Chapter 6
Making Decisions
LEARNING OBJECTIVES
After studying this chapter, you should be able to:
1.
2.
3.
4.
5.
6.
Recognize that decision making is performed at all management levels
Distinguish between formal and informal approaches to decision making
List the steps in the decision-making process
Identify the environmental factors that influence decision-making
Describe the personal attributes of a manager that influence decision making
Discuss the value of group decision making and identify three techniques of group
decision making
7. Explain three quantitative techniques for decision making and describe the situations in
which each is appropriate
8. Determine strategies a manager can use to create a more effective decision making
environment
KEY TERMS
alternatives
brainstorming
decision
decision making
decision tree
Delphi technique
electronic commerce
game theory
groupthink
just-in-time inventory
limiting factors
maximize
nominal group technique
nonprogrammed decision
opportunities
outside-the-box-thinking
payback analysis
problem
programmed decisions
queuing models
satisfice
simulation
symptom
tunnel vision
Vroom and Yetton decision tree
waiting-line models
© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or in part.
CHAPTER OUTLINE
I.
INTRODUCTION
A. What You Need to Know About Decisions
B. What Decision-Making Is
C. Decision Making, Problem Solving, and Opportunity Management
II. UNIVERSALITY OF DECISION-MAKING
III. APPROACHES TO DECISION-MAKING
A. Programmed and Nonprogrammed Decisions
IV. SEVEN-STEP DECISION-MAKING PROCESS
A. Defining the Problem or Opportunity
B. Identifying Limiting Factors
C. Developing Potential Alternatives
D. Analyzing the Alternatives
E. Selecting the Best Alternative
F. Implementing the Decision
G. Establishing a Control and Evaluation System
V. ENVIRONMENTAL INFLUENCES ON DECISION MAKING
A. Degree of Certainty
B. Imperfect Resources
C. Internal Environment
1. Superiors
2. Subordinates
3. Organizational Systems
D. External Environment
VI. INFLUENCE OF MANAGERIAL STYLE ON DECISION MAKING
A. Personal Decision-Making Approaches
1. Rational/Logical Decision Model
2. Intuitive Decision Model
3. Predisposed Decision Model
B. Ability to Set Priorities
C. Timing of Decisions
D. Tunnel Vision
E. Commitment to Previous Decisions
F. Creativity
VII. GROUP DECISION MAKING
A. Brainstorming
B. Nominal Group Technique
C. Delphi Technique
D. Advantages and Disadvantages of Group Decision Making
1. Advantages
2. Disadvantages
VIII. QUANTITATIVE DECISION-MAKING TECHNIQUES
A. Decision Trees
B. Payback Analysis
C. Simulations
IX. CREATING AN ENVIRONMENT FOR EFFECTIVE DECISION MAKING
© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or in part.
Enrichment Vignette
Have you ever heard a manager being referred to as “decisive”? Why was the person described
in that way? In many instances, it may have been because the manager made decisions very
quickly—perhaps almost instantly. Perhaps the manager was fortunate in that the more
important decisions turned out okay, although in many cases that may have been a matter of
luck.
Often, such managers did not take time to correctly identify the problem but may have simply
reacted to the symptom of the problem. In trying to solve it (whether solving the real problem or
only treating the symptom), the manager may have simply seized upon the first thing that came
to mind instead of wondering whether there might be an even better solution. Normally you
should avoid that kind of “decisiveness.” Why?
Simply reacting to a situation and not determining the difference between the real, underlying
problem and the symptom simply means that the real problem will not be solved—unless it is by
pure accident. Even if one has identified the problem correctly and simply selects the first
solution that comes to mind, one may be overlooking an even better solution that might have
been found if one were to take a little more time to look for alternative solutions. In such cases,
it may be good to take a little more time to make a decision.
On the other hand, there are cases in which it is best to make instant decisions. For example, in
a life-threatening emergency in which disaster may occur unless immediate action is taken, it
may be that there is no time to thoughtfully define the real problem, look for alternative
solutions, and select the best alternative. Also, there may be some problems in which the time
and money spent to go through an elaborate problem-solving/decision-making process exceed
the value of the problem—there is no point in spending a thousand dollars to solve a ten-dollar
problem. In such a case, it may make sense to go with the first solution that might seem to work.
LECTURE OUTLINE
The outline below (the lecture outline) is referenced to the above chapter outline and contains
supplementary material to enhance your discussion of the chapter, but it is organized somewhat
differently. As a result, you have a choice: by using what is in the outline below, (1) you may
present the above chapter outline material in a different sequence, or (2) you may use the
chapter outline references in the outline below to present the lecture outline material in the
same sequence as the chapter outline.
I.
INTRODUCTION (CHAPTER OUTLINE: SECTION I)
II.
WHAT YOU NEED TO KNOW ABOUT DECISIONS
1. All managers engage in problem solving and decision making.
2. This process is obviously apparent at all organizational levels.
3. Individual management decisions affect the entire organization.
4. A manager makes decisions constantly while performing the functions of
planning, organizing, staffing, leading, and controlling.
