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    Chapter 6

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    Shyam Kumar
    The document discusses the decision making process including defining decision making, the decision making process, limitations of rationality, developing alternatives, quantitative and qualitative factors, marginal analysis, cost effectiveness analysis, selecting alternatives, programmed vs nonprogrammed decisions, creativity and innovation, the creative process, and rules for brainstorming.

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    Chapter 6

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    Shyam Kumar
    317 views14 pages
    The document discusses the decision making process including defining decision making, the decision making process, limitations of rationality, developing alternatives, quantitative and qualitative factors, marginal analysis, cost effectiveness analysis, selecting alternatives, programmed vs nonprogrammed decisions, creativity and innovation, the creative process, and rules for brainstorming.

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    The document discusses the decision making process including defining decision making, the decision making process, limitations of rationality, developing alternatives, quantitative and qualitative factors, marginal analysis, cost effectiveness analysis, selecting alternatives, programmed vs nonprogrammed decisions, creativity and innovation, the creative process, and rules for brainstorming.

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    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    317 views14 pages

    Chapter 6

    Uploaded by

    Shyam Kumar
    The document discusses the decision making process including defining decision making, the decision making process, limitations of rationality, developing alternatives, quantitative and qualitative factors, marginal analysis, cost effectiveness analysis, selecting alternatives, programmed vs nonprogrammed decisions, creativity and innovation, the creative process, and rules for brainstorming.

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    ESSENTIALS OF MANAGEMENT: An International Perspective

    Sixth Edition Weihrich and Koontz

    Chapter 6. Decision Making

    2004 H. Weihrich

    Chap. 6. Decision Making

    After studying this chapter, you understand:


    1. Decision making as a rational process. 2. The development of alternative courses of action 3. The selection from among alternatives. 4. The differences between programmed and nonprogrammed decisions. 5. Decisions made under conditions of certainty, uncertainty, and risk. 6. The importance of creativity and innovation in managing. 7. The major principles, or guides, for planning
    2004 H. Weihrich Chap. 6. Decision Making

    Decision Making
    Decision making is defined as the selection of a course of action from among alternatives

    2004 H. Weihrich

    Chap. 6. Decision Making

    Decision Making Process


    1. Premising, 2. Identifying alternatives, 3. Evaluating alternatives in terms of the goal sought, and 4. Choosing an alternative, that is, making a decision

    2004 H. Weihrich

    Chap. 6. Decision Making

    Limited, or "Bounded," Rationality


    Limitations of information, time, and certainty limit rationality, even though a manager tries earnestly to be completely rational Satisficing is picking a course of action that is satisfactory or good enough under the circumstances
    2004 H. Weihrich Chap. 6. Decision Making

    Development of Alternatives and the Limiting Factor

    A limiting factor is something that stands in the way of accomplishing a desired objective The principle of the limiting factor: By recognizing and overcoming those factors that stand critically in the way of a goal, the best alternative course of action can be selected
    2004 H. Weihrich Chap. 6. Decision Making

    Quantitative and Qualitative Factors


    Quantitative factors are factors that can be measured in numerical terms Qualitative, or intangible, factors are those that are difficult to measure numerically

    2004 H. Weihrich

    Chap. 6. Decision Making

    Marginal Analysis
    Marginal analysis is to compare additional revenues and the additional cost arising from increasing output

    2004 H. Weihrich

    Chap. 6. Decision Making

    Cost Effectiveness Analysis


    Cost effectiveness analysis seeks the best ratio of benefit and cost

    2004 H. Weihrich

    Chap. 6. Decision Making

    Selecting an Alternative: Three Approaches


    When selecting from among alternatives, managers can use: 1. Experience, 2. Experimentation, and 3. Research and analysis.

    2004 H. Weihrich

    Chap. 6. Decision Making

    10

    Programmed And Nonprogrammed Decisions Programmed decisions are used for structured or routine work Nonprogrammed decisions are used for unstructured, novel, and ill-defined situations of a nonrecurring nature

    2004 H. Weihrich

    Chap. 6. Decision Making

    11

    Creativity and Innovation


    Creativity refers to the ability and power to develop new ideas Innovation means the use of new ideas

    2004 H. Weihrich

    Chap. 6. Decision Making

    12

    The Creative Process


    1. 2. 3. 4. The creative process is seldom simple and linear It generally consists of four overlapping and interacting phases: Unconscious scanning Intuition Insight Logical formulation or verification

    2004 H. Weihrich

    Chap. 6. Decision Making

    13

    Rules for Brainstorming


    1. No ideas are criticized 2. The more radical the ideas are, the better 3. The quantity of idea production is stressed 4. The improvement of ideas by others is encouraged

    2004 H. Weihrich

    Chap. 6. Decision Making

    14

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