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Questions and Answers
What is the main characteristic that distinguishes programmed decisions from non-programmed decisions?
What is the main characteristic that distinguishes programmed decisions from non-programmed decisions?
What type of problem is best handled by a programmed decision?
What type of problem is best handled by a programmed decision?
What is a policy, in the context of programmed decisions?
What is a policy, in the context of programmed decisions?
What type of decisions are typically made by first-line managers and many middle managers?
What type of decisions are typically made by first-line managers and many middle managers?
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At what level of the organization are managers typically dealing with poorly structured problems and using non-programmed decisions?
At what level of the organization are managers typically dealing with poorly structured problems and using non-programmed decisions?
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What is the assumption of rationality in managerial decision making?
What is the assumption of rationality in managerial decision making?
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When can the assumptions of rationality be met in managerial decision making?
When can the assumptions of rationality be met in managerial decision making?
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What are the two dimensions that differ in an individual's approach to decision-making?
What are the two dimensions that differ in an individual's approach to decision-making?
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Why is the rational model flawed in actual decision-making?
Why is the rational model flawed in actual decision-making?
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What is the purpose of the rational model in decision-making?
What is the purpose of the rational model in decision-making?
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Study Notes
Nature of Managerial Decision-making
- Decision making involves choosing one alternative from a set of alternatives.
- There are two types of decisions: programmed and non-programmed decisions.
Programmed Decisions
- Made in routine, repetitive, well-structured situations using predetermined decision rules.
- Often derived from established practices, procedures, or habits.
- Ideal for computers to deal with complex programmed decisions.
- Most decisions made by first-line managers and many by middle managers are programmed decisions.
Non-Programmed Decisions
- Made for novel and/or ill-structured situations where predetermined decision rules are impractical.
Types of Problems and Decisions
- Problems can be well-structured or poorly structured.
- Well-structured problems:
- Straightforward, familiar, and easily defined.
- Handled using programmed decisions and routine approaches.
- Three types of plans for programmed decisions:
- Procedures: series of interrelated sequential steps.
- Rules: explicit statements guiding manager actions.
- Policies: guides establishing parameters for decision-making.
- Poorly structured problems:
- New, unusual, with ambiguous or incomplete information.
- Handled using non-programmed decisions requiring custom-made solutions.
General Organizational Situations
- Higher levels of the organization: dealing with poorly structured problems and using non-programmed decisions.
- Lower levels: dealing with well-structured problems using programmed decisions.
Decision-Making Approaches
- Managers can make decisions based on rationality, bounded rationality, or intuition.
Assumptions of Rationality
- Managerial decision making is assumed to be rational and value-maximizing within specified constraints.
- Assumptions of rationality:
- Problem clarity
- Goal orientation
- Known options
- Clear preferences
- Constant preferences
- No time or cost constraints
- Maximum pay off
- The rational model is flawed, as perfect information is not available, and managers' values and personality factors influence decisions.
Decision-Making Styles
- Managers have different styles when making decisions and solving problems, differing in:
- Way of thinking (rational or intuitive)
- Approach to decision-making
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Description
Learn about the nature of managerial decision-making, including the two types of decisions: programmed and non-programmed decisions. Understand how computers are used to make complex programmed decisions.
