978-0134728391 Chapter 9 Part 2

Learning Objective 9-8:

Relate leadership to decision making and discuss both rational and behavioral perspectives

on decision making.

Leadership, Management, and Decision Making

Decision making—choosing one alternative from among several options—is a critical manage-

ment skill.

A. The Nature of Decision Making

Decision making is the act of choosing one alternative from among a set of alternatives.

1. Types of Decisions. Managers must make many different types of decisions. In general,

however, most decisions fall into one of two categories: programmed and

2. Decision-Making Conditions. Just as there are different kinds of decisions, there are also

different conditions in which decisions must be made. State of Certainty is when the

decision maker knows with reasonable certainty what the alternatives are and what

associated with each, or the likely consequences of each alternative.

B. Rational Decision Making

There are a number of steps in the rational decision-making process.

1. Recognizing and Defining the Decision Situation. Step one is to recognize that a

2. Identifying Alternatives. Alternative courses of effective action must be developed; the

more important the decision, the more attention is directed to developing alternatives.

Developing obvious, standard alternatives and creative, innovative alternatives is useful.

3. Evaluating Alternatives. Managers must weigh the pros and cons and the feasibility of

all alternatives to the problem. Managers must thoroughly evaluate all the alternatives to

increase the chances that the alternative chosen will be successful.

4. Selecting the Best Alternative. While many situations do not lend themselves to

5. Implementing the Chosen Alternative. Implementation is sometimes fairly easy, but

6. Following Up and Evaluating the Results. Managers should make sure that the chosen

alternative has served its original purpose. Several responses are available, if it is not

working as expected and range from redefining the problem to implementing previously

disregarded alternatives.

C. Behavioral Aspects of Decision Making

While approaching decision situations logically is ideal, frequently decisions made with little

regard for logic can turn out to be correct. Several ingredients in how these forces work are

behavioral aspects of decision making.

1. Political Forces in Decision Making. Political forces contribute to the behavioral nature

2. Intuition. Intuition is an innate belief about something, often without conscious

3. Escalation of Commitment. Escalation of commitment occurs when managers become

4. Risk Propensity and Decision Making. Risk propensity is the extent to which a decision

maker is willing to gamble when making a decision. Conservative managers are cautious

and less likely to avoid mistakes or big losses. More aggressive managers may achieve

big successes, but are also more likely to incur greater losses.

KEY TEACHING TIPS

 Remind students that they often engage in rational decision making, which occurs when a

manager makes a decision by selecting and implementing a ―best‖ alternative.

 A coalition is an informal alliance of individuals or groups formed to achieve a common

goal; point out that this goal is often a preferred decision alternative.

to which a person is willing to gamble when making a decision.

QUICK QUESTIONS

 What are some typical constraints that can limit the identification of alternatives?

 If an alternative appears not to be working, what are the manager’s options?

 For what types of decisions would the rational decision-making model apply? Why?

Learning Catalytics is a “bring your own device” student engagement, assessment,

and classroom intelligence system. It allows instructors to engage students in class

with realtime diagnostics. Students can use any modern, web-enabled device

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Learning Catalytics in your course, contact your Pearson Representative.

IN-CLASS ACTIVITIES

In-Class Activity 1: Ice-Breaker: Are You a Leader or a Manager?

Activity Overview:

This activity provides students with a chance to interview a classmate, then discuss their own

leadership potential with that classmate.

Time Limit: 20 minutes

What to Do:

1. After reviewing the differences between ―managers‖ and ―leaders,‖ ask students to think

2. Reassemble the class and ask for volunteers who are willing to share any information about

their own personal assessments and/or introduce their interviewee to discuss some of the

topics discussed in the interview. (10 minutes)

Don’t Forget:

In-Class Activity 2: Small-Group Discussion: Transformational vs.

Transactional

Activity Overview:

This activity asks students to assess the leadership characteristics of selected leaders, identifying

transformational and transactional characteristics among them.

Time Limit: 20 minutes

What to Do:

1. Divide the class into small groups and ask each group to come up with a business or political

2. Reassemble the class as a whole to discuss each group’s input. (10 minutes)

Don’t Forget:

In-Class Activity 3: Up for Debate: Is John Paul DeJoria a Charismatic

Leader?

Activity Overview:

This activity asks students to assess the leadership characteristics of one of the most successful

entrepreneurs in the world.

Time Limit: 30 minutes

What to Do:

1. Ask students to read about John Paul DeJoria in the Entrepreneurship and New Ventures

2. Ask the class as a whole to discuss those traits and behaviors that might indicate that John

Paul DeJoria had a high or low level of charisma. (20 minutes)

ANSWERS FOR END OF CHAPTER ACTIVITIES

QUESTIONS FOR REVIEW

9-1. What are the basic differences between management and leadership?

