Copyright © Glencoe/McGraw-Hill Slide 1 of 12 BUSINESS MANAGEMENT Real-World Applications & Connections GLENCOE Section 8.1 What Is Decision Making? In this section: Managers constantly make decisions that affect the futures of their companies. This section discusses: The Importance of Decision Making Factors Influencing Decisions

Copyright © Glencoe/McGraw-Hill Slide 2 of 12 BUSINESS MANAGEMENT Real-World Applications & Connections GLENCOE Section 8.1 What Is Decision Making? What You’ll Learn The two basic ways to make decisions. The six steps to rational decision making. How corporate culture influences decision making. Two value systems that play a part in decision making. The principles of team decision making. The five types of management decision styles.

Copyright © Glencoe/McGraw-Hill Slide 3 of 12 BUSINESS MANAGEMENT Real-World Applications & Connections GLENCOE Section 8.1 What Is Decision Making? Why It’s Important To understand why some businesses succeed and others fail, you will need to understand how management makes decisions.

Copyright © Glencoe/McGraw-Hill Slide 4 of 12 BUSINESS MANAGEMENT Real-World Applications & Connections GLENCOE Section 8.1 What Is Decision Making? Key Terms intuitive decision making rational decision making team decision making

Copyright © Glencoe/McGraw-Hill Slide 5 of 12 BUSINESS MANAGEMENT Real-World Applications & Connections GLENCOE Section 8.1 What Is Decision Making? Different Ways to Make Decisions Intuitive decision making—making decisions based on intuition or hunches. Rational decision making—making decisions based on factual information and logical reasoning.

Copyright © Glencoe/McGraw-Hill Slide 6 of 12 BUSINESS MANAGEMENT Real-World Applications & Connections GLENCOE Section 8.1 What Is Decision Making? Six Basic Steps to Rational Decision Making 1. Recognizing the need for a decision. 2. Determining how to go about making a decision. 3. Gathering information to help make a decision. 4. Identifying possible alternatives. 5. Evaluating each alternative. 6. Selecting the best alternative

Copyright © Glencoe/McGraw-Hill Slide 7 of 12 BUSINESS MANAGEMENT Real-World Applications & Connections GLENCOE Section 8.1 What Is Decision Making? Factors Influencing Decisions Risk in Decision Making. The Importance of Timing The Role of Values Participation in Decision Making Types of Management Decision Styles

Copyright © Glencoe/McGraw-Hill Slide 8 of 12 BUSINESS MANAGEMENT Real-World Applications & Connections GLENCOE Section 8.1 What Is Decision Making? Positive Aspects of Group Decision Making The sum total of the group’s knowledge is greater. The group possesses a wider range of alternatives in the decision process. Participation in the decision-making process increases the acceptance of the decision by group members. Group members better understand the decision and the alternatives considered.

Copyright © Glencoe/McGraw-Hill Slide 9 of 12 BUSINESS MANAGEMENT Real-World Applications & Connections GLENCOE Section 8.1 What Is Decision Making? Fig 2-1 Negative Aspects of Group Decision Styles One individual may dominate and/or control the group. Social pressures to conform can inhibit group members. Competition can develop to such an extent that winning becomes more important than the issue itself. Groups have a tendency to accept the first potentially positive solution while giving little attention to other possible solutions.

Copyright © Glencoe/McGraw-Hill Slide 10 of 12 BUSINESS MANAGEMENT Real-World Applications & Connections GLENCOE Section 8.1 What Is Decision Making? Types of Management Decision Styles Autocratic Semi-autocratic Leading Collaborative Accommodating

Copyright © Glencoe/McGraw-Hill Slide 11 of 12 BUSINESS MANAGEMENT Real-World Applications & Connections GLENCOE Section 8.1 What Is Decision Making? Fact and Idea Review 1.Why is it important for company managers to make good decisions? 2.What are the six basic steps in rational decision making? 3.How does corporate culture influence decision making? 4.What kind of value system does a manager who makes decisions on the basis of customer complaints have? Cont.

Copyright © Glencoe/McGraw-Hill Slide 12 of 12 BUSINESS MANAGEMENT Real-World Applications & Connections GLENCOE Section 8.1 What Is Decision Making? Fact and Idea Review cont. 5.True of False: Team decision making is always preferred to individual decision making. Explain 6.What are the five types of management decision styles?