Pengambilan Keputusan Chapter 26 Mata kuliah: J Pengelolaan Organisasi Entrepreneurial Dosen Pembuat: D Rudy Aryanto Tahun : 2009

Learning Objectives –Define the terms programmed decision and nonprogrammed decision –Describe the process of decision making –Discuss the major behavioral influences on the process of decision making –Compare group decision making and individual decision making –Identify the methods managers can use to stimulate creativity in group decision making

Decision Making The quality of managerial decisions is the yardstick of a manager’s effectiveness

Decision Making This chapter analyzes decision making as a consequence of information people receive through the… –Organizational structure –Behavior of important persons –Behavior of important groups

Types of Decisions Programmed decisions –Specific procedures developed for repetitive and routine problems. Nonprogrammed decisions –Required by unique and complex management problems

Decision Type Comparison

Decision Making Decision – Means to achieve some result or to solve some problem. Every decision is the outcome of a process that is influenced by many forces.

The Decision-Making Process Establishing specific goals & objectives and measuring results Identifying problems Developing alternatives Choosing an alternative Implementing the decision Controlling and evaluating Evaluating alternatives Revise

Goals, Objectives, & Evaluation Goals and objectives are needed wherever performance influences effectiveness –Which results must be achieved? –Which measures show if those results have been achieved? Top management must communicate tolerance for experimentation and failure by subordinates

Identifying Problems A necessary condition for a decision is a problem

Identifying Problems Identifying the exact problem can be hindered by certain factors –Perceptual problems –Defining problems in terms of solutions –Identifying symptoms as problems

Developing Alternatives Before a decision is made… –Feasible alternatives should be developed –The consequences of each considered The number of alternatives developed is limited by time and cost constraints –Too few alternatives can wind up costing even more time and resources Scenario analysis lets managers… –Compensate for tunnel vision –Uncover more alternatives

Evaluating Alternatives The objective of decision making –Selecting the alternative that will produce the most favorable outcome The alternative-outcome relationship is based on three possible conditions –Certainty –Uncertainty –Risk

Choosing an Alternative An alternative is selected to solve a problem in order to achieve a predetermined objective –An alternative rarely achieves the objective without having an impact on another objective The values of the decision maker strongly influence the alternative chosen The decision maker is often a satisfier, rather than an optimizer –It is often impossible to identify all alternatives

Implementing the Decision Any decision that is not implemented is just an abstraction –Implementation may be more important than the actual choice of the alternative Implementing decisions almost always involves people –A technically sound decision can be undermined by dissatisfied subordinates –Solutions must be transformed into behavior

Control and Evaluation Effective management involves periodic measurement of results –Without a measurable objective, there is no way to judge performance Changes, if necessary, must be made in –The solution chosen –Its implementation –The original objective Once a decision is implemented, don’t assume the outcome will meet the objective

Behavioral Influences on Decision Making These factors influence the decision-making process… –Ethics –Values –Personality –Propensity for risk –Potential for dissonance –Escalation of commitment

Ethical Decision Making Ethics helps individuals evaluate alternatives in terms of right and wrong Unethical decisions and behavior can lead to: –Distrust –Conflict –A less productive work environment

Workplace Misconduct Common types of misconduct –Lying to supervisors –Drug or alcohol abuse –Lying or falsifying records –Conflicts of interest –Stealing or theft –Misrepresenting information to supervisors

Factors that exert influence over ethical decisions… –Gender –Moral philosophy –Education –Work experience –Age –Awareness Factors Influencing Ethical Decisions

On the group level… –Significant others within the organization influence peers and coworkers At the organizational level… –Culture and climate directly influence individual decision making A code of ethics raises employees’ awareness of ethical behavior

Instilling Ethical Values Texas Instruments suggests that managers think before acting: –Is the action legal? –Does it comply with our values? –If you do it, will you feel bad? –How will it look in the newspaper? –If you know it’s wrong, don’t do it! –If you’re not sure, ask. –Keep asking until you get an answer

Values and Decision Making Values have a profound impact on: –Establishing objectives –Developing alternatives –Choosing an alternative –Implementing a decision –Control and evaluation

Personality and Decision Making Three types of variables effect the decision making process: –Personality variables: the attitudes, beliefs, and needs of the individual –Situational variables: external, observable situations in which individuals find themselves –Interactional variables: the individual’s momentary state that results from the interaction of a specific situation with the individual’s personality

Personality and Decision Making Conclusions about the influence of personality on decision-making –One person is unlikely to be equally proficient in all aspects of the decision-making process –Characteristics, like intelligence, are linked with different phases of the decision-making process –The relationship of personality to the decision- making process may vary for different groups –Those facing important and ambiguous decisions may be influenced heavily by peers’ opinions

Propensity for Risk Decision makers with low aversion to risk –Establish different objectives –Evaluate alternatives differently –Select different alternatives There is a fine line between –Making ill-conceived, arbitrary decisions based on instinct (low aversion) –Becoming obsessed with numbers, analyses, and reports (high aversion)

Propensity for Risk The amount of risk in a decision depends on answers to these questions –Have clear goals been established? –Is information about possible alternatives known? –Have future outcomes associated with the possible alternatives been identified?

Framework for Classifying Decisions Characteristics of DecisionCertaintyRiskUncertainty Goals are clearly establishedYes Information about possible alternatives is available Yes No Future outcomes associated with the alternative are understood Yes No LowHigh Probability of Failure

Potential for Dissonance Dissonance is post-decision anxiety –There is often a lack of consistency, or harmony, among an individual’s cognitions after a decision is made –The decision maker has doubts and second thoughts about the choice

Potential for Dissonance Intensity of the anxiety is greater under these conditions –The decision is psychologically and/or financially important –There are a number of forgone alternatives –The forgone alternatives have many favorable features

Potential for Dissonance Dissonance can be reduced by… –Seeking information that supports the wisdom of the decision –Selectively perceiving information in a way that supports the decision –Adopting a less favorable view of forgone alternatives –Minimizing the negative aspects of the decision and exaggerating the positive aspects

Escalation of Commitment Occurs when a decision maker adheres to a course of action –Even when confronted with negative information about the viability of that course of action

Escalation of Commitment Self-justification theory –Decision makers escalate commitment because they don’t want to admit that prior resources were not allocated properly –They do not want to admit they were wrong Self-monitoring and feedback reduce potential cognitive distortion

Group Decision Making Becoming more common because… –Nonprogrammed decisions involve more uncertainty –Increasing complexity requires specialized knowledge in numerous fields –Decisions must eventually be accepted and implemented by many units within the organization

Individual vs. Group Decision Making Groups –Take longer to reach decisions –Consensus decisions superior to individual, majority vote, and leader decisions Negative aspects –Pressure to conform –Reluctance to accept outside assistance –Best results with nonprogrammed decisions

Individual vs. Group Decision Making Establishing objectives –Groups are superior to individuals because of the greater pool of knowledge Identifying alternatives –Efforts of individual group members encourage a broad search in various functional areas of the organization Evaluating alternatives –Collective judgment of the group, with its wider range of viewpoints, is superior to that of the individual decision maker

Individual vs. Group Decision Making Choosing an alternative –Group interaction and consensus results in the acceptance of more risk –A group decision is more likely to be accepted due to the participation of those affected by its consequences Implementing a decision –Usually accomplished by individual managers

Relationship Between Quality of Group Decision and Method Utilized More Less Probable Quality of Decision Individual Average Individual Minority Control Majority control Consensus Method of Utilization of Group Resources

Stimulating Group Creativity Brainstorming Delphi Process Nominal Group Technique (NGT)

Brainstorming Promotes creativity by encouraging idea generation through non-critical discussion Basic rules –No idea is too ridiculous –Each idea presented belongs to the group, not to the person stating it –No idea can be criticized

Delphi Process Involves… –Soliciting and comparing anonymous judgments on the topic of interest –Uses sequential questionnaires interspersed with summarized information and feedback from earlier responses Advantages of this process –Removes the biasing effects of face-to-face interaction –Multiple judges Studies show no significant change after the second round of estimation

Nominal Group Technique (NGT) –7-10 people convene to solve a problem –Each person generates ideas in writing –After 5 minutes, each person presents one idea –A designated recorder writes the ideas on a flip chart in full view of the group –This continues until there are no more new ideas –There is no discussion –Each person privately ranks the ideas in order of preference –The group decision is the mathematically pooled outcome of the votes

Delphi Process vs. NGT Delphi Participants are typically anonymous Participants are physically distant and never meet Communication is via written questionnaires and feedback NGT Participants become acquainted Participants meet face- to-face around a table Participants communicate directly