Chapter 6
Decision Making: The Essence of the Manager’s JobANNOTATED OUTL
I Everyone manager should strive to make good decisions because the overall quality ofmanagerial decisions has a major influence on organizational success or failure. Theconcept of decision making is explored in this chapter.2.THE DECISION-MAKING PROCESSAdecisionis a choice made from two or more alternatives. Thedecision-makingprocessis a set of eight steps that include identifying a problem, selecting analternative, and evaluating the decision’s effectiveness. (SeeExhibit6-1andPowerPoint slide 6-6for an illustration of the decision-making process.)A.Step 1:Identifying a problem.Aproblemis a discrepancy between an existingand a desired state of affairs. In order to identify a problem, you as a managershould recognize and understand the three characteristics of problems:1.You must be aware of the problem. Be sure to identify the actualproblem rather than a symptom of the problem.2.You must be under pressure to act. A true problem puts pressure on themanager to take action; a problem without pressure to act is aproblem that can be postponed.3.You must have the authority or resources to act. When managersrecognize a problem and are under pressure to take action but do nothave necessary resources, they usually feel that unrealistic demandsare being put upon them.B. Step 2:Identifying decision criteria.Decision criteriaare criteria that define whatis relevant in a decision.C. Step 3:Allocating weights to the criteria. The criteria identified inStep 2 of thedecision-making process do not have equal importance, so the decision makermust assign a weight to each of the items in order to give each item accuratepriority in the decision.Exhibit6-2andPowerPoint slide 6-9list the criteriaand weights for Joan’s franchise purchase decision.D.Step 4:Developing alternatives. The decision maker must now identify viablealternatives that could resolve the problem.E. Step 5:Analyzing alternatives. Each of the alternatives must now be critically