5. Decision making is not a separate, isolated function of management, but rather a
common core of the other functions. That is, it applies to all functions.
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duplicated, or posted to a publicly accessible website, in whole or in part.
6.
7.
III.
DECISION MAKING DEFINED
A. Decision Making, Problem Solving, and Opportunity Management
B.
Universality of Decision Making
C.
Approaches to Decision Making
D.
Programmed and Nonprogrammed Decisions
1.
2.
3.
IV.
Decision making is universal and applicable throughout an organization.
Whether managers realize it or not, they must go through a process to make
successful decisions on a regular basis.
Manager approaches to decision making vary with the problem(s) and/or
opportunities. Decisions can be programmed or nonprogrammed.
Predictable circumstances and solutions are programmable.
Unprecedented and partially defined situations are addressed with
nonprogrammed decision techniques.
SEVEN-STEP DECISION-MAKING PROCESS (CHAPTER OUTLINE: SECTION IV)
A.
Defining the Problem or Opportunity
1.
2.
3.
4.
5.
B.
Identifying Limiting Factors
1.
2.
C.
Defining the problem is the critical step.
The accurate definition of a problem affects all the steps that follow; if a problem
is inaccurately defined, every other step in the decision-making process will be
based on that incorrect point.
A manager needs to focus on the problem and its causes, not the symptoms.
A tool a manager can use is the funnel approach.
The consequences of not properly defining the problem are wasted time and
energy.
Limiting factors are those constraints that rule out certain alternative solutions.
Limitations include the following resources: personnel, money, facilities,
equipment, and time.
Developing Potential Alternatives
1.
2.
3.
4.
5.
6.
Alternatives are solutions to the problem.
The alternatives should eliminate, correct, or neutralize the problem.
While building the list of alternatives, it is wise to avoid being critical or
judgmental about any alternative that occurs to you or those assisting you.
Initially, the alternatives should be separate and distinct solutions to the problem.
After the initial list is developed, variations will develop and combinations will
emerge.
Sources for alternatives include past experience; other persons whose opinions
and judgments are respected; the practice of successful managers; group
© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or in part.
opinions through the use of task forces and committees; and the use of outside
resources, including managers in other organizations.
D.
Analyzing the Alternatives
1.
2.
E.
Selecting the Best Alternative
1.
2.
F.
The purpose of this step is to decide the relative merits of each alternative.
Depending on the type of problem and the potential solutions developed, the
manager might need to make a more thorough analysis by applying specific
decision-making aids.
Sometimes the optimal solution is a combination of several of the alternatives.
Find a solution that appears to offer the fewest serious disadvantages and the
most advantages.
Implementing the Decision
1.
2.
3.
Managers are paid to make decisions, but they are also paid to get results from
these decisions. Results must follow decisions.
Everyone involved with the decision must know what he or she must do, how to
do it, why to do it, and when to do it.
Programs, procedures, rules, or policies must be thoughtfully put into effect.
Carelessness at this stage causes problems.
G. Establishing a Control and Evaluation System
1.
2.
Ongoing actions need to be monitored. They cannot be forgotten.
The system should provide feedback on how well the decision is being
implemented, what the results are, and what adjustments are necessary to get
results that were wanted when the solution was chosen.
Enrichment Vignette
According to David Fagiano, president and chief executive officer of The American Management
Association, it is the lack of precision that makes decision making so difficult for some people.
Every decision is a gamble; the bigger the decision, the bigger the gamble. By developing a
process to make decisions a person is provided a structural framework to add precision. Those
that have no framework wind up endlessly sifting data for a definitive answer that simply is not
there.
© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or in part.
V.
ENVIRONMENTAL INFLUENCES ON DECISION MAKING
(CHAPTER OUTLINE: SECTION V)
A.
Degree of Certainty
1.
2.
3.
4.
B.
Decisions are made within conditional aspects that surround certainty, risk, and
uncertainty.
Low risk, high certainty allows for more decision-making confidence.
A manager’s confidence is lower with uncertainty and/or a high element of risk.
The amount of confidence correlates with the amount of certainty.
The degree of certainty in decision making affects the process and the decisionmaking.
a. Decisions made under conditions of certainty mean that the manager has
perfect knowledge.
1. The manager has had to make similar decisions, the alternatives are
known, and the consequences of each alternative are fully understood.
2. In this situation, the manager chooses the alternative known to get the
best results.
3. Decisions made under conditions of certainty can mean that a manager
can rely on a policy or standing plan; the decision will be made
routinely.
b. Decision making under conditions of risk provides a more difficult decisionmaking environment.
1. The manager knows what the problem is, knows what the alternatives
are, but does not know how each alternative will work out even though
the manager knows the odds (probabilities) of possible outcomes.
2. The manager must choose the best alternative available.
c. Decision making under conditions of uncertainty is like being a pioneer.
1. In this situation, the manager is not able to determine the exact odds
(probabilities) of the potential alternatives available.
