Management Chapter 4 Neither Innately Better Than The Other Both Systematic And Intuitive Workers Have

Unlock access to all the studying documents.

View Full Document

Schermerhorn & Bachrach Exploring Management 6th edition Instructor’s Manual

CHAPTER 4

Managers as Decision Makers

There Is No Substitute for a Good Decision

Chapter 4 Overview

Each Chapter contains several inset features designed to assist the student reader in applying the

concepts to relevant examples. Management Live illustrates the importance of realistic job

previews – having the correct information to make the “right” job choices. Choices provides

students with an opportunity to evaluate various sides of an issue in order to make an informed

decision. Hot Topic explores samples of debated topics in business and strategy. Facts to

Consider introduces research or trends that may be used for class discussion in the classroom or

online for distance learning. Insight profiles the importance of self-confidence in decision

making. Quick Case presents a pay related scenario for class analysis and discussion.

The role of a manager and the way decisions are made and problems solved has changed

dramatically with available technology, information, and analytics. As new technologies

continue to enter the workplace, innovations in learning, problem solving, and decision making

are being realized. The chapter begins with a discussion of the importance of information

Chapter 4 Takeaway Questions

• Takeaway 4.1 How do Managers Use Information to Solve Problems?

• Takeaway 4.2 What Are Five Steps in the Decision-Making Process?

• Takeaway 4.3 What Are Current Issues in Managerial Decision Making?

Schermerhorn & Bachrach Exploring Management 6th edition Instructor’s Manual

Chapter 4 Lecture Outline

• Takeaway 4.1: How do Managers Use Information to Solve Problems?

o Managers use technological, information, and analytical competencies to solve

problems.

o Managers deal with problems posing threats and offering opportunities.

o Managers can be problem avoiders, problem solvers, or problem seekers.

• Takeaway 4.2: What Are Five Steps in the Decision-Making Process?

o Step 1 is to identify and define the problem.

o Step 2 is to generate and evaluate alternative courses of action.

• Takeaway 4.3: What Are Some Current Issues in Managerial Decision Making?

o Creativity can be unlocked and encouraged for better decision making.

Chapter 4 Supporting Materials

Figures

• Figure 4.1: In What Ways Do Managers Serve as Information Nerve Centers in

Organizations?

• Figure 4.2: What Are the Differences Between Certain, Risk, and Uncertain Decision-

Making Environments?

• Figure 4.3: What Are Five Steps in the Decision-Making Process?

• Figure 4.4 How Does the Classical Model of Managerial Decision Making Differ from

the Behavioral Model?

What’s Inside

• Management Live: Making the “Right” Job Choices

• Choices: Want to win? Know your analytics

• Ethics Check: Left to Die on Mt. Everest

• Facts to Consider: The “Ask Gap” – What it Takes for Women to get Raises

• Hot Topic: Bye-bye telecommuting?

Schermerhorn & Bachrach Exploring Management 6th edition Instructor’s Manual

• Insight: Self-confidence builds better decisions

• Quick Case: Time for a Pay Boost

Applications

• TestPrep 4 Multiple-Choice Questions

• Skill Building Portfolio

Chapter Outline

Takeaway Question 4.1

How Do Managers Use Information to Solve Problems?

• Managers use technological, informational, and analytical competencies to solve

problems

• Information competency – the ability to locate, retrieve, evaluate, organize, and analyze

information to make decisions that solve problems

Figure 4.1: In What Ways Do Managers Serve as Information Nerve Centers in

Organizations? Managers sit at the center of complex networks of information flows;

• Managers deal with problems posing threats and offering opportunities

✓ Performance threat – an actual or potential performance deficiency or the most

obvious problem-solving situation for managers

Schermerhorn & Bachrach Exploring Management 6th edition Instructor’s Manual

• Managers can be problem avoiders, problem solvers, or problem seekers

✓ Problem avoiders – managers who ignore information that would signal the presence

of a performance threat or opportunity

DISCUSSION TOPIC

Ask students to explore 3-5 decisions they have made since morning. How would they classify

them? Most of them should be routine programmed decisions such as what to eat for breakfast,

• Managers make programmed and non-programmed decisions when solving problems

✓ Decision – a choice among possible alternative course of action

DISCUSSION TOPIC

Ask students to explore whether Capt. Sullenberger’s emergency landing in the Hudson River

provides an example of a programmed or non-programmed decision and why?

• Managers can use both systematic and intuitive thinking

✓ Systematic thinking – a person who approaches problems in a rational, step-by-step,

• Managers use different cognitive styles to process information for decision making

✓ Sensation Thinkers – impersonal and realistic in problem solving, prefer facts,

certainty and control

Schermerhorn & Bachrach Exploring Management 6th edition Instructor’s Manual

DISCUSSION TOPIC

Ask students to identify examples of manager or professor with whom they have worked into

one of the categories: sensation thinker, intuitive thinker, intuitive feelers, and sensation feelers.

Students may discuss their reasoning in small or large groups.

• Managers make decisions under conditions of certainty, risk, and uncertainty

✓ Certain environment – an ideal situation where factual information exists for the

possible alternative courses of action and their consequences (a student loan cost is an

DISCUSSION TOPIC

Ask students to identify examples of making decisions in each of the three environments.

✓ See Figure 4.2 What Are the Differences Between Certain, Risk, and Uncertain

Decision Making Environments? Managers rarely face a problem where they can

4.1 Questions for discussion suggested answers

1) Can a manager be justified for acting as a problem avoider in certain situations?

2) Would an organization be better off with mostly systematic or mostly intuitive thinkers?

Neither is innately “better” than the other; both systematic and intuitive workers have

3) Is it possible to develop programmed decisions for use in conditions of risk and

uncertainty?

4.1 Career Situation: What Would You Do?

Even though some problems in organizations seem to “pop up” unexpectedly