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

  INTRODUCTION TO MANAGEMENT Subarjo Joyosumarto SE, MA, Ph.D

  23 Januari 2017 Meeting 3: Overview of Meeting 2

Chapter 7. Decision-Making

  Overview of Meeting 2

  

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

  REGIONAL TRADING ALLIANCES 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

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

FIVE DIMENSION OF NATIONAL CULTURE

FIVE DIMENSION OF NATIONAL CULTURE

CHAPTER 7. DECISION-MAKING

DECISION-MAKING PROCESS 1.

  Identifying a Problem

  2. Identifying a Decision Criteria 3.

  Allocating weights to Criteria 4.

  Allocating weights to

  6. Selecting an Alternative

  7. Implementin g the Alternative 8.

  Evaluating Decision Efectiveness THE

  DECISION MAKING PROCESS

DECISION-MAKING PROCESS 1.

  Step 1: Identifying Problem

  Identifying a Problem 8.

  2. Evaluating Identifying a Decision Decision Problem :

  Efectiveness Criteria

• Is a discrepancy between existing

  THE 3.

  7. DECISION Allocating

  and desired condition

  Implementing MAKING weights to the Alternative

  PROCESS Criteria

• Becomes an obstacle that makes it 4.

  6.

  difcult to achieve desired goals or

  Allocating Selecting an weights to

  Alternative Criteria 5.

  Analyzing

  purpose

  Alternatives

10 DECISION : a choice among two or more alternatives

  Managers have to identify :

• What's happening

DECISION-MAKING PROCESS 1.

  Step 2: Identifying Decision Criteria

  Identifying a Problem 8.

  2. Evaluating Identifying a Decision Decision

  Efectiveness Criteria

  Decision criteria is criteria that defnes

  THE 3.

  7. DECISION Allocating

  what’s important or relevant to resolving a

  Implementing MAKING weights to the Alternative

  PROCESS Criteria

  problem 4.

  6. Allocating Selecting an weights to

  Alternative Criteria 5.

  Analyzing

  E.g. Amanda identifes that for the laptops:

  Alternatives

11 DECISION : a choice among two or more alternatives

• storage capabilities,
• display quality,

• • battery life,

DECISION-MAKING PROCESS 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 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

DECISION-MAKING PROCESS 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 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

DECISION-MAKING PROCESS 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 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

DECISION-MAKING PROCESS 1.

  Identifying a Problem 8.

  2. Evaluating Identifying a Decision Decision

  Efectiveness Criteria

  Step 6: Selecting an Alternative

  THE 3.

  7. DECISION Allocating Implementing

  MAKING weights to the Alternative PROCESS Criteria

  Choose the best alternative or the one that 4.

  6.

  generated the highest total in step 5

  Allocating Selecting an weights to

  Alternative Criteria 5.

  Analyzing Alternatives

  DECISION : a choice among two or more alternatives E.g. Amanda choose the Dell inspiron because it score highest

DECISION-MAKING PROCESS 1.

  Identifying a Problem 2.

  Identifying a Decision

  Criteria 3.

  Allocating weights to Criteria 4.

• 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 long-

  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 7: Implementing the Alternative

DECISION-MAKING PROCESS 1.

  Identifying a Problem 2.

  Identifying a Decision

  Criteria 3.

  Allocating weights to Criteria 4.

• 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

  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 8: Evaluating Decision Efectiveness

• The answer might lead the manager to redo an

MANAGERS MAKING DECISIONS

  Planning

  Organizing

• 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?
• 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

  Controlling

• How do I handle employees who appear to be unmotivated?
• What is the most efective
>What activities in the organization need to be controlled?
• How should those activities be

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

THE ROLE OF INTUITION

TYPES OF DECISIONS

  2. UNSTRUCTURED PROBLEMS AND NONPROGRAMMED 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

  

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

DECISION-MAKING STYLES

1. LINEAR-NONLINEAR THINKING STYLE

• Linear thinking style: oDecision style characterized by a person’s preference for using external and facts and processing this information through rational logical thinking
• Non-linear thinking style: oDecision style characterized by a person’s preference for internal sources of information and processing this

DECISION-MAKING ERROR AND BIASES

OVERVIEW OF DECISION MAKING

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?

  Thank You