2. The manager is unable to predict with any accuracy the probable results
of choosing any one alternative.
Imperfect Resources
1.
2.
3.
4.
5.
All managers would ideally like to maximize their decisions; they want to make
the best decisions.
To accomplish this, managers need to have the ideal resources—information,
time, personnel, equipment, and supplies.
Realistically, managers operate in an environment that normally does not provide
ideal resources—they may lack the proper budget or the desired quantity or
quality of information.
Managers do not always have perfect information or the maximum amount of
time.
They choose to satisfice—to make the best decision possible with the
information, resources, and time available.
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duplicated, or posted to a publicly accessible website, in whole or in part.
C.
Internal Environment
1.
2.
3.
4.
5.
6.
7.
8.
D.
Superiors
Subordinates
Different decision-making environments dictate different responses from
managers.
Decisions will never have a chance to affect the organization and solve problems
unless they receive acceptance and support.
A manager’s decision-making environment is greatly structured by superiors,
subordinates, and organizational systems.
The manager’s boss is a major factor in the operating environment.
Subordinates also are a major factor in a manager’s decision-making
environment.
a. A manager must evaluate the level of the subordinates’ involvement which
can range from no input to full responsibility for a decision that the manager
must then accept.
b. The possible degrees of involvement as outlined by Victor Vroom are:
1. The manager solves the problem or makes the decision by using
information available at that time.
2. The manager obtains the necessary information from subordinates,
then decides on the solution to the problem.
3. The manager shares the problem with relevant subordinates
individually, getting their ideas and suggestions without bringing them
together as a group. The manager then makes the decision.
4. The manager shares the problem with the subordinates collectively,
obtaining their inputs. The manager then makes the decision.
5. The manager shares the problem with the subordinates as a group, and
together they make the decision.
c. Two factors influence the option a manager will use—the objective quality of
the decision needed and the degree of acceptance by the subordinates.
1. A decision is considered to have a high degree of objective quality if it is
made with a logical, rational, step-by-step approach.
2. A decision is considered to have a high degree of acceptance if it has
been made with the input of those affected by it.
3. A manager can utilize the Vroom and Yetton model to determine the
appropriate style. This model is known as a decision tree.
Organizational systems influence decision making.
a. Every organization has policies, procedures, programs, and rules that serve
as boundaries for a manager’s decision making.
b. If they pose major barriers, it may be a wise strategy to delay a decision and
attempt instead to get the system modified.
External Environment
1.
A manager must consider external forces, or the external environment, when
using the decision-making process.
1. Customer, competitors, and government agencies are examples of
external forces that cannot be controlled, yet they can influence
decisions.
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duplicated, or posted to a publicly accessible website, in whole or in part.
VI.
INFLUENCE OF MANAGERIAL STYLE ON DECISION MAKING
(CHAPTER OUTLINE: SECTION VI)
A.
Personal Decision-Making Approaches
1.
2.
Three influences are personal attributes (the manager’s personal decisionmaking approach), the ability to set priorities, and the timing of decisions.
Personal decision-making approaches:
a. Rational/logical decision model. The manager who uses this model employs
a step-by-step process. Decisions are made on facts and logic using
payback analysis, decision trees, and research.
b. Intuitive decision model. Managers who rely on “gut” decisions rely on their
feelings. The manager who relies on intuition from long-range decision
making courts disaster. The best decisions are a result of a blend of the
decision maker’s intuition and the rational step-by-step approach.
c. Predisposed decision model. This approach is evidenced by a manager
who decides on a solution, then gathers the material to support the decision.
Enrichment Vignette
The phenomena of Executive ESP (E-ESP) is being studied. Successful leaders have been
called upon to make difficult decisions with little information, and many of those decisions—
often based on no more than hunches—turn out to be correct.
Because they are businesspeople, these leaders have been hesitant to discuss in public
that they have relied on psychic ability. But now Alexander M. Poniatoff, founder of Ampex
Corporation, and William W. Keeler, retired board chairman of Phillips Petroleum, are among
numerous leaders who have disclosed that decisions they made were based on strong feeling
and were sometimes contrary to logical judgment.
3.
B.
Ability to Set Priorities
1.
2.
C.
Regardless of the model favored by the manager, a critical element is for the
manager to know what his or her tendencies are in decision making and to move
toward the rational model. A problem can be created when a manager believes
he or she is using one approach when in reality it is a different model.
A factor that can influence a manager’s success is the ability to establish
priorities for decision-making.
Each manager may have a different and unique set of criteria.
Timing of Decisions
1.
2.
D.
After a decision is made, it must be translated into action.
Good timing plays an important part in successfully implementing a decision;
improper timing can harm the best decision.
Tunnel Vision
1. Many causes lead to tunnel vision.
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duplicated, or posted to a publicly accessible website, in whole or in part.
2.
3.
E.
Commitment to Previous Decisions
1.
2.
3.
F.
The “glass ceiling” of promotability is a prime example of this phenomenon.
