1. Chapter 7 PROBLEM ANALYSIS AND DECISION MAKING

2. 2 Supervision Today! 6 th Edition Robbins, DeCenzo, Wolter © 2010 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Chapter Outcomes List the 7 steps in the decision-making process. Describe expected value analysis. Explain the four types of decision styles. Identify and explain the common decision-making errors. Describe the two types of decision problems and the two types of decisions that are used to solve them. Compare and contrast group decision-making and individual decision-making. List and describe three techniques for improving group decision-making. Explain three different ethical viewpoints.

3. 3 Supervision Today! 6 th Edition Robbins, DeCenzo, Wolter © 2010 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. EXHIBIT 7–1 The decision-making process.

4. 4 Supervision Today! 6 th Edition Robbins, DeCenzo, Wolter © 2010 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. EXHIBIT 7–4 Payoff table for ski jacket decision.

5. 5 Supervision Today! 6 th Edition Robbins, DeCenzo, Wolter © 2010 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. EXHIBIT 7–5 Decision tree and expected values for renting a large or small retail space.

6. 6 Supervision Today! 6 th Edition Robbins, DeCenzo, Wolter © 2010 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Conditions of decision-making Certainty Risk Uncertainty

7. 7 Supervision Today! 6 th Edition Robbins, DeCenzo, Wolter © 2010 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Decision tools Expected value analysis Decision tree Marginal analysis

8. 8 Supervision Today! 6 th Edition Robbins, DeCenzo, Wolter © 2010 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. EXHIBIT 7–6 Decision-style model.

9. 9 Supervision Today! 6 th Edition Robbins, DeCenzo, Wolter © 2010 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Common errors in decision-making Availability heuristic Representative heuristic Escalation of commitment

10. 10 Supervision Today! 6 th Edition Robbins, DeCenzo, Wolter © 2010 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Advantages of group decisions Provides more complete information Generates more alternatives Increases solution acceptance Increases legitimacy

11. 11 Supervision Today! 6 th Edition Robbins, DeCenzo, Wolter © 2010 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Disadvantages of group decision-making Time-consuming Minority domination Pressure to conform Ambiguous responsibility

12. 12 Supervision Today! 6 th Edition Robbins, DeCenzo, Wolter © 2010 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Improving group decision-making Brainstorming Nominal group technique Electronic meetings

13. 13 Supervision Today! 6 th Edition Robbins, DeCenzo, Wolter © 2010 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Common rationalizations of unethical behavior “It’s not really illegal or immoral.” “It’s in my (or the organization’s) best interest.” “No one will find out.” “Since it helps the organization, the organization will condone it and protect me.”

14. 14 Supervision Today! 6 th Edition Robbins, DeCenzo, Wolter © 2010 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Three views on ethics Utilitarian view Rights view Justice view

15. 15 Supervision Today! 6 th Edition Robbins, DeCenzo, Wolter © 2010 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. EXHIBIT 7–8 Three views on ethics.