Ch07r_The Decision Making Process

Introduction to Management 11e John Schermerhorn Chapter 7The Decision-Making Process

Management 11th edition chapter 7

Planning Ahead Chapter 7 Study QuestionsWhat is the role of information in the management process?How do managers use information to make decisions?What are the steps in the decision-making process?What are the current issues in managerial decision making?Management 11e Chapter 7*


Study Question 1: What is the role of information in the management process?Information, technology and managementSociety is information-driven, digital, networked, and continuously evolving. Managers must haveComputer competency Ability to understand computers and use them to their best advantageInformation competencyAbility to gather, analyze and use information for decision making and problem solvingManagement 11e Chapter 7*


Study Question 1: What is the role of information in the management process?What is useful information?Data Raw facts and observations Information Data made useful for decision making Information drives management functions Management 11e Chapter 7*


Study Question 1: What is the role of information in the management process?Characteristics of useful information:Timely : available when neededHigh quality : accurate and reliableComplete : sufficient for the task at handRelevant: appropriate for the task at handUnderstandable : clear and easily understood by the userManagement 11e Chapter 7*


Study Question 1: What is the role of information in the management process?Information needs of organizations Information exchanges with the external environment:Gather intelligence information to deal with customers, competitors, government agencies, creditors, suppliers, and stockholdersProvide public information to stakeholders and the external environment for image building, product advertising, and financial reportingInformation exchanges within the organization:Facilitate decision making Facilitate problem solving Management 11e Chapter 7*


Study Question 1: What is the role of information in the management process?Management 11e Chapter 7*


Figure 7.1 Internal and external information needs of an organizationManagement 11e Chapter 7*


Study Question 1: What is the role of information in the management process?Information systemsUse IT to collect, organize and distribute data for use in decision makingManagement information systemsMeet the information needs of managers in making daily decisions

Management 11e Chapter 7*


Figure 7.2 Information technology is breaking barriers and changing organizations Management 11e Chapter 7*


Study Question 2: How do managers use information to make decisions?Managerial advantages of IT utilization:Planning advantages Better and more timely access to useful information Involving more people in planning Organizing advantages More ongoing and informed communication among all parts of the organization Improved coordination and integration Management 11e Chapter 7*


Study Question 2: How do managers use information to make decisions?Managerial advantages of IT utilization (cont.):Leading advantages Improved communication with staff and stakeholders Keeping objectives clear Controlling advantages More immediate measures of performance results Allows real-time solutions to performance problems



Figure 7.3 The manager as an information-processing nerve center Management 11e Chapter 7*


Study Question 2: How do managers use information to make decisions?Problem solvingThe process of identifying a discrepancy (perbedaan) between actual and desired performance and taking action to resolve it Management 11e Chapter 7*


Study Question 2: How do managers use information to make decisions?Problem-solving approaches or styles:Management 11e Chapter 7*


Study Question 2: How do managers use information to make decisions?Systematic versus intuitive thinking Management 11e Chapter 7*


Study Question 2: How do managers use information to make decisions?Multidimensional thinking applies both intuitive and systematic thinking Manajer senior harus mampu mendekati masalah dari kedua perspektif berpikir sistematis dan berpikir intuitif. Melakukan hal membutuhkan pemikiran multidimensi, yaitu kemampuan untuk melihat banyak masalah sekaligus, dalam hubungan satu sama lain, dan dalam horizon jangka panjang dan pendek.Berpikir multidimensi yang efektif memerlukan keterampilan di oportunisme strategis - kemampuan untuk tetap fokus pada tujuan jangka panjang sementara cukup fleksibel untuk menyelesaikan masalah jangka pendek dan kesempatan pada waktu yang tepat.Management 11e Chapter 7*


Study Question 2: How do managers use information to make decisions?Management 11e Chapter 7*Managers use different cognitive styles


Study Question 2: How do managers use information to make decisions?Types of problemsStructured problems are ones that are familiar, straightforward, and clear with respect to information needs Keputusan yang telah terprogram (Programmed decisions) menerapkan solusi yang sudah tersedia dari pengalaman masa lalu untuk memecahkan masalah terstrukturPelanggan mengembalikan barang yang sudah di beli di toko, keterlambatan supplier dalam pengiriman barang yang penting. Management 11e Chapter 7*


Study Question 2: How do managers use information to make decisions?Types of problemsUnstructured problems are ones that are full of ambiguities and information deficiencies Nonprogrammed decisions: keputusan yang unik dan jarang terjadi dan membutuhkan solusi yang khusus. Commonly faced by higher-level management Keputusan untuk bergabung dengan perusahaan lain,Bangun pabrik baruManagement 11e Chapter 7*


Study Question 2: How do managers use information to make decisions?Crisis decision making A crisis involves an unexpected problem that can lead to disaster if not resolved quickly and appropriately Terrorism, 9/11, Tsunami Management 11e Chapter 7*


Study Question 2: How do managers use information to make decisions?Management 11e Chapter 7*


Study Question 2: How do managers use information to make decisions?Ada 3 kondisi yang manager hadapi ketika mengambil keputusan: Management 11e Chapter 7*


