Managerial Decision-Making

Managerial Decision-Making

• Decisions are choices made from available options
• Decision-making involves identifying and resolving problems and opportunities
• Decision-making requires effort before and after choosing

Programmed vs Nonprogrammed Decisions

• Programmed decisions are responses to recurring situations, enabling managers to create decision rules
• Nonprogrammed decisions address unique, unstructured situations with significant organizational consequences
• Certainty, risk, and uncertainty are key differences between programmed and nonprogrammed decisions

Risk vs Uncertainty vs Ambiguity

• Risk involves clear goals and available information, but outcomes are subject to chance and potential loss
• Uncertainty occurs when goals are known, but data about alternatives and future events is incomplete
• Ambiguity exists when goals, alternatives, and outcome information are unclear or unavailable

Designing Organization Structure

• Organizing is deploying resources to achieve strategic goals
• Organizing follows and is dictated by strategy
• Strategy defines "what" needs to be done
• Organizing defines "how" to do it

Organization Structure

• Organization structure is a framework that defines task division, resource deployment, and departmental coordination
• It includes tasks assigned to individuals and departments
• It establishes formal reporting relationships
• It designs systems for effective employee coordination across departments
• An organization chart visually represents an organization's structure

Authority, Responsibility, and Delegation

• Authority is the formal right of a manager to make decisions, issue orders, and allocate resources
• Authority is vested in organizational positions, not people
• Authority flows down the vertical hierarchy
• Authority is accepted by subordinates.

Span of Management

• Tall structures have narrow spans of management and many hierarchical levels
• Flat structures have wide spans of management and few hierarchical levels
• A common structural problem is too many levels and spans that are too narrow

Managing Human Talent

• Human Resource Management (HRM) designs and applies formal systems to effectively use human talent to achieve organizational goals
• HRM drives organizational performance
• Human capital is a top factor in competitive success
• Talent management is a key concern for managers
• Human capital is the economic value of employees' combined knowledge, experience, skills, and capabilities
• Human capital refers to individuals' knowledge, skills, experience, and capabilities
• When viewed as an asset, human capital drives productivity and economic growth

Strategic Issues/Goals for Managers

• Hiring the right people increases global competitiveness
• Hiring improves quality, innovation, and customer service
• Knowing who to retain after mergers, acquisitions, or downsizing is essential
• Hiring the right people applies new information technology to HRM processes
• The 3 primary goals of HRM are to find the right people, manage talent for potential, and maintain the workforce long-term

Termination

• Exit interviews are conducted with departing employees to understand their reasons for leaving

Understanding Individual Behavior

• Self-efficacy is an individual's belief in their ability to accomplish a specific task or outcome
• Self-efficacy is a dimension of self-confidence
• Job satisfaction is the degree to which a person finds fulfillment in their job
• Seeking feedback to enhance self-awareness improves performance and job satisfaction
• Organizational commitment is loyalty to and engagement with one's work organization
• Trust is important for organizational commitment
• For example, some Japanese companies expect lifelong employee commitment

Perception and Perceptual Distortions

• Perception is the cognitive process of interpreting the environment
• Perception involves selecting, organizing, and interpreting information
• Perceptual distortions are errors in perceptual judgment
• Stereotyping is assigning generalizations to individuals based on group membership
• The halo effect is an overall impression based on one characteristic

Attributions

• Attributions are judgments about the causes of a person's behavior
• Self-serving bias is overestimating internal contributions to successes and blaming external factors for failures

Attitudes

• Authoritarianism is the belief in power and status differences within an organization
• A person high in authoritarianism is concerned with power, obeys authority, and adheres to conventional values