Making Decisionlwt.pptx
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1、1111Making DecisionMaking Decision1 Concept of decision2 Rationality and bounded rationality 3 Types of decision4 Decision making steps2000-11王青-管理学院-上海交通大学Managerial Decision MakingManagerial Decision MakinglDecision making:the process by which managers respond to opportunities and threats by analy
2、zing options,and making decisions about goals and courses of action.2000-12王青-管理学院-上海交通大学lDecisions in response to opportunities:managers respond to ways to improve organizational performance.lDecisions in response to threats:occurs when managers are impacted by adverse events to the organization.20
3、00-13王青-管理学院-上海交通大学Rational decision-The Classical ModelRational decision-The Classical ModelList alternatives List alternatives&consequences&consequencesRank each alternative Rank each alternative from low to highfrom low to highSelect bestSelect bestalternativealternativeAssumes all informationis
4、available to managerAssumes manager canprocess informationAssumes manager knowsthe best future course ofthe organization lUnfortunately,mangers often do not have all(or even most)required information2000-14王青-管理学院-上海交通大学Bounded rational decisionBounded rational decision lAdministrative Model of deci
5、sion making:Challenged the classical assumptions that managers have and process all the information.As a result,decision making is risky.lBounded rationality:There is a large number of alternatives and information is vast so that managers cannot consider it all.Decisions are limited by peoples cogni
6、tive abilities.2000-15王青-管理学院-上海交通大学Information is IncompleteInformation is IncompleteUncertaintyUncertainty&risk&riskAmbiguousAmbiguousInformationInformationTime constraints&information costsIncompleteIncompleteInformationInformationlIncomplete information:most managers do not see all alternatives
7、and decide based on incomplete information.2000-16王青-管理学院-上海交通大学Decision Making StepsDecision Making StepsRecognize need for Recognize need for a decisiona decisionFrame the problemFrame the problemGenerate&assess Generate&assess alternativesalternativesChoose among Choose among alternativesalternat
8、ivesImplement chosenImplement chosenalternativealternativeLearn from feedbackLearn from feedbackFigure 6.42000-17王青-管理学院-上海交通大学Decision Making StepsDecision Making Steps1.Recognize need for a decision:Managers must first realize that a decision must be made.lBegin a decision need two conditions:Cond
9、ition 1:find a gap between aim n present performance.Or environment changes.Condition 2:necessary resource.As authority,found,information,human resource 2000-18王青-管理学院-上海交通大学A decision making of a new carlOne car of a factory was broken,it brings some trouble to the daily business,and there still is
10、 surplus income of last year.Buy a new car Buy a second-hand car*Repair the broken car Rent a car2000-19王青-管理学院-上海交通大学Managers must develop feasible alternative courses of action.Acura;Chevrolet;Honda;Hyundai;Mazda;Nissan;Plymouth;Pontiac;Toyota Camry;Volkswagen Passat;Volvo.2 Generate alternatives2
11、000-110王青-管理学院-上海交通大学The advantages&disadvantages of each alternativeSpecify criteria(standard)Allocation of weights to criteriaAnalysis of alternatives.3.Evaluate alternativesCriteriaWeight Price10Comfort8Durable5Repair record5Function 3Easy to drive12000-111王青-管理学院-上海交通大学Alternatives PriCoDuReFuDr
12、 totalAcura 5 61010 710229Chevrolet 7 8 5 6 4 7208Honda accord 5 81010 7 7242Hyundai 7 7 5 4 7 7199Mazda 7 5 7 7 4 7199Nissan 8 5 7 9 7 7218Plymouth 10 7 3 3 3 5200Pontiac 410 5 51010210Toyota camry 6 71010 7 7244Volkswagenpassat 4 7 5 410 8 179Volvo 2 710 9 4 51882000-112王青-管理学院-上海交通大学Managers rank
13、 alternatives and decide Toyota Camry5.Implement choose alternativeManagers must now carry out the alternative.6.Learn from feedbackmanagers should consider what went right and wrong with the decision and learn for the future.4.Choose among alternatives2000-113王青-管理学院-上海交通大学lStructure of decision:lT
14、echnique of decision lGroup of decision Types of Decision2000-114王青-管理学院-上海交通大学Structure of Decision Structure of Decision lProgrammed Decisions:routine,almost automatic process.Managers have made decision many times before.There are rules or guidelines to follow.Example:Deciding to reorder office s
15、upplies.lNon-programmed Decisions:unusual situations that have not been often addressed.No rules to follow since the decision is new.These decisions are made based on information,and a mangers intuition,and judgment.Example:Should the firm invest in a new technology?2000-115王青-管理学院-上海交通大学Technique o
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