Lack of maturity, inadequate education, or personal “hang ups” are indicative of
near-sighted thought and behavior.
Decisions often build upon other decisions.
Commitments from previous decisions can influence subsequent decisions.
Many decisions do not stand alone. One decision may “create” another.
Creativity
1.
2.
Imagination and innovation benefit decision making.
Frequently, organizational circumstances curtail creative thought and action.
Bureaucratic, traditional organizations discourage thought.
VII. GROUP DECISION MAKING (CHAPTER OUTLINE: SECTION VII)
A.
Brainstorming
1.
2.
B.
Nominal Group Technique
1.
2.
3.
C.
Equal participation is an absolute. Shared responses prevail.
Individuals must be encouraged to exercise creativity.
This technique operates within a structured venue of organization.
Delphi Technique
1.
2.
D.
Maximizing group inputs without interruptions is very important.
Freedom of expression and a mutual sense of contribution and sharing is key to
effective brainstorming. Everyone jumps on this bandwagon!
This technique was developed by the RAND Corporation to forecast the potential
effects of nuclear attacks upon this country.
Equal participation of group consensus making aligns individual experts by
repeatedly contributing and corresponding from dispersed locations.
Advantages and Disadvantages of Group Decision Making
1.
2.
3.
4.
5.
6.
Advantages
Disadvantages
Are two heads always better than one? Maybe but not always!
Are more perspectives and perceptions always welcome? If time permits!
Does the concept of groupthink minimize the power and opportunity of collective
thought? Yes, often it does!
These and many more questions must be addressed to size up the pros and
cons of individual versus group decision making. (Ask the students!)
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duplicated, or posted to a publicly accessible website, in whole or in part.
VIII. QUANTITATIVE DECISION-MAKING TECHNIQUES (CHAPTER OUTLINE: SECTION
VIII)
A.
Decision Trees
1.
2.
3.
4.
B.
Payback Analysis
1.
2.
3.
C.
Payback analysis can be used if a manager needs to evaluate capital-purchasing
alternatives.
It is an approach the manager uses to rank alternatives according to how long
each takes to pay back its initial cost.
The strategy is to choose the alternative that has the quickest payback of the
initial cost.
Simulations
1.
2.
3.
IX.
A decision tree can be used to allow a manager to show graphically which
actions could be taken and how these actions relate to future events.
A decision tree is a pictorial presentation of a potential decision.
The tree is composed of branches from decision points (squares) and chance, or
competitive moves (circles). The outcomes are shown to the right of the tree’s
branches.
An additional refinement for the decision tree approach is to use it for statistical
decision theory.
Simulations or models can be abstract or physical.
Queuing models or waiting-line models can be helpful to restaurant, grocery
store, bank, and school registration managers.
Game theory attempts to predict behavioral patterns within competitive
situations.
CREATING
AN
ENVIRONMENT
(CHAPTER OUTLINE: SECTION IX)
FOR
EFFECTIVE
DECISION
MAKING
4. Strategies for Effective Decision Making
1.
Managers face complex and stressful challenges to their decision-making
practices and techniques.
2.
3.
The environment of decision making is a complicated, frequently changing, and
dynamic place to operate within.
Ireland, Hill, and Williams list ten features to create an effective environment of
decision making for managers.
SUGGESTED RESPONSES TO REVIEW QUESTIONS
1.
For each managerial level, provide examples of the kinds of decisions that managers
make at that level.
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duplicated, or posted to a publicly accessible website, in whole or in part.
Managers at all levels of the organization are engaged in decision-making. The
decisions made by top managers—dealing with the mission of the organization and
strategies for achieving it—impact the total organization. Middle-level managers, in
turn, focus their decision making on implementing the strategies, as well as on budget
and resource allocation. Finally, first-level managers deal with day-to-day operations
of a repetitive nature.
2.
What factors influence whether a manager should use a formal or informal approach
to decision making?
Because problems and opportunities are seldom identical, a manager’s approach to
decision making varies. A manager can resolve relatively simple problems and
recurring problems by following prior patterns.
Complex or uncertain problems
benefit from formal decision-making processes. Circumstances determine the
appropriate technique or whether it should be programmed or non-programmed.
3.
Identify each step in the decision-making process, and describe briefly what should
happen in each step.
a.
b.
c.
d.
e.
f.
g.
4.
Define the problem or opportunity. Accurately defining the problem is the first
and most critical step. If it is not defined accurately, it affects all other steps that
follow.
Identify limiting factors. These are the constraints that rule out certain alternative
solutions.
Develop potential alternatives. The alternatives should eliminate, correct, or
neutralize the problem.
Analyze the alternatives. The purpose of this step is to decide the relative merits
of each of the alternatives. The positives and negatives need to be identified.
Select the best alternative. Select the alternative or combination of alternatives
that offers the fewest serious disadvantages and the most advantages.
Implement the decision. In this step everyone involved with the decision must
know what he or she must do, how to do it, why, and when.
