Spring 2007Decision Making1

Spring 2007Decision Making2 Approaches to decision making The decision making process Participation Vroom decision tree

Spring 2007Decision Making3 Approaches to Decision Making Pure rationality The economic approach Bounded rationality There are limits on information that can be acquired and processed Satisficing: Picking the first solution that’s “good enough”

Spring 2007Decision Making4 Decision Making Process Evaluate decision quality Identify problem Identify criteria Weight criteria Develop alternatives Analyze alternatives Select alternative Implement solution Feedback

Spring 2007Decision Making5 Criteria for Decision Making Quality of decision Timeliness – how soon must decision be reached Cost of wrong decision Stakeholders -- who has to be considered Certainty vs. risk Long-term vs. short-term

Spring 2007Decision Making6 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

Spring 2007Decision Making7 What is Participation? Aspects of participation Setting goals Making decisions Solving problems Changing the organization Levels of involvement Voice Participation Delegation Fake participation

Spring 2007Decision Making8 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

Spring 2007Decision Making9 Group Decision Making: Level of Group Diversity Decision Quality Decision Speed

Spring 2007Decision Making10 Vroom Decision Tree Decision Criteria Quality Requirement Commitment Requirement Leader’s Information Problem Structure Commitment Probability Goal Congruence Subordinate Conflict Subordinate Information