1. 4.1

2. LEARNING OBJECTIVES EVALUATE SCHOOLS OF MANAGEMENT THINKINGEVALUATE SCHOOLS OF MANAGEMENT THINKING DESCRIBE LEVELS, TYPES, STAGES OF DECISION MAKINGDESCRIBE LEVELS, TYPES, STAGES OF DECISION MAKING COMPARE INDIVIDUAL & ORGANIZATIONAL DECISION MAKINGCOMPARE INDIVIDUAL & ORGANIZATIONAL DECISION MAKING* 4.2

3. LEARNING OBJECTIVES ASSESS CHANGING MANAGEMENT PROCESSASSESS CHANGING MANAGEMENT PROCESS EXPLAIN HOW INFO SYSTEMS AID MANAGERS & DECISION MAKINGEXPLAIN HOW INFO SYSTEMS AID MANAGERS & DECISION MAKING* 4.3

4. MANAGEMENT CHALLENGES WHAT MANAGERS DOWHAT MANAGERS DO INTRODUCTION TO DECISION MAKINGINTRODUCTION TO DECISION MAKING INDIVIDUAL MODELS OF DECISION MAKINGINDIVIDUAL MODELS OF DECISION MAKING HOW INFORMATION TECHNOLOGY HAS CHANGED MANAGEMENT PROCESSHOW INFORMATION TECHNOLOGY HAS CHANGED MANAGEMENT PROCESS* 4.4

5. THREE MANAGEMENT THEORIES TECHNICAL - RATIONAL “Classical”TECHNICAL - RATIONAL “Classical” BEHAVIORALBEHAVIORAL COGNITIVECOGNITIVE* 4.5

6. THREE MANAGEMENT THEORIES TECHNICAL - RATIONAL “Classical”: EMPHASIZES PRECISION OF TASKEMPHASIZES PRECISION OF TASK ORGANIZES TASKS INTO JOBSORGANIZES TASKS INTO JOBS ORGANIZES JOBS INTO PRODUCTION SYSTEMSORGANIZES JOBS INTO PRODUCTION SYSTEMS* 4.6

7. THREE MANAGEMENT THEORIES BEHAVIORAL: EMPHASIZES ORGANIZATION’S ADAPTATION TO EXTERNAL, INTERNAL ENVIRONMENTEMPHASIZES ORGANIZATION’S ADAPTATION TO EXTERNAL, INTERNAL ENVIRONMENT* 4.7

8. THREE MANAGEMENT THEORIES COGNITIVE: EMPHASIZES LEARNING & APPLYING KNOW-HOW, KNOWLEDGEEMPHASIZES LEARNING & APPLYING KNOW-HOW, KNOWLEDGE HOW WELL MANAGERS PROVIDE MEANING TO NEW SITUATIONSHOW WELL MANAGERS PROVIDE MEANING TO NEW SITUATIONS* 4.8

9. EVOLUTION OF MANAGEMENT THEORY CLASSICAL (1880-1927)CLASSICAL (1880-1927) CONTEMPORARY (1930-1962)CONTEMPORARY (1930-1962) POSTMODERN (1965 - present)POSTMODERN (1965 - present)* 4.9

10. CLASSICAL PERIOD: TECHNICAL-RATIONAL VIEWTECHNICAL-RATIONAL VIEW TIME & MOTION STUDIESTIME & MOTION STUDIES SCIENTIFIC MANAGEMENTSCIENTIFIC MANAGEMENT Planning, organizing, coordinating, deciding, controlling * 4.10

11. CONTEMPORARY PERIOD: SOCIAL PSYCHOLOGISTSSOCIAL PSYCHOLOGISTS SOCIOLOGISTSSOCIOLOGISTS ORGANIZATIONAL BEHAVIORISTSORGANIZATIONAL BEHAVIORISTS Emphasized individual collective behavior * 4.12

12. POSTMODERN PERIOD: ECONOMISTSECONOMISTS SOCIOLOGISTSSOCIOLOGISTS MANAGEMENT THEORISTSMANAGEMENT THEORISTS Emphasizes knowledge basis of organizations * 4.12

13. BEHAVIORAL MODEL OF MANAGEMENT: High-volume; high-speed work Variety; fragmentation; brevity Speculation; hearsay; gossip Complex web of interactions; contacts Prefer verbal media Control agenda * 4.13

14. MANAGERIAL ROLES (Mintzberg): Interpersonal: figureheads & leaders Informational: receive; disseminate critical info Decisional: initiate activities; handle disturbances; allocate resources; negotiate conflicts * 4.14