Establish a control and evaluation system. This system should provide feedback
on how well the decision is being implemented, what the results are, and what
adjustments are necessary to get the results that were wanted when the solution
was chosen.
What four factors in the decision-making environment influence the decision-making
process and the decision maker?
The four factors include the degree of certainty (certainty, risk, and uncertainty),
limited resources (maximizing or satisficing), the internal environment (superiors,
subordinates, and organizational systems), and the external environment (customers,
competitors, government agencies, and society at large).
5.
What are the three personal decision-making approaches a manager may use? What
are the characteristics of each?
The three personal decision-making approaches are the rational/logical decision
© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or in part.
model, the intuitive decision model, and the predisposed decision model.
The characteristics of each are:
Rational/logical decision model. This approach uses a step-by-step process. It
focuses on facts and logic while eliminating intuitive judgments. Reliance is on the
steps and on decision tools such as payback analysis, decision tree, and research.
Intuitive decision model. The managers who use this approach avoid statistical
analysis and logical processes. These managers are “gut” decision makers who rely
on their feeling about a situation.
Predisposed decision model. This approach is evidenced by a manager who decides
on a solution, then gathers material to support the decision.
6.
Identify three group decision-making techniques? What is the value of each?
Three group decision-making techniques are brainstorming, the nominal group
technique and the Delphi technique.
Brainstorming allows for active group
participation. The potential synergist effect is that a vast array of alternatives,
opinions, and decisions will come forth. The nominal group technique provides for
equal participation and individual creativity. The Delphi technique provides structure,
leads to consensus, and emphasizes equal participation.
7.
Under what circumstances would you use payback analysis? What purpose does
payback analysis serve?
If a manager needs to evaluate capital-purchasing alternatives, a sound strategy is to
apply payback analysis. With payback analysis, the manager ranks alternatives
according to how long each takes to pay back its initial cost. The strategy is to
choose the alternative with the quickest payback of the initial cost.
8.
Name three strategies a manager can use to create a more effective decision-making
environment?
Student answers will vary.
INSTRUCTIONAL EXPLANATION: DISCUSSION QUESTIONS FOR CRITICAL THINKING
These thought-provoking questions are provided by the authors for each chapter as primers for
student discussion. This method of questioning ensures that the students have read the
assigned materials or content. These questions are presented to generate thinking and
discussion. They can be used as supplemental homework assignments and/or class
discussions that center on specific critical thinking issues and applications.
It is important that students are able to respond from their experiences and through their
perceptions as well as incorporate the specific course content into their reasoning, explanations,
descriptions, and individualized contributions. Most of these questions cannot be answered in a
right/wrong fashion.
Instead, student responses and/or group discussions should be
© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or in part.
encouraged by the instructor to bring out individualized critical thinking as opposed to absolute
correct answers.
© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or in part.
WEB 2.0 EXERCISES
Facebook Privacy Policy
http://www.facebook.com/full_data_use_policy
Facebook Data Use Policy Contents
Date of Last Revision: September 23, 2011
Information we receive and how it is used
 Information we receive about you
 Public information
 Usernames and User IDs
 How we use the information we receive
 Deleting and deactivating your account
Sharing and finding you on Facebook
 Control each time you post
 Control over your profile
 What your friends share about you
 About Pages
Sharing with other websites and applications
 About Facebook Platform
 Controlling what information you share with applications
 Controlling what is shared when the people you share with use applications
 Logging in to another site using Facebook
 About social plugins
 About instant personalization
 Public search engines
How advertising works
 Personalized ads
 Ads + social context
 Sponsored stories
 Featured content
Minors
and
Some other things you need to know
Safety
1.
How safe are you on the Internet? Take the security quiz and test your knowledge.
How can you make your Internet experience safer, more secure, and more private?
2.
Facebook began with a closed, friends-only model, and as a result, most college
students didn’t worry about their privacy. Today, Facebook has moved to a more
open network, resetting members’ default privacy settings. Many uses do not realize
that Facebook offers privacy controls and security features. But, members must take
extra steps to protect personal information. Be proactive and go through all privacy
settings. Read Facebook’s Privacy Policy and Privacy Guide. Which extra steps will
you implement, so that not everyone can see everything that you post?
3.
Even if you take precautions on line, it’s possible your information will be publicly
disseminated. For example, friends with access to your site can forward the
information to others. Comment on the following statement, “Nothing that you can put
online is private…regardless of any privacy setting.”
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duplicated, or posted to a publicly accessible website, in whole or in part.
Student’s answers will vary. The answers should demonstrate a strong knowledge of the
chapters’ main objectives as they apply to Facebook. Class discussion may be helpful in
eliciting creative responses.
SUGGESTED RESPONSES TO EXPERIENTIAL LEARNING CASE:
Failing and Succeeding
Apple Inc. –
The student answers to these questions will vary greatly. Similar to the critical thinking
questions provided throughout the text, these questions allow students the opportunity to think
in a broad, creative sense with many variables or choices for response. It is important that the
instructor encourage the students to “back up” or support their answers with specific subject
content from the text as well as provide a rational/logical approach to their comments.
