1. What is Decision Making? Business Management Chapter 8.1

2. Decision Making Hundreds of decisions each day Hundreds of decisions each day Varying levels of importance Varying levels of importance Varying degrees of difficulty Varying degrees of difficulty

3. Ways to Make Decisions Two basic ways Two basic ways Intuitively Intuitively Rationally Rationally

4. Intuitive Decision Making Decisions based on intuition or hunches Decisions based on intuition or hunches Rely on experience / knowledge rather than statistical data Rely on experience / knowledge rather than statistical data Can go against traditional approaches Can go against traditional approaches Often used when time plays a factor Often used when time plays a factor

5. Rational Decision Making Decisions based on factual information and logical reasoning Decisions based on factual information and logical reasoning More scientific than intuitive More scientific than intuitive Relies on quick and effective gathering and analysis of information Relies on quick and effective gathering and analysis of information Many sources are often consulted Many sources are often consulted

6. Brainstorm Think of a decision you made today that was intuitive Think of a decision you made today that was intuitive Think of a decision you made today that was rational Think of a decision you made today that was rational

7. Six Steps to Rational Decisions 1) Recognizing the need for a decision 2) Determining how to make a decision 3) Gathering information to help 4) Identifying possible alternatives 5) Evaluating each alternative 6) Selecting the best alternative

8. Risk, Timing, Values The risk associated with actions can factor into the choice The risk associated with actions can factor into the choice The time frame for making the decision can factor into the choice The time frame for making the decision can factor into the choice The personal values of the decision maker can factor into the choice The personal values of the decision maker can factor into the choice

9. Considerations Manager’s position in the company Manager’s position in the company The company’s corporate culture The company’s corporate culture The employees the manager supervises The employees the manager supervises Resources available to the manager Resources available to the manager

10. Real World Examples What factors and considerations go into deciding whether or not to cancel school for a snow day? What factors and considerations go into deciding whether or not to cancel school for a snow day? What factors and considerations go into deciding whether or not to press charges against a kid shoplifting at your store? What factors and considerations go into deciding whether or not to press charges against a kid shoplifting at your store?

11. Participation in Decision Making “Two heads are better than one.” “Two heads are better than one.” Managers rely on input of team Managers rely on input of team Many companies use team decision making – a group of individuals with different backgrounds assigned to resolve specific problems or issues Many companies use team decision making – a group of individuals with different backgrounds assigned to resolve specific problems or issues

12. Types of Management Decision Styles 1) Autocratic – manager decides alone 2) Semi-autocratic – employee input, but manager decides 3) Leading – manager uses input to lead to decision 4) Collaborative – freely share and discuss possible solutions; manager picks 5) Accomodating – freely share and discuss solutions before choosing one

13. Self-Reflection Which management decision style do you think is most effective? Which management decision style do you think is most effective? If you were the manager, which decision style do you think you would use most often? If you were the manager, which decision style do you think you would use most often? Are there times when different styles are more appropriate than others? Are there times when different styles are more appropriate than others?