1. Chapter 3: Information and Decision-Making
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Business Leadership: Management Fundamentals John R. Schermerhorn, Jr., Barry Wright, and Lorie Guest
© John Wiley & Sons Canada, Ltd.

2. Managers as problem-solvers
Problem solving:
The process of identifying a ? between actual and desired performance and taking action to resolve it
A decision:
A ? among possible alternative course of action
A performance ? :
Actual performance being less than desired performance
Actual performance being better than desired performance

3. Problem-solving approaches or styles
Problem ? : Inactive in information gathering and solving problems
Problem ? : Reactive in gathering information and solving problems
Problem ? : Proactive in anticipating problems and opportunities and taking appropriate action to gain an advantage

4. Types of thinking Systematic Thinkers ? Intuitive Thinkers ?
Multidimensional Thinkers
Multidimensional thinking applies both ? thinking

5. Programmed decisions
Apply solutions that are readily available from ? to solve structured problems
Structured problems are ones that are ? with respect to information needs
Best applied to ? problems that can be anticipated

6. Nonprogrammed decisions
Develop novel solutions to meet the demands of unique situation that present unstructured problems
Unstructured problems are ones that are full of ? and information ?
Commonly faced by higher-level management

7. Crisis decision-making
A crisis involves an ? that can lead to ? if not resolved quickly and appropriately
Rules for crisis management:
Figure out what is going on
Remember that speed matters
Remember that slow counts, too
Respect the danger of the unfamiliar
Value the skeptic
Be ready to “fight fire with fire”

8. Decision environments
Offer complete information about possible action alternatives and their outcomes
Lack complete information about action alternatives and their consequences, but offer some estimates of probabilities of outcomes for possible action alternatives
Information is so poor that probabilities cannot be assigned to likely outcomes of known action alternatives

9. Figure 3.7 Three environments for managerial decision-making and problem solving

10. Five-step decision-making process?

11. Figure 3.8 Steps in managerial decision- making and problem solving

12. Decision-making process
Step 1: Identify and define the problem
Focuses on information ?, information ?, and deliberation
Decision objectives should be established
Common mistakes in defining problems:
Defining the problem too broadly or too narrowly
Focusing on symptoms instead of causes
Choosing the wrong problem

13. Decision-making process
Step 2: Generate and evaluate possible solutions
Potential solutions are ? and more information is ?, data are ?, the ?and ?of alternative solutions are identified
Approaches for evaluating alternatives:
Stakeholder analysis
Cost-benefit analysis

14. decision-making process
Step 2: Generate and evaluate possible solutions (cont.)
Criteria for evaluating alternatives: ?
Common mistakes:
Selecting a particular solution too ?
Choosing a ? alternative that may have damaging side effects or may not be as good as other alternatives

15. Decision-making process
Step 3: Decide on a preferred course of action
Classical decision model
Managers act rationally in a certain world
Managers face clearly defined problems and have complete knowledge of all possible alternatives and their consequences
Results in an optimizing decision

16. Decision-making process
Step 3: Decide on a preferred course of action (cont.)
Behavioural decision model
Managers act in terms of what they perceive about a given situation
Recognizes limits to human information-processing capabilities

17. Figure 3.9 Differences in the classical and behavioural models of managerial decision making

18. Decision-making process
Step 4: Implement the decision solution
Involves ? to make sure the solution decided upon becomes a reality
Managers need to have ? and ? to ? action plans
Lack-of-participation error should be avoided

19. Decision-making process
Step 5: Evaluate results
Involves comparing ? and ? results
? and ? consequences of chosen course of action should be examined
If actual results fall short of desired results, the manager returns to earlier steps in the decision-making process