ADDITIONAL CASE PROBLEMS WITH SUGGESTED ANSWERS
First Federal Savings & Loan
First Federal Savings & Loan is a relatively large organization employing almost a thousand
people in several locations throughout the city. In recent years, the company has noticed a
significant increase in absenteeism, particularly in the clerical and nonmanagerial ranks. The
payroll expense associated with the problem has been growing, and supervisors and managers
have expressed annoyance at constantly having to find someone to fill in for an absent
employee. Most attribute the cause of the problem to the generous sick leave policy (twenty
paid sick days per year).
For some time, there have been discussions regarding possible ways of reducing the
absenteeism. The executive committee of the company has agreed to entertain solutions from
all managers and then decide which, if any, should be implemented. It was announced at one
of the managers’ meetings recently that supervisors and managers should submit their ideas in
writing to the executive committee.
After several weeks, the suggestions were collected and distributed to all managers and
supervisors. There was some duplication among the ideas, but the list is as follows:
1. Abolish the present sick leave policy, and have no paid sick leave except for
individuals who produce a medical certificate.
2.
Reduce the number of paid sick days from twenty to some lower number. (Most
recommended ten but a few suggested the number be as low as five.)
3.
Leave the sick leave policy alone, but point out the problems with high absenteeism.
4.
Start a demerit system in which sick days taken would be translated into demerits.
These demerits would be used for promotions, transfers, and layoffs.
5.
Allow employees to trade sick days not taken for vacation days. After a year, unused
sick days could be used as vacation days in the following year at a ratio of 2:1 (one
vacation day for every two sick days).
6.
Create a new policy that would state that any absent employee who was discovered
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7.
not to be sick would be fired.
Have a cash bonus system in which employees who had a perfect attendance record
for the year would be awarded $100 cash.
8.
Publish the names of those with perfect attendance records in the monthly newsletter.
9.
Establish a lottery in which every employee with perfect attendance for the week
would be eligible for a draw for $10.
Source: From Jerry L. Gray, Supervision: An Applied Behavioral Science Approach to Managing People
(Boston: Kent Publishing Company, 1984), pp.197-198. Copyright 1984 Wadsworth, Inc. Reprinted by
permission of PWS-KENT Publishing Company, a division of Wadsworth, Inc.
QUESTIONS
1.
Has the First Federal management team applied the decision-making process?
Explain your answer.
Based upon the solutions that make up management’s recommendations, one would
have to say that each author has a somewhat different interpretation of just what the
problem is. The instructions and the list indicate that the steps in the problem-solving
process were not followed.
First Federal seems to have defined its problem as one of growing absenteeism. The
listed alternative solutions make certain assumptions about the reasons for it, which
may or may not be valid. Management seems to have focused on a symptom but not
on the causes. How big a problem is absenteeism? Where are absentees the
greatest sources of difficulties? An investigation has not been made to determine
what the real problem or problems are, so step 1 has not been performed properly.
Limiting and critical factors have not been identified. Developing potential alternatives
to solve a problem that is defined differently by all the parties involved will prove of
little use. The alternatives will, in turn, be evaluated by persons who themselves are
vague about what the problem is that they are attempting to solve.
2.
What information does First Federal need to solve the problem?
Management first needs to know what its problem is. Until research is done to
determine what is happening, how, where, why, and who is involved, no meaningful
definition of the problem can be made. Without a problem clearly defined, the
remaining problem-solving steps cannot and should not be taken.
This question should get students on the path of attempting to define the problem or
problems at First Federal. Things to investigate and questions that students want
answered can be listed. The list might look like this:


How many people are absent each day in each department of the company?
Where is absenteeism the greatest? What are the probable causes for the
absences?
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duplicated, or posted to a publicly accessible website, in whole or in part.




What are the reasons given by those who are absent? Do the reasons have
validity?
Has our work force grown so that rates of absenteeism are about the same
even though more people are absent?
Is any one person taking absences that seem excessive? Has a manager
investigated the situation and dealt with that person’s problem? If not, why not?
Is there one cause that could explain an increase in companywide absenteeism
such as flu or other widespread cause?
Without answers to these questions and several more that students will generate,
efforts at First Federal will be in vain.
3.
How should First Federal acquire the needed information?
The first step is to get the numbers. How many absences are they talking about?
What percentage of the work force is absent each day? Getting the answers will
mean digging in the files, talking to supervisors, talking with the absentees, and
involving all levels in a search for the causes and consequences of employee
absenteeism. Employees, through the investigative process, will become aware that
management is focusing on absenteeism and its impact on the organization. People
who may be abusing the generous sick leave will be put on notice that things may be
changing.
Application to students: New students often operate with a good degree of
uncertainty, as would be the case with a totally new course or professor. And,
students will be operating under conditions of risk. How should students acquire the
needed information regarding a school environment?
