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Manageme
nt
Decisions
MBA 4th
Steve Cooke
Nigel Slack
Chapter 1: Decision Making in
Management
Learning Objectives
Good and Bad Decisions
Decision Making or Problem Solving?
Process of Decision Making
Elements of a Decision
The Range of Managerial Work Roles (Henry Mintzberg)
Chapter 1: Decision Making in
Management
2 Approaches
1. Outcome of Decision
2. Process of Decision Making
Chapter 1: Decision Making in
Management
1. Observe
2. Formal Recognition
3. Interpretation/ Diagnosis
4. Definition
5. Set Objectives
6. Determine the Options
7. Evaluate Options
8. Select option
9. Implement
10. Monitor
Chapter 1: Decision Making in
Management
1. Observe
2. Formal Recognition
Accumulation of Evidence
Evidence is clearly demonstrable
Deviation of a Performance Measure from
some Desired State
This is when the problem cannot be ignored
Chapter 1: Decision Making in
Management
3. Interpretation/ Diagnosis
4. Definition
6. Determine Options
7. Evaluate Options
8. Select Options
10. Monitor
Uncontrollable Factors
Learning Objectives
Types of Management Decisions
The Decision Environment
The Approach to Decision Making
Chapter 2: Content & Context of
Management Decisions
1.Strategic or Operational
2.Structured or Unstructured
3.Dependent of Independent
Chapter 2: Content & Context of
Management Decisions
1. Strategic or Operational : How much organization a
decision
Strategic encompasses
Decisions
Set the intended Direction of the Organization (Future of the Organization)
Relate the Organization to its Environment
Broad in Scope
Long Term
Carried out by Senior Managers
Relatively Unconstrained
Infrequent
Encompass Large part of the Organization
High Degree of Risk/ Uncertainty due to ever changing or High Rate of Change
in Environment
Operational Decisions
Concerned with Input/ Output Relationship of a Department
Routine and Predictable
Short Term
Carried Out by Lower/ Mid Level Managers
Repetitive
May only Concerned with small part of the Organization
Low Risk
Chapter 2: Content & Context of
Management Decisions
2. Structured or Unstructured : How well defined the
decision is?
Structured Decisions
Well defined
Unstructured Decisions
The scale representing the Degree of Influence across other Areas of the
Organization
Chapter 2: Content & Context of
Management Decisions
3.Environment Defined
Example:
Operations Function
Marketing Department
Chapter 2: Content & Context of
Management Decisions
The Decision Environment
3. Environment Defined
A. Specific Environment
B. General Environment
Chapter 2: Content & Context of
Management Decisions
A. Specific Environment
Customers
Suppliers
Local Government
Local Groups
Trading Standards Authorities
Chapter 2: Content & Context of
Management Decisions
B. General Environment
Technical
Legal
Political
Economic
Demographic
Ecological
Cultural
Chapter 2: Content & Context of
Management Decisions
Managers Discretion:
Purpose:
1. Boundary Discretion
2. Treatment Discretion
Controllable Factors:
Consequences:
Impact:
Decision Body
Decision Options
Uncontrollable Factors
Consequences
Chapter 6: Modeling
Learning Objectives
What is a Model?
Forms or Levels of Models
The Uses of Modeling
The Process of Modeling
Two Alternatives to Conventional Mathematical Modeling
Chapter 6: Modeling
What is a Model?
Enhancing Understanding
Stimulating Creativity
Evaluating Alternatives
Chapter 6: Modeling
Enhancing Understanding
Stimulating Creativity
Evaluating Alternatives
Indirect Evaluation:
Types of Variables
Exogenous Variables
Endogenous Variables
Chapter 6: Modeling
Exogenous Variables:
Endogenous Variables:
Mathematical Models:
Mathematical Models:
Chapter 6: Modeling
Operational Research:
For Example:
Allocation Models
Chapter 6: Modeling
Chapter 6: Modeling
Learning Objectives
Certainty, Uncertainty and Risk
Chapter 7: Modeling Uncertainty
Certainty &
Uncertainty
Certain Uncertai
ty nty
Chapter 7: Modeling Uncertainty
Certainty
Uncertainty
Risk
When Conditions of Certainty do not exist but we are able
to make Confident Predictions regarding the Probabilities
that any Particular State will Occur then:
Learning Objectives
Types of Organizational Objectives
Strategic and Operational Objectives
Multiple Objectives
Implicit and Explicit Objectives
Efficiency and Effectiveness
Intrinsic and Extrinsic Objectives
Setting Decision Objectives
Chapter 9: Decision Objectives
Why? When moving Upward from Lower Level the Chain answers
why an Objective should be achieved.
Chapter 9: Decision Objectives
Multiple Objectives
Organizations pursue More than one Objective at the same
time:
Multiple Objectives can compete with each other for resources even if
they are not Conflicting
Multiple Objectives
Organizations pursue More than one Objective at the same
time:
Multiple Objectives can compete with each other for resources even if
they are not Conflicting