4.

LEARNING OBJECTIVES
EVALUATE SCHOOLS OF
MANAGEMENT THINKING
DESCRIBE LEVELS, TYPES, STAGES
OF DECISION MAKING
COMPARE INDIVIDUAL &
ORGANIZATIONAL DECISION MAKING
*
4.2

LEARNING OBJECTIVES
ASSESS CHANGING MANAGEMENT
PROCESS
EXPLAIN HOW INFO SYSTEMS AID
MANAGERS & DECISION MAKING
*

4.3

MANAGEMENT CHALLENGES

WHAT MANAGERS DO
INTRODUCTION TO DECISION MAKING
INDIVIDUAL MODELS OF DECISION
MAKING
HOW INFORMATION TECHNOLOGY HAS
CHANGED MANAGEMENT PROCESS
*
4.4

THREE MANAGEMENT THEORIES

TECHNICAL - RATIONAL
Classical
BEHAVIORAL
COGNITIVE
*
4.5

THREE MANAGEMENT THEORIES

TECHNICAL - RATIONAL Classical:
EMPHASIZES PRECISION OF TASK
ORGANIZES TASKS INTO JOBS
ORGANIZES JOBS INTO
PRODUCTION SYSTEMS
*
4.6

THREE MANAGEMENT THEORIES

BEHAVIORAL:
EMPHASIZES ORGANIZATIONS
ADAPTATION TO EXTERNAL,
INTERNAL ENVIRONMENT
*

4.7

THREE MANAGEMENT THEORIES

COGNITIVE:
EMPHASIZES LEARNING & APPLYING
KNOW-HOW, KNOWLEDGE
HOW WELL MANAGERS PROVIDE
MEANING TO NEW SITUATIONS
*

4.8

EVOLUTION OF MANAGEMENT THEORY

4.9

CLASSICAL (1880-1927)
CONTEMPORARY (1930-1962)
POSTMODERN (1965 - present)
*

CLASSICAL PERIOD:

TECHNICAL-RATIONAL VIEW
TIME & MOTION STUDIES
SCIENTIFIC MANAGEMENT
Planning, organizing, coordinating,
deciding, controlling
*
4.10

CONTEMPORARY PERIOD:

4.12

SOCIAL PSYCHOLOGISTS
SOCIOLOGISTS
ORGANIZATIONAL BEHAVIORISTS
Emphasized individual
collective behavior
*

POSTMODERN PERIOD:

4.12

ECONOMISTS
SOCIOLOGISTS
MANAGEMENT THEORISTS
Emphasizes knowledge basis of
organizations
*

BEHAVIORAL MODEL OF MANAGEMENT:

High-volume; high-speed work
Variety; fragmentation; brevity
Speculation; hearsay; gossip
Complex web of interactions; contacts
Prefer verbal media
Control agenda
*

4.13

MANAGERIAL ROLES (Mintzberg):

Interpersonal: figureheads & leaders
Informational: receive; disseminate
critical info
Decisional: initiate activities; handle
disturbances; allocate resources;
negotiate conflicts
*

4.14

Wrapps SUCCESSFUL MANAGER:

GENERAL MANAGER

OPERATING DECISIONS

CORPORATE STRATEGY

4.15

OPERATING
PROBLEMS

COGNITIVE PERSPECTIVE
ORGANIZATION:
Is knowing, sentient organism
Can learn & know
Success depends on learning- &
knowledge processing infrastructure
Two schools
*
4.16

1. MANAGERIAL SENSE-MAKING:

MANAGERS:
Create mental maps
Are problem solvers, decision makers
Are information processors
Create & support information
processing
*
4.17

2. KNOWLEDGE-BASED VIEW OF FIRM:

KNOWLEDGE:

Central productive / strategic asset

Explicit (codified); Tacit (know-how)
Includes information, social relations; know-how;
skills
Change based on new information
Firm creates value by integrating specialized
knowledge
Strategy: Develop core competencies
*

4.18

LEVELS OF DECISION MAKING

STRATEGIC: Long-term objectives;
resources; policies
MANAGEMENT CONTROL: Monitor use of
resources; performance
KNOWLEDGE-LEVEL: Evaluate potential
innovations; knowledge
OPERATIONAL: How to carry out specific
day-to-day tasks
*
4.19

TYPES OF DECISIONS
STRUCTURED: Repetitive;
routine;
definite procedure;
certainty
SEMISTRUCTURED: One or more
factors not structured; risk
UNSTRUCTURED: Unique; non-routine;
uncertainty; requires judgment
*
4.20

INFO SYSTEMS, LEVELS, DECISIONS

ORGANIZATIONAL LEVEL
TYPE OF
DECISION
STRUCTURED

OPERATIONAL

KNOWLEDGE

ELECTRONIC
SCHEDULING

OAS
SEMISTRUCTURED

PRODUCTION
COST OVERRUNS

MIS
BUDGET
PREPARATION

PROJECT
SCHEDULING

DSS
KWS

4.21

STRATEGIC

ACCOUNTS
RECEIVABLE

TPS

UNSTRUCTURED

MANAGEMENT

PRODUCT DESIGN

FACILITY
LOCATION

ESS
NEW PRODUCTS
NEW MARKETS

STAGES OF DECISION MAKING

INTELLIGENCE: Collect information;
identify problem
DESIGN: Conceive alternatives; select
criteria
CHOICE: Use criteria to evaluate
alternatives; select
IMPLEMENTATION: Put decision into effect;
allocate resources; control
*
4.22

SOURCE: Simon, The New Science of Management Decision (1960)

INDIVIDUAL MODELS OF
DECISION MAKING

RATIONAL: Comprehensive rationality;

evaluate all alternatives
SATISFICING: Bounded rationality; choose
first good alternative
MUDDLING: Successive comparison;
marginal changes
PSYCHOLOGICAL: Cognitive types;
manages differ in how they make choices
*

4.23

ORGANIZATIONAL MODELS
OF DECISION MAKING
RATIONAL ACTOR: Maximize organizations
benefits
BUREAUCRATIC: Follow standard operating
procedures (SOP)
POLITICAL: Key groups compete and
bargain
GARBAGE CAN: Organizations not
rational; solutions accidental
*
4.24

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4.25

4.26