Professional Documents
Culture Documents
The
Manager as a
Decision Maker
Uncertainty Ambiguous
& risk Information
Incomplete
Information
Implement chosen
alternative
Evaluating Alternatives
Figure 6.5
Is the possible course of action:
Legal?
Ethical
Economical?
Practical?
Evaluating Alternatives
lIs it legal? Managers must first be sure that
an alternative is legal both in this country
and abroad for exports.
lIs it ethical? The alternative must be ethical
and not hurt stakeholders unnecessarily.
lIs it economically feasible? Can our
organization’s performance goals sustain
this alternative?
lIs it practical? Does the management have
the capabilities and resources to do it?
Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000
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Cognitive Biases
lSuggests decision makers use heuristics to
deal with bounded rationality.
n A heuristic is a rule of thumb to deal with complex
situations.
n If the heuristic is wrong, however, then poor
decisions result from its use.
lSystematic errors can result from use of an
incorrect heuristic.
n These errors will appear over and over since the
rule used to make decision is flawed.
Prior Hypothesis
Representativeness Cognitive
Biases
Illusion of Control
Escalating Commitment
Reassess Reassess
alternative alternatives
accept, modify, reject accept 1 or 2, combine
Build complex,
Develop Personal
challenging
Mastery
mental models
Encourage
Systems
Thinking
Build Shared Promote Team
Vision Learning
Individual Creativity
lOrganizations can build an environment
supportive of creativity.
n Many of these issues are the same as for the learning
organization.
n Managers must provide employees with the ability to
take risks.
n If people take risks, they will occasionally fail.
lThus, to build creativity, periodic failures
must be rewarded.
n This idea is hard to accept for some managers.
u When all are listed, then the pros and cons of each
are discussed and a short list created.
lProduction blocking is a potential problem
with brainstorming.
u Members cannot absorb all information being
presented during the session and can forget
their own alternatives.
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