The primary aids students may wish to use are the involvement of others and decision
trees. Having the background of several semesters, trimesters, or quarters, students
have their approach of course selection somewhat routinized so a programmed
approach is likely from many. But other students, faculty advisors, and counselors will
be the most valuable aids. For students headed to a four-year campus, the catalog
and input from that college will be quite useful. Students should tailor their work at a
junior college to fit a specific school they intend to transfer to as soon as they make
that decision. This will help them to avoid transfer problems and repetition to courses
at their new school.
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duplicated, or posted to a publicly accessible website, in whole or in part.
The Typing Pool: An Incident From An Era In Which Such Pools Were Common
Linda Grover was promoted to supervisor of the secretarial pool four weeks ago. She had
worked as a typist and transcriber for three years in the pool she now supervises. Her
promotion was based on her outstanding skills and her ability to finish her work on time on a
regular basis. Linda’s old position is to remain vacant until budget restrictions are relaxed.
Linda had wanted to be an executive secretary but no openings were available when this
promotion came her way. She still hopes that she can become an executive secretary and
plans to apply the moment a position opens up.
In her new job, Linda assigned the work to her people, reviewed it for completeness, and
pitched in herself when the group was especially busy. Before her promotion, typing jobs had
been assigned on a first-in, first-out basis; each job was given to the first person available to
handle it. Because all the people in the pool were skilled at their jobs, the work seemed to flow
out of the unit almost always on time. Since her promotion, Linda had been considering some
possible changes.
Many of the more senior members of the pool—four of the six people in the pool—have
expressed an interest in certain kinds of projects. Rosa, for instance, likes letters and does
them quickly and perfectly. Bob likes statistical and numerical reports with lots of tabulation and
tables. Linda met with her group one morning and made the following proposals:
1.
2.
All employees were to give her their preferences. When possible, those preferences
would dictate assignments.
Assignments would be awarded on the basis of seniority and preference.
Linda asked the group to vote on the proposals. The vote was four to two in favor.
Soon after implementing her new procedures, Linda ran into several problems. The least
senior people were getting the most difficult work, or so they thought, and were very unhappy.
A report that Bob would have ordinarily received went to someone else because Bob was not
free to handle it when it came up for assignment. The letters were piling up because Rosa
insisted that they wait for her, she being the most senior member of the pool. The work was
slowing down and Linda was getting quite concerned. Linda was so busy this week that she
was thinking of using overtime for the first time to get the work out. This morning, two reports
came back to Linda with serious errors and would have to be retyped. Both were the products
of the least senior people.
Linda made some notes and called the two junior members of her department into her
office. She showed them the reports that had been returned and asked them what had gone
wrong. They had no satisfactory answers as far as Linda was concerned. She told them that
from now on, their work would be closely scrutinized and no work would leave their desks until it
was up to their usual high standards.
Linda was depressed. She hoped the group would be more cooperative. After all, she had
their best interests at heart. They had complained that seniority meant nothing and she had
done something about that. She had hoped they would continue to be as good as they had
been when she had been one of them. She was working as hard as any of the pool members
were. With a sigh, she picked up her phone and dialed personnel.
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duplicated, or posted to a publicly accessible website, in whole or in part.
QUESTIONS
1.
What do you think of Linda’s proposals?
This question asks students to apply the decision-making process to Linda’s
suggestions. Each has specific pros and cons and limiting factors. This case points
out the dangers with “hold-a-vote” for alterations in work routines. The vote was four
to two along seniority lines. Four people might be happy but two are not. Their work
has changed in quality since the proposals were implemented. What will happen as
time goes on is anyone’s guess.
Linda’s first proposal sounds good but what about conflicts in preferences? What
happens when employees’ preferences are not available? Do they remain idle until
one such assignment is available or take anything that needs doing? Linda is
apparently letting preferences allow work to pile up as in the case of letters and Rosa.
Linda’s second proposal takes into account seniority first—then preferences. Suppose
the two most senior people want the same type of work? Who will get it, the most
senior? In all cases? What will the least senior people get? Chances are Linda is
giving them whatever the other, more senior people do not want.
2.
What should Linda have done before suggesting changes in work assignments?
Linda should have analyzed the flow of work more carefully. She could, for example,
find out what people enjoyed doing least and promise that such work would come to
them only rarely, especially when someone else may want to do such assignments.
Work no one likes can be spread evenly around all personnel to avoid upsetting any
one person. Linda had a good operation in which work got out on time and no
overtime was necessary. She now has idle people and a need for overtime.
Scheduling may or may not be the entire reason. The pool is shorthanded and
workloads may be increasing. The serious errors from the least senior people may be
the result of unhappiness and discouragement with the constant need to work on
what they think are the most difficult assignments. Or they may simply be trying to
get Linda’s attention and initiate some kind of change.
3.
What should Linda do now?
Linda must analyze what is going wrong before making any further changes. After
she has the facts in hand, she can meet with her people to discuss each problem and
possible alternatives. This she should do only after analyzing the situation and
problems on her own so that she will know limiting factors, advantages, and
disadvantages for her several alternatives, and have some specific recommendations
to make to the group. She need not discuss all problems with them, however.
