruction rather than self-preservation (XV) The end -- stable rule -- justifies the means: …a prince, and especially a new prince cannot observe all those things which give men a reputation for virtue, because in order to maintain his state, he is often forced to act in defiance of good faith, of charity, of kindness, of religion (XVIII)

Enlightenment Philosophers In general, these people separated theology and philosophy Immanuel Kant (1724 – 1804) Deontology What are one’s duties? Jeremy Bentham (1748 – 1832) Teleology Utilitarianism (greatest good to the greatest number) John Locke (1632 – 1704) Social contract Natural rights of mankind “The right of life, liberty, and the pursuit of happiness”

Teleology Teleological (or consequential) ethical systems are concerned with the consequences of an act rather than the act itself. It includes act-utilitarianism, where one’s goal is to identify the consequences of a particular act to determine whether it is right or wrong, and rule-utilitarianism, which requires one to adhere to all the rules of conduct by which society reaps the greatest value. In sum, the principle to be followed for utilitarian is the greatest good for the greatest number.

Deontology Deontological ethical systems hold that a person renders ethical decisions if he or she acts based on what is right, regardless of the consequences of the decision. In this formalistic view of ethics, what is right is based on the categorical imperative, which is the notion that every person should act on only those principles that he or she, as a rational person, would prescribe as universal laws to be applied to the whole of humankind.

Social Contracts How can society best be structured and regulated? Governments are based on the "social contract“ Reciprocal obligations that can be changed