1. St. Francis Xavier University BSAD 102 Making Decisions

2. Decisions St. Francis Xavier University  “A decision is the action an executive must take when s/he has information so incomplete that the answer does not suggest itself.” Arthur William Radford, February 27, 1896 – August 17, 1973, US Navy Admiral, Commander-in-Chief of the US Pacific Command, and Chairman of the Joint Chiefs of Staff.

3. Objectives and Overview St. Francis Xavier University  To introduce and develop a significant concept for this course and your work as a manager  What is decision-making?  Decision-making skills (Ch 6)  Organization Theory (Ch 7)  Leadership Theory (Ch 9)  Decision-making Constraints  Decision-making and Mike’s Bikes

4. What is decision-making? St. Francis Xavier University  A decision is a “conclusion or resolution reached after consideration” (Oxford).  Decision theory is the “study of strategies for optimal decision-making between options involving different risks or expectations of gain or loss…” (Oxford)  Decisions (may) involve:  Situations of uncertainty (imperfect inputs, constraints)  Reflection process  Choice  Authority/Power  Individual/Group  Outcomes (gain, loss)  Commitment (action, resources)

5. Decision-making Activity St. Francis Xavier University  Winter survival situation (see handout)  In groups of five you must make the following decisions:  What will your group do?  Rank the items according to importance (most important = 1; least important = 12)  How did you make your decision?  Selected group decisions?  Expert recommendations

6. Decision-making St. Francis Xavier University  Decision-making skills (Ch 6)  Define the problem, gather facts, and identify alternative solutions  Evaluate each alternative and select the best one  Generate Options  Develop Decision Criteria  Evaluate Alternatives  Implement the chosen alternative, periodically following up and evaluating the effectiveness of that choice  Specific, action-oriented statements  Action Plan  Evaluate Implementation

7. Organization Theory (Ch 7) St. Francis Xavier University  Organizational Structure  Departmentalization – Functional?  Organizational Hierarchy  Distributing Authority (Does authority lie with group or individual?)  Line – authority flows in a direct chain of command  Staff – authority is based on expertise  Team – authority goes beyond the individual authority possessed by each of its members  Manifested through vote, consensus or individual prerogative?

8. Leadership Theory (Ch 9) St. Francis Xavier University  What types of leader? Patterns of behaviour that a manager exhibits in dealing with subordinates – see p. 272  Autocratic – “do this” – managers generally issue orders and expect them to be obeyed without question (good for rapid decisions or based on expertise)  Democratic – “what should we do?” – managers generally request input from subordinates before making decisions but retain final decision- making power (good for consensus building, sense of contribution and “ownership”)  Laissez-Faire – “do what you think is best” – managers typically serve as advisors to subordinates who are allowed to make decisions; employees may accomplish goals by the means they see fit (good for groups of widely-held expertise and sense of ownership)

9. Decision-making Constraints St. Francis Xavier University  Time (external and internal reality)  Resources  People (quantity, quality)  Money (access and amount)  Information (quality, missing information, assumptions)  Organizational/group dynamics (power, culture, personalities and conflict)  Strategy

10. Conclusion St. Francis Xavier University  Decisions (may) involve:  Situations of uncertainty (imperfect inputs, constraints)  Reflection process  Choice  Authority/Power  Individual/Group  Outcomes (gain, loss)  Commitment (action, resources)

11. Mike’s Bikes Decision-Making St. Francis Xavier University  What is your group’s approach to making decisions?  Decision-making skills (slide 7)  Define the problem, gather facts, and identify alternative solutions  Evaluate each alternative and select the best one  Implement the chosen alternative  Organization and distribution of authority (slide 8)  Organizational Structure: Functional?  Organizational Hierarchy:  Does authority lie with group or individual?  Line – authority flows in a direct chain of command  Staff – authority is based on expertise  Team – authority goes beyond the individual authority possessed by each of its members  Manifested through vote, consensus or individual prerogative?  Leadership style (slide 9) – autocratic, democratic, laissez-faire?  What are the relevant decision-making constraints?

12. Administrivia St. Francis Xavier University  Midterms  Wednesday’s class