A modification in work assignment could be made along these lines:
 Work will be assigned on a first-in, first-out basis to those that have a preference
for it, when possible. When two or more people prefer the same work, it will
alternate between or among them, beginning with the most senior person
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available.
 Work will not be allowed to pile up in order to preserve it for one person. The
typists are not specialists, although some may be better at certain jobs than
others.
 All will share in the least desirable jobs on a rotating basis.
 Linda must keep control of work assignments.
 Linda must divide her decisions into two categories:
(1) those who need no worker input or those for which worker input may
be dangerous to solicit, and
(2) those that need a degree of worker acceptance.
 Linda must move from her intuitive decision model to the rational/logical
decision model.
 Linda should not allow preferences or seniority to get in the way of smooth
work flow and on-time completions.
 Before asking for overtime, Linda must be able to prove it is the only solution.
This will mean an in-depth knowledge of what is going wrong and why. She may
be able to justify a new person instead of asking for overtime. Her promotion has
left her unit shorthanded.
ON THE JOB VIDEO CASE SOLUTIONS: EVO GEAR: DESIGNING ADAPTIVE
ORGANIZATIONS
Discussion Questions:
1. How important is institution and past experience to Evo’s decision making process?
2. Bryce Phillips, the founder, seemed to feel that his eight principles should be
followed continually. Do you agree with that approach, or do you feel that there
should be sufficient flexibility to take advantage of opportunities, even if it means
bending the principles at times?
3. When you make an important decision, do you always start with the first of the
seven steps and then go through each one in exact sequence, or do you start with
what you want to implement and then work your way back to establish the rational
that would support your decision? Do you think that most business people go
through the seven-step process with important decisions? Why?
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duplicated, or posted to a publicly accessible website, in whole or in part.
TEAM ACTIVITY
Conduct a brainstorming session to find a topic for brainstorming that would be the most useful
to the members of the class. Then brainstorm that topic.
BIZ FLIX VIDEO CASE
VIDEO CASE: FAILURE TO LAUNCH
VIDEO CASE SYNOPSIS
Meet Tripp (Matthew McConaughey), thirty-five years old, nice car, loves sailing, and lives in a
nice house—with his parents. Tripp’s attachment to his family usually annoys any woman with
whom he becomes serious. Mother Sue (Kathy Bates) and father Al (Terry Bradshaw) hire
Paula (Sarah Jessica Parker). She specializes in detaching people like Tripp from their families.
The term “failure to launch” refers to the failure to move out of the family home at an earlier age.
This fast-moving BizFlix video case, however, portrays a subplot in the movie. It begins
with the sound of a bird chirping as it perches on a tree limb. Kit (Zooey Deschanel) and Ace
(Justin Bartha) have waited patiently for the bird’s arrival. This bird has annoyed Kit for many
days. Ace believes that Kit only pumped the shotgun twice, so he shoots the bird with the
intention of scaring it off. They immediately feel guilty when they realize they’ve seriously
injured—possibly killed—the bird.
VIDEO CASE DISCUSSION QUESTIONS AND SUGGESTED ANSWERS
Does “The Bird Problem” present Kit and Ace with a programmed or nonprogrammed decision?
What features of their decision problem led to your choice?
Kit and Ace face an ill-defined situation based on the speed with which it happens and their lack
of experience with such an event. The situation is largely unstructured, although Ace’s
experience with CPR can help structure the problem. They collectively face a nonprogrammed
decision with important consequences—a dead or live bird.
Assess the degree of certainty or uncertainty that Kit and Ace face in this decision problem.
What factors set the degree of certainty or uncertainty?
Both of them face a high degree of uncertainty because of their lack of experience with injured
birds. Kit’s behavior emphasizes her uncertainty by frantically counting off three seconds. Ace is
not sure about using his CPR skills on the bird.
Review the decision-making model described in the chapter, and use specific examples from
the scene to explain how Kit and Ace move through the process.
Each decision-making step appears in the scene. The following lists the steps and gives an
example from the film scene.
 Defining the problem: Kit and Ace easily see that bird has severe injuries and is possibly
dead. Ace now wants to check its vital signs and pulse.
 Identifying limiting factors: Kit and Ace are not veterinarians, thus they have very little
related knowledge; they are also at home with limited emergency care resources.
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


Developing potential alternatives: Kit immediately asks if Ace has relevant skills that
could be applied (CPR).
Analyzing/selecting/implementing the decision: Due to the urgency of the situation, Kit
and Ace very quickly move through implementing their plan to resuscitate the bird.
Establishing a control and evaluation system: Kit and Ace look for feedback from the
bird, which they see when the bird starts breathing and cooing, then bites Ace’s nose.
The bird’s erratic flight in the house and then out the door gives Kit and Ace a clear
evaluation of a positive decision process.
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duplicated, or posted to a publicly accessible website, in whole or in part.