15. Wrapp’s SUCCESSFUL MANAGER: OPERATING PROBLEMS GENERAL MANAGER OPERATING DECISIONS CORPORATE STRATEGY 4.15

16. COGNITIVE PERSPECTIVE ORGANIZATION: Is knowing, sentient organismIs knowing, sentient organism Can “learn” & “know”Can “learn” & “know” Success depends on learning- & knowledge processing infrastructureSuccess depends on learning- & knowledge processing infrastructure Two schoolsTwo schools* 4.16

17. 1. MANAGERIAL SENSE-MAKING: MANAGERS: Create mental mapsCreate mental maps Are problem solvers, decision makersAre problem solvers, decision makers Are information processorsAre information processors Create & support information processingCreate & support information processing* 4.17

18. 2. KNOWLEDGE-BASED VIEW OF FIRM: KNOWLEDGE: Central productive / strategic assetCentral productive / strategic asset Explicit (codified); Tacit (know-how)Explicit (codified); Tacit (know-how) Includes information, social relations; know-how; skillsIncludes information, social relations; know-how; skills Change based on new informationChange based on new information Firm creates value by integrating specialized knowledgeFirm creates value by integrating specialized knowledge Strategy: Develop core competenciesStrategy: Develop core competencies* 4.18

19. LEVELS OF DECISION MAKING STRATEGIC: Long-term objectives; resources; policiesSTRATEGIC: Long-term objectives; resources; policies MANAGEMENT CONTROL: Monitor use of resources; performanceMANAGEMENT CONTROL: Monitor use of resources; performance KNOWLEDGE-LEVEL: Evaluate potential innovations; knowledgeKNOWLEDGE-LEVEL: Evaluate potential innovations; knowledge OPERATIONAL: How to carry out specific day-to-day tasksOPERATIONAL: How to carry out specific day-to-day tasks* 4.19

20. TYPES OF DECISIONS STRUCTURED: Repetitive; routine; definite procedure; certaintySTRUCTURED: Repetitive; routine; definite procedure; certainty SEMISTRUCTURED: One or more factors not structured; riskSEMISTRUCTURED: One or more factors not structured; risk UNSTRUCTURED: Unique; non- routine; uncertainty; requires judgmentUNSTRUCTURED: Unique; non- routine; uncertainty; requires judgment* 4.20

21. INFO SYSTEMS, LEVELS, DECISIONS TPS OAS MIS KWS DSS ESS ORGANIZATIONAL LEVEL TYPE OF DECISIONOPERATIONALKNOWLEDGEMANAGEMENTSTRATEGIC STRUCTURED ACCOUNTS RECEIVABLE ELECTRONIC PRODUCTION SCHEDULING COST OVERRUNS SEMI-BUDGET STRUCTUREDPREPARATION PROJECT SCHEDULING FACILITY LOCATION UNSTRUCTUREDPRODUCT DESIGN NEW PRODUCTS NEW MARKETS 4.21

22. STAGES OF DECISION MAKING INTELLIGENCE: Collect information; identify problemINTELLIGENCE: Collect information; identify problem DESIGN: Conceive alternatives; select criteriaDESIGN: Conceive alternatives; select criteria CHOICE: Use criteria to evaluate alternatives; selectCHOICE: Use criteria to evaluate alternatives; select IMPLEMENTATION: Put decision into effect; allocate resources; controlIMPLEMENTATION: Put decision into effect; allocate resources; control* SOURCE: Simon, The New Science of Management Decision (1960) 4.22

23. RATIONAL: Comprehensive rationality; evaluate all alternativesRATIONAL: Comprehensive rationality; evaluate all alternatives SATISFICING: Bounded rationality; choose first “good” alternativeSATISFICING: Bounded rationality; choose first “good” alternative MUDDLING: Successive comparison; marginal changesMUDDLING: Successive comparison; marginal changes PSYCHOLOGICAL: Cognitive types; manages differ in how they make choicesPSYCHOLOGICAL: Cognitive types; manages differ in how they make choices* INDIVIDUAL MODELS OF DECISION MAKING 4.23

24. RATIONAL ACTOR: Maximize organization’s benefitsRATIONAL ACTOR: Maximize organization’s benefits BUREAUCRATIC: Follow standard operating procedures (SOP)BUREAUCRATIC: Follow standard operating procedures (SOP) POLITICAL: Key groups compete and bargainPOLITICAL: Key groups compete and bargain “GARBAGE CAN”: Organizations not rational; solutions accidental“GARBAGE CAN”: Organizations not rational; solutions accidental* ORGANIZATIONAL MODELS OF DECISION MAKING 4.24

25. Connect to the INTERNET PRESS LEFT MOUSE BUTTON ON ICON TO CONNECT TO THE LAUDON & LAUDON WEB SITE FOR MORE INFORMATION ON THIS CHAPTER 4.25

26. 4.26