4.1
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 ORGANIZATION’S
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
• CLASSICAL (1880-1927)
• CONTEMPORARY (1930-1962)
• POSTMODERN (1965 - present)
*
4.9
CLASSICAL PERIOD:
• TECHNICAL-RATIONAL VIEW
• TIME & MOTION STUDIES
• SCIENTIFIC MANAGEMENT
Planning, organizing, coordinating,
deciding, controlling
*
4.10
CONTEMPORARY PERIOD:
• SOCIAL PSYCHOLOGISTS
• SOCIOLOGISTS
• ORGANIZATIONAL BEHAVIORISTS
Emphasized individual
collective behavior
*
4.12
POSTMODERN PERIOD:
• ECONOMISTS
• SOCIOLOGISTS
• MANAGEMENT THEORISTS
Emphasizes knowledge basis of
organizations
*
4.12
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
Wrapp’s 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; nonroutine; uncertainty; requires
judgment
4.20
*
INFO SYSTEMS, LEVELS, DECISIONS
ORGANIZATIONAL LEVEL
TYPE OF
DECISION
STRUCTURED
OPERATIONAL
KNOWLEDGE
TPS
OAS
SEMISTRUCTURED
PRODUCTION
COST OVERRUNS
MIS
BUDGET
PREPARATION
PROJECT
SCHEDULING
DSS
KWS
4.21
STRATEGIC
ACCOUNTS
RECEIVABLE
ELECTRONIC
SCHEDULING
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
*
SOURCE: Simon, The New Science of Management Decision (1960)
4.22
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
organization’s 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