1. Explain the difference between decision making and problem solving. In its narrowest sense, decision making is the process of choosing from among various alternatives.
Problem solving is the process of determining the appropriate responses or actions necessary to alleviate a deviation from some standard or desired level of performance. Fr01n a practical perspective, almost all managerial decisions involve solving or avoid ing problems, and therefore, it is not necessary to distinguish between managerial deci sion making and managerial problem solving.
2. Distinguish betvveen programmed and nonprogrammed decisions. Programmed deci sions are reached by following an established or systematic procedure. Nonprogrammed. decisions have little or no precedent and generally require a more creative approach by the decision maker.
3. Explain the intuitive approach to decision making. In the intuitive approach managers maJse decisions based on hunches and intuition. Emotions and feelings play a major role in this approach.
4. Discuss two rational approaches to decision making. One rational approach, optimiz ing, involves the following six steps: (1) Recognize the need for a decision; 2) Estab lish, rank, and weigh the criteria; (3) Gather available information and data; (4) Identify possib le alternatives; (5) Evaluate each alternative with respect to all criteria; and
(6) Select the best alternative . A second rational approach, satisficing , is based on the principle of bounded rationality. In the satisficing approach, the decision maker selects the first alternative that meets his or her minimum standard of satisfaction.
5. List the different conditions under which managers make decisions . Managers nor mally make decisions under the conditions of certainty, risk, or uncertainty