9-2. Summarize the basic premises underlying the trait approach to leadership.

The trait approach to leadership focuses on identifying specific leadership traits that may

9-3. What are leadership substitutes and neutralizers?

Leadership substitutes are individual, task, and organizational characteristics that tend to

9-4. List and briefly explain the steps in rational decision making.

The rational decision-making model begins with (1) recognizing and defining the decision

situation. Recognize that a decision is necessary and define the problem. Decision makers

QUESTIONS FOR ANALYSIS

9-5. Describe the five types of power. Which type or types does your current supervisor

exercise?

9-6. When is task-focused leader behavior most important? When is it more important for a

leader to exhibit employee-focused behavior?

9-7. The impact of virtual leadership is likely to grow in the future. As a potential ―follower‖ in a

virtual leadership situation, what issues would be of most concern to you? What would the

issues be from the perspective of the ―leader‖ role in such a situation?

9-8. Identify a leader who you believe exhibits charismatic leadership and explain the

behaviors that support this conclusion.

APPLICATION EXERCISES

9-9. Overwhelmingly, the CEOs of the largest companies in the United States are white males,

but women and minorities are making inroads. Identify a leader who is a member of a

9-10. In 2012, Marissa Mayer was appointed president and CEO of Yahoo!. In her tenure with

Yahoo!, she has made a number of bold decisions, not all of which were popular. Research

Mayer’s career, especially at Yahoo!. What type of leader is Mayer? How would you

describe her leadership style? Do you think she is effective?

There will be a range of answers with some students describing her leadership style in terms

BUILDING A BUSINESS: CONTINUING TEAM EXERCISE 9-11 TO 9-15

(Learning Objectives 2, 3, 4, 5 – AACSB – interpersonal relations and teamwork, analytical

and reflective thinking, application of knowledge)

Answers will be determined by the type of business (brick and mortar, e-commerce, etc.), the

team’s perspective on the role the leader needs to play, each team member’s preferred leadership

style, the number and type of employees, the skills and experience levels of the employees, etc.

When answering these questions, the students should be reminded of the type of traits/skills and

TEAM EXERCISE: MANAGING CHANGES IN STRATEGIC DIRECTION 9–16 TO 9-

19 (Learning Objectives 3, 4, 5, and 8 – AACSB – ethical understanding and reasoning,

interpersonal relations and teamwork, reflective thinking)

This exercise should encourage thoughtful discussion on the nature of leadership, responsibilities

of a leader, the decision-making process, and the impact a leader’s personality has on an

organization.

EXERCISING YOUR ETHICS: EXERCISING CHARISMA

(Learning Objective 8 – AACSB – ethical understanding and reasoning, reflective

thinking)

9-20. What are the ethical issues in this situation?

9-21. What do you think most managers would do in this situation?

9-22. What would you do?

making such decisions.

CASES:

AUTHENTIC LEADERSHIP

(Learning Objectives 1, 2, 3 and 4 – AACSB – analytical and reflective thinking,

application of knowledge)

9-23. What personal traits does Brad Smith possess that aid him as a leader?

9-24. How would you describe Brad Smith’s leadership style?

9-25. Do you believe that Smith’s gender played a part in his success? Why or why not?

His gender is an unchangeable part of him. Students should consider how gender affects their

own perceptions of leadership and leadership characteristics in explaining their answers.

9-26. What are three important lessons from Smith’s career path?

Answers will vary depending on the students’ perspectives and experiences. Lessons to take

THE MAN BEHIND THE GENIUS

(Learning Objectives 2, 4, 8 – AACSB – analytical thinking, application of knowledge)

9-27. Do you think Steve Jobs was a charismatic leader? What leads you to this conclusion?

9-28. Jobs enjoyed almost cult-like loyalty among his employees. Why do you think people

clamored to work for Apple under Jobs’s leadership?

9-29. What challenges face employees working for a leader such as Jobs?

9-30. Describe Jobs with respect to intuition, escalation of commitment, and risk propensity.

9-31. Do you think that you would have enjoyed working for Apple during Jobs’s leadership?

Why or why not?

9-32. How does a leader differ from a manager? Describe the situational approach to leadership

and three major theories within this category. How would the path–goal theory help you

identify the most appropriate leadership style in a situation?

Managers focus primarily on planning, organization, leading, and controlling, while leaders

concentrate on agenda setting, aligning, inspiring, and monitoring. While there can be

overlap, each is a discrete set of activities.

The situational approach to leadership assumes that appropriate leader behavior varies from

one situation to another. It attempts to identify forms of leader behavior that result in

Path-goal theory identifies four kinds of behaviors that leaders can use, depending on the

situation. Directive leader behavior lets subordinates know what is expected of them, gives

guidance and direction, and schedules work. Supportive leader behavior is being friendly and