Decision Making, Learning, Creativity, and Entrepreneurship chapter seven Copyright © 2014 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin

Learning Objectives 1. Understand the nature of managerial decision making, differentiate between programmed and non-programmed decisions, and explain why non-programmed decision making is a complex, uncertain process. 2. Describe the six steps that managers should take to make the best decisions and explain how cognitive biases can lead managers to make poor decisions. 7-2

Learning Objectives 3. Identify the advantages and disadvantages of group decision making, and describe techniques that can improve it. 4. Explain the role that organizational learning and creativity play in helping managers to improve their decisions. 5. Describe how managers can encourage and promote entrepreneurship to create a learning organization and differentiate between entrepreneurs and intrapreneurs 7-3

The Nature of Managerial Decision Making  Decision Making  The process by which managers respond to opportunities and threats that confront them by analyzing options and making determinations about specific organizational goals and courses of action. 7-4

Decision Making  Programmed Decision  Routine, virtually automatic process  Decisions have been made so many times in the past that managers have developed rules or guidelines to be applied when certain situations inevitably occur 7-5

The Classical Model  Optimum decision  The most appropriate decision in light of what managers believe to be the most desirable future consequences for their organization. 7-6

The Classical Model of Decision Making Figure

Why Information Is Incomplete 7-8 Figure 7.2

Causes of Incomplete Information  Ambiguous Information  Information that can be interpreted in multiple and often conflicting ways. 7-9 Figure 7.3 Young Woman or Old Woman

Six Steps in Decision Making Figure

Group Decision Making  Superior to individual making  Choices less likely to fall victim to bias  Able to draw on combined skills of group members  Improve ability to generate feasible alternatives 7-11

Devil’s Advocacy and Dialectical Inquiry Figure

Organizational Learning and Creativity  Creativity  A decision maker’s ability to discover original and novel ideas that lead to feasible alternative courses of action. 7-13

Senge’s Principles for Creating a Learning Organization 7-14 Figure 7.8

Entrepreneurship and Management  Frequently, founding entrepreneur lacks the skills, patience, and experience to engage in the difficult and challenging work of management 7-15