Lecture 4 Flashcards
“שתיקה כהודאה דמיא”
What connection is there between silence and agreeing
Managers sometimes prefer to avoid decisions.
Why?
– Managers don’t know exactly how much time, effort
and resources are involved in a particular course of
action and they are unwilling to commit
– Managers are afraid of poor decisions (that may
affect them personally)
– It is convenient to busy oneself with minor issues and
use this as a guise for avoiding the more substantial
issues
Planned decisions
Problem: Frequent, recurring, cause and effect certainty Procedure: Defined policy, rules, regulations
Unplanned decisions
Problem: New, unstructured, uncertainty regarding cause and effect Procedure: Requires creativity, intuition, analytical abilities
Steps to decision making
Identify and define problem I.D. & define decision criteria Attribute weights to criteria Generate options Evaluate options Implement decision Evaluate decision
How to: Identify and define problem
– Comparing past and present performance
– Comparing your firm to others
– Comparing current performance to planned
future performance
How to:
I.D. & define decision criteria
Attribute weights to criteria
– Survey literature, databases, employees,
customers and other stakeholders
– Next, use absolute comparisons, relative
comparisons, scale out of 100% or some
other system to attribute weights
How to:
Generate options
Evaluate options
– Consider all options
– In this step, we must consider the inclusionary
or exclusionary rules
– Next, calculate the value of the option
How to:
Implement decision
Evaluate decision
– Implement decision
– Next, monitor the implementation of the
decision and the resulting performance
Decision Example: People factors (PF)
– Worker general knowledge skills; worker language skills; worker cultural
awareness; project management people skills (5)
Decision Example: Technical infrastructure (TI)
– Telecommunications infrastructure; up to date PCs, HW/SW; worker technical
skills; SW project management; SW control processes (5) Client interface (CI)
– Client knowledgeable; trust; client language skills; problem resolution process;
time differences; client outsourcer travel (6)
Decision Example: Client interface (CI)
– Client knowledgeable; trust; client language skills; problem resolution process;
time differences; client outsourcer travel (6)
Decision Example: Business infrastructure (BI)
– Business plan; business organization; business process; cost/cash control
process; advertising; client contact methods; payment processes; legal
representation (8)
Decision Example: Regulatory interface (RI)
– Intellectual property protection; tax laws; banking/wire transfer laws; customs/
import/export laws; exchange rules/rates; travel/visa restrictions; telecom
regulations (7)
Decision Examples
(PF), (TI), (CI), (BI), (RI)
But why don’t we make perfect decisions?
• Human issues: – Illusion of control (e.g. gambling) – Preferring short term to long term – Time/pressure constraints in decision making process – Social reality (clout, you scratch my back…) • Does this model reflect reality? Is “rational” always wise?Is there room for hunches, educated guesses and intuition in decision making?
Rational vs. Emotional decisions
• People have limited time, information, resources, intelligence • Experience based “intuitions” influence decision making • Decision makers are often satisfied with “sufficient” decisions • Decision makers stick with decisions , sometimes to an extreme degree
Do we seek to achieve the greatest return (if
the outcome goes our way) or the minimum
loss (if the outcome does not go our way)?
MinMax
- a decision rule used for minimizing the
loss in a worst case scenario
– MaxMin
- a decision rule used for maximizing the
gain in a best case scenario
Group decisions
Pros: More information More approaches, perspectives Intellectual stimulation Decision more understood More commitment to decision Cons: Loudmouth hijacks group Satisficing Groupthink Loss of original goals Cost (or opportunity cost) M
Managing Group Decision
Making
- Brainstorming
- Devil’s advocate
- Avoid getting personal
- Stick to the mission
- Encourage participation
- Avoid criticism
- Synthesize ideas
