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1、CHAPTER4FOUNDATIONSOFDECISIONMAKING1.EARMNGoutcomesAfterreadingthischapter,studentsshouldbeableto:4-1.Describethedecision-makingprocess.4-2.Explainthethreeapproachesmanagerscansctomakedecisions.4-3.Describethetypesofdecisionsanddecision-makingconditionsmanagersface.44.Discussgroupdecisionmaking.4-5.
2、Discusscontemporarj,issuesinmanagerialdecisionmaking.ManagementMjlhMyth:Agooddecisionshouldbedefinedbyitsoutcome.Truth:Agooddecisionshouldbejudgedbytheprocessused,nottheresultsachieved.SUMMRYTheoverallqualityofamangcr,sdecisionsgoesalongwayindetermininganorganizationssuccessorfailure.Thischapterfocu
3、sesonthetypesofdecisionsmanagersmakeandhowhcyshouldbemade.TeaChinETips:Havestudents(hinkalx)utimportantdecisionstheyhavemaderecently.Questionsforstudentstoconsider:1. Didtheyfollowaseriesofstepstothinkthroughwhilemakingthisdecision?2. Wasthereahighdegreeofuncertainlyinvolvedinmakingthedecision?3. Wa
4、sagroupofpeopleinvolvedinmakingIhisdecision?Ifso,didIhegrouphelporhurtthedecision-makingprocess?1. HOVVDOMANAGERSMAKEDECISIONS?A. Introduction1. Decisionmakingistypicallydescribedas“choosingamongalternatives.02. Thisissimplisticbecausedecisionmakingisaprocess.a)SccExhibit4-1illustratingthedecision-m
5、akingprocess.B. Whatdefinesadecisionproblem?1. Thedecision-makingprocessbeginswiththeidentificationofaproblem(StepI),adiscrepancybetweenanexistingandadesiredstateofaffairs.a)Pfizersalesmanagerexample.2. P11)blcmidentificationissubjective.3. Themanagerwhobymistakesolvesthewrongproblemperfectly,islike
6、lytoperformjustaspoorlyasthemanagerwhofailstoidentifytherightproblemanddocsnothing.a) Howdomanagersbecomeawarethattheyhaveadiscrepancy?b) ManagerscomparetheirCUITentstateofaffairsagainstanacceptablestandard.1) Pastperformance.2) l*reviouslysetgoals.3) Performanceofsomeotherunitwithintheorganizationo
7、rinotherorganizations.C. WhatIsRelevantintheDecision-MakingProcess?1.Onceaproblemisidentite(l.thedecisioncriteriamustbeidentified(Step2).2. Car-buyingexamplecontinued.3. Everydecisionmakerhascriteria-explicitlystaledornotthatguidehis/herdecision.a)Whatisnotidentifiedisasimportantaswhatis.D. HowDoest
8、heDecisionMakerWeighttheCriteriaandAnalyzeAlternatives?1. ItisnecessarytoallocateweightstotheitemslistedinStep2inordertogivethemtheirrelativepriorityin(hedecision(Step3).2. Asimpleapproach,give(hemostimportantcriterionaweigh!oftenandthenajsignweights(oIhcreslagainstthatstandard.a)Exhibil4-2liststhec
9、rileriaandweightsinacar-buyingdecision.3. Thenthedecisionmakerlists(healtemalivesthatCOUIdsucceedinresolvingthep11blem(Step4).a)Noattemptismadetoappraisethesealternativeonlytolistthem.4. Onceidentified,thedecisionmakermuslcriticallyanalyzeeachallernalive(Step5).a) Eachalternativeisevaluatedbyapprais
10、ingitagainst(hecriteriaandweightsestablishedinStepS2and3.1) Exhibit4-3showstheassessedvaluesforeachvehicle;itdoesnoreflecttheweightingdoneinStep3.b) Ifyoumultiplyeachalternativeassessmentagainstitsweight,yougelExhibii3-4.c) Notice(hattheweightingof(hecriteriahaschangedthe11nkingoalternativesinourexa
11、mple.E. WhatDeterminestheBestChoice?1. ThecrilicalactochoosingthebestahemalivefromamongIhOSeenumeratedandassessed(Step6).F. WhatHappensInDecisionImplementation?1. Thedecisionmaystillfailifitisnotimplementedproperly(Step7).2. Decisionimplementationincludesconveyingthedecisiontothoseaffectedandgetting
12、theircmmi(11enttoit.3. ThepeoplewhomustCaITyoutadecisionarcmostlikelytoenthusiasticallyendorsetheoutcomeiftheyparticipateinthedecision-makingprocess.G. Whatisthe1.astStepintheDecisionProcess?1. Thelaststep(Step8)appraisesIhCresultofthedecisiontoseewhetherithascorrectedtheproblem.2. Didthealternative
13、choseninStep6andimplementedinStep7accomplishthedesiredresult?H. CommonErrorsCommittedintheDecision-MakingPrOCeSSI. Makingdecisionsismakingchoices.J. HeuristicsarerulesofthumbthatmanagersusetoSimPlifytheirdecisionmaking.K. Exhibit4-5identifies12commondecisionerrorsandbiasesthatmanagersmake.L. Somecom
14、monmistakes:aOverconfidencebias-theythink(heyknowmorethan(heydoorholdunrealisticallypositiveviewsofthemselvesandtheirperformance.b) Immediategruhficuiionbias-describesdecisionmakerswhotendtowantimmediaterewardsandtoavoidimmediatecosts.c) Anchoringeffect-describeswhendecisionmakersfixateoninitialinfo
15、rmationasastartingpointandthen,onceset.failtoadequatelyadjustforsubsequentinformation.d) Selectiveperceptionbias-whendecisionmakersselectivelyorganizeandinterpreteventsbasedontheirbiasedperceptions.e) Confirnuiiionbias-decisionmakerswhoseekoutinfonnationthatreaffirmstheirPaSlchoicesanddiscountinfonn
16、ationthatcontradictsasjudgments.f) Framingbias-whendecisionmakersselectandhighlightcertainaspectsofasituationwhileexcludingoilwrs.g) Availabilitybias-whendecisionsmakerstendtorc11c11bereventsthatareIhemostrecentandvividintheirmemory.h) Representationbias-whendecisionmakersassessthelikelih(lofaneventbasedOnhowclosel