LANGUAGE it is not unusual for citizen of different countries to speak more than one language

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INTRODUCTION TO

MANAGEMENT

Subarjo Joyosumarto SE, MA, Ph.D 23 Januari 2017

Meeting 3: Overview of Meeting 2 Chapter 7. Decision-Making

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Overview of Meeting 2

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Facts on global environment

LANGUAGE

it is not unusual for citizen of diferent countries to speak more

than one language

FOOD

Food consumed around the world are similar

TRAVEL

Citizen from a nation tends to travel across the

globe easily

BUSINESS

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REGIONAL TRADING ALLIANCES

4

NAFTA

North America Free Trade Agreement:

U.S.A, Canada, Mexico; Elimination of barriers to free trade strengthen the economic power of 3 continents

EURO

The European Union:

The 12 regional members motivated to

reassert the economic position against the U.S. and Japan

THE ASEAN ECONOMIC CUMMUNITY

the ten nations allows good, skilled

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MANAGING IN GLOBAL ENVIRONMENT

THE POLITICAL / LEGAL ENVIRONMENT

The stability of politics and laws allows the accurate predictions. Managers must stay informed of the specifcs laws in countries where they do business

THE ECONOMIC ENVIRONMENT

Global managers must be aware of economic issues when doing business in other countries. It is important to understand the type of economic system, it is free market or planned economy

THE CULTURAL ENVIRONMENT

Managing today talented global workforce can be challenged. The employee productivity is diferent from country to country. Japan and Korea usually have very high productivity and competitive manner

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FIVE DIMENSION OF NATIONAL CULTURE

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FIVE DIMENSION OF NATIONAL CULTURE

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CHAPTER 7. DECISION-MAKING

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DECISION-MAKING PROCESS

9

1.

Identifying

a Problem 2.

Identifying a Decision Criteria 3. Allocating weights to Criteria 4. Allocating weights to Criteria 5. Analyzing Alternatives 6. Selecting an Alternative 7. Implementin g the Alternative 8. Evaluating Decision Efectiveness THE DECISION MAKING PROCESS

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DECISION-MAKING PROCESS

10 10 1. Identifying a Problem _2. Identifying a Decision Criteria 3. Allocating weights to Criteria 4. Allocating weights to Criteria 5. Analyzing Alternatives 6. Selecting an Alternative 7. Implementing the Alternative 8. Evaluating Decision Efectiveness THE DECISION MAKING PROCESS

DECISION : a choice among two or more alternatives

Step 1: Identifying Problem Problem :

• _{Is a discrepancy between existing}

and desired condition

• _{Becomes an obstacle that makes it}

difcult to achieve desired goals or purpose

Managers have to identify :

• _{What's happening}

• _{Why it happens}

Eg. Amanda is a sales manager

Sales have declined, the laptops have been outdated and inadequate for doing their jobs

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DECISION-MAKING PROCESS

Step 2: Identifying Decision Criteria

Decision criteria is criteria that defnes

what’s important or relevant to resolving a problem

E.g. Amanda identifes that for the laptops:

• _{storage capabilities,}

• _{display quality,}

• _{battery life,}

• _warranty,

• _{carrying weight}

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DECISION-MAKING PROCESS

Step 3: Allocating Weights To The Criteria

The relevant criteria aren’t equally

important, the decision maker must weigh the items in order to give them the correct priority in the decision

E.g. Amanda gives weight to the criteria as follows:

• _{Memory and storage 10}

• _{Battery life} ₈

• _{Carrying weight 6}

• _Warranty ₄

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DECISION-MAKING PROCESS

Step 4: Developing Alternatives

Decision maker makes a list of viable alternatives that could resolve the

problem.

The alternatives are only listed, not evaluated yet

E.g. Amanda makes a lists of alternatives:

Company Memory and storage Battery life Carryi ng weigh t Warra

nty Display quality

HP ProBook 10 3 10 8 5

Dell

Inspirion

10 7 8 6 7

Lenovo 8 5 7 10 10

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DECISION-MAKING PROCESS

Step 5: analyzing Alternatives

Evaluate each one alternative, by using criteria established in step 3, multiply by weight on step 4

E.g. Amanda makes a lists:

Company Memory and storage Battery life Carryi ng weigh t Warra

nty Display quality Total

HP ProBook 100 24 60 32 15 231

Dell

Inspirion

100 56 48 24 21 249

Lenovo 80 40 42 40 30 232

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DECISION-MAKING PROCESS

Step 6: Selecting an Alternative

Choose the best alternative or the one that generated the highest total in step 5

E.g. Amanda choose the Dell

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DECISION-MAKING PROCESS

Step 7: Implementing the Alternative

• _{Make the decision in step 6 into action,}

by conveying it to those afected and getting their commitment to it.

• _{Make sure that people participate in the}

process and support it.

• _{Re-asses the environment for any changes, especially if it is a}

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DECISION-MAKING PROCESS

Step 8: Evaluating Decision Efectiveness

• _{Evaluate the outcome or results of the}

decision to see whether the problem was resolved

• _{If the evaluation shows that the}

problems still exist, the manager needs to assess what went wrong

• _{The answer might lead the manager to redo an}

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MANAGERS MAKING DECISIONS

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Planning

• _{What are the organization’s long}

term objectives?

• _{What strategies will best achieve}

those objectives?

• _{What should the organization short}

term objectives be?

• _{How difcult should individual}

goals be?

Organizing

• _{How many employees should I}

have report directly to me?

• _{How much centralization should}

there be in the organization?

• _{How should jobs be designed?} • _{When should the organization}

implement a diferent structure?

Leading

• _{How do I handle employees who}

appear to be unmotivated?

• _{What is the most efective}

leadership style in a given situation?

• _{How will a specifc change afect}

worker productivity?

• _{When is the right time to stimulate}

confict

Controlling

• _{What activities in the organization}

need to be controlled?

• _{How should those activities be}

controlled?

• _{When is a performance deviation}

signifcant?

• _{What type of management}

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MAKING DECISIONS:

1. RATIONALITY

• _{Choices that are logical, consistent and maximize value}

2. BOUNDED RATIONALITY

• Choices that are rational, but limited by an individual’s ability

to process information

3. THE ROLE OF INTUITION

• _{Decision on the basis of experience, feeling and accumulate}

judgement

4. The role of experience evidence-based management

(EBMgt)

• _{The systematic use of the best available evidence to improve}

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THE ROLE OF INTUITION

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TYPES OF DECISIONS

1. STRUCTURED PROBLEMS AND PROGRAMED

DECISIONS

• _{Structural problems}_{: straightforward, familiar and easily}

defned problems

• Programing decisions: repetitive decisions that can be handled by a routine approach

2. UNSTRUCTURED PROBLEMS AND NONPROGRAMMED

DECISIONS

• Unstructured problems: problems that are new or unusual and for which information is ambiguous or incomplete

• Nonprogrammed decisions: unique and non-recurring

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DECISION MAKING CONDITIONS

CERTAINTY

•

a situation when a manager can make accurate decisions

because all outcomes are known

RISK

•

a situation in which the decision maker is able to estimate

the likehood of certain outcomes

UNCERTAINTY

•

a situation in which a decision maker has neither certainty

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DECISION-MAKING STYLES

1. LINEAR-NONLINEAR THINKING STYLE

•

Linear thinking style:

o

Decision style characterized by a person’s preference

for using external and facts and processing this

information through rational logical thinking

•

Non-linear thinking style:

o

Decision style characterized by a person’s preference

for internal sources of information and processing this

information with internal insights, feelings and hunches

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DECISION-MAKING ERROR AND BIASES

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OVERVIEW OF DECISION MAKING

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QUESTIONS FOR DISCUSSIONS

1. Why is decision making often described as the essence of a manager’s job? 2. Describe the eight steps in the decision making process.

3. Compare and contrast the four ways managers make decisions.

4. Explain the two types of problems and decisions. Contrast the three decision-making conditions.

5. All of us bring biases to the decisions we make. What would be the drawback of having biases? Could there be any advantages to having biases? Explain what are the implication for managerial decision making

6. Would you call yourself a linear or nonlinear thinker? What are the decision-making implications of these labels? What are the implication for choosing where you want to work?

7. Is there a diference between wrong decision and bad decisions? Why do good managers sometimes make wrong decisions? Bad decision? How can

managers improve their decision-making skills?

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LANGUAGE it is not unusual for citizen of different countries to speak more than one language

INTRODUCTION TO

TRAVEL

North America Free Trade Agreement:

THE ASEAN ECONOMIC CUMMUNITY

THE POLITICAL / LEGAL ENVIRONMENT

FIVE DIMENSION OF NATIONAL CULTURE

DECISION-MAKING PROCESS

DECISION-MAKING PROCESS

Step 1: Identifying Problem Problem :

DECISION-MAKING PROCESS

Step 2: Identifying Decision Criteria

DECISION-MAKING PROCESS

Step 3: Allocating Weights To The Criteria

DECISION-MAKING PROCESS

Step 4: Developing Alternatives

nty Display quality

DECISION-MAKING PROCESS

Step 5: analyzing Alternatives

DECISION-MAKING PROCESS

Step 6: Selecting an Alternative

DECISION-MAKING PROCESS

Step 7: Implementing the Alternative

DECISION-MAKING PROCESS

Step 8: Evaluating Decision Efectiveness

MANAGERS MAKING DECISIONS

Planning

Leading

MAKING DECISIONS:

4. The role of experience evidence-based management

2. UNSTRUCTURED PROBLEMS AND NONPROGRAMMED

a situation in which the decision maker is able to estimate

information through rational logical thinking

DECISION-MAKING ERROR AND BIASES

QUESTIONS FOR DISCUSSIONS

Thank You