Figure 7.4 Three environments for managerial decision making and problem solving Management 11e Chapter 7*


Study Question 3: What are the steps in the decision-making process?Five-step decision-making process:Identify and define the problem Generate and evaluate alternative solutions Make decisionImplement the decision Evaluate results Management 11e Chapter 7*


Study Question 3: What are the steps in the decision-making process?Step 1 Find and define the problem Focuses on information gathering, information processing, and deliberation (musyawarah) Decision objectives should be established Common mistakes in defining problems:Defining the problem too broadly or too narrowly Focusing on symptoms (gejala) instead of causesDrop in performance, worker needs training in the use of new computer systemChoosing the wrong problem with which to deal at the a certain point in time.Management 11e Chapter 7*


Study Question 3: What are the steps in the decision-making process?Step 2 generate and evaluate alternative courses of actionSeveral potential solutions are formulated at this stage. More information is gathered, data are analyzed , the advantages and disadvantages of alternative solutions are identifiedApproaches for evaluating alternatives:Stakeholder analysis Cost-benefit analysis Management 11e Chapter 7*


Study Question 3: What are the steps in the decision-making process?Step 2 generate and evaluate possible solutions (cont.) Criteria for evaluating alternatives:Benefits Costs Timeliness : How fast can the alternative be implemented and a positive impact achieved?Acceptability : To what extent will the alternative be accepted and supported Ethical soundness Management 11e Chapter 7*


Study Question 3: What are the steps in the decision-making process?Step 2 generate and evaluate possible solutions (cont.)Common mistakes:Selecting a particular solution too quickly Choosing a convenient alternative that may have damaging side effects or may not be as good as other alternatives Management 11e Chapter 7*


Study Question 3: What are the steps in the decision-making process?Step 3 decide on a preferred course of actionTwo different approachesBehavioral decision model leads to satisficing decisionsBehavioral: describe decision making with limited information and bounded rationalitySatisficing: choose the first satisfactory alternative that comes to ones attentionClassical decision model leads to optimizing decisions classical: decision making with complete informationOptimizing: choose the alt giving the absolute best solution to a problem.



Figure 7.6 Differences in the classical and behavioral decision-making modelsManagement 11e Chapter 7*


Study Question 3: What are the steps in the decision-making process?Step 4 implement the decision solution Involves taking action to make sure the solution decided upon becomes a reality Managers need to have willingness and ability to implement action plans Lack-of-participation error should be avoided Management 11e Chapter 7*


Study Question 3: What are the steps in the decision-making process?Step 5 evaluate results Involves comparing actual and desired results Positive and negative 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 Management 11e Chapter 7*


Study Question 3: What are the steps in the decision-making process?Check ethical reasoningPilihan yang dibuat pada setiap langkah dari proses pengambilan keputusan sering memiliki dimensi moral yang diabaikan. Untuk membantu dalam memeriksa pertimbangan etis, sistematis bertanya dan menjawab pertanyaan-pertanyaan berikut:Management 11e Chapter 7*


Study Question 4: What are the current issues in managerial decision making?Issues in decision makingOrang terkadang membuat keputusan yang buruk karena mereka menggunakan strategi menyederhanakan - heuristik - untuk membuat keputusan ketika dihadapkan dengan waktu yang terbatas, informasi, dan energiHow do decision errors happen?Hueristics are strategies for simplifying decision making/ pengambilan keputusan yang praktis. Management 11e Chapter 7*


Study Question 4: What are the current issues in managerial decision making?Management 11e Chapter 7*


Study Question 4: What are the current issues in managerial decision making?Management 11e Chapter 7*Availability bias: PK cenderung untuk mengingat peristiwa yang terbaru dan tertanam dalam ingatannya.Representativeness bias: PK menilai kemungkinan suatu peristiwa berdasarkan pada kesamaan peristiwa itu dari peristiwa lainnya. Anchoring Adjustment bias: PK menetapkan informasi awal sebagai pedoman untuk mengambil keputusan, sehingga mengabaikan informasi yang datang kemudianFraming error: PK memilih dan lebih memperhatikan aspek tertentu dari situasi dan mengabaikan yang lainConfirmation error: PK mencari informasi yg merunjuk pada pilihan dimasa lalu dan mengabaikan informasi yang menentang penilaiannya di masa laluEscalating commitment: kecenderungan untuk meningkatkan usaha dan menambah banyak sumber daya untuk mengejar tindakan yang tidak bekerja


Study Question 4: What are the current issues in managerial decision making?Creative Decision making:Creativity is the generation of a novel(baru) idea or unique approach that solves a problem or crafts an opportunity creativity is more likely when decision makers are highly task motivated Organizations should create an environment that supports and encourages creativity



Study Question 4: What are the current issues in managerial decision making?Personal creativity driversManagement 11e Chapter 7*


Study Question 4: What are the current issues in managerial decision making?Situational creativity driversTeam creativity skillsManagement support for creative ideasOrganizational culture



Study Question 4: What are the current issues in managerial decision making?Situational creativity driversManagement 11e Chapter 7*


Chapter 7 CaseAmazon: One E-Store to Rule Them All


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Ch07r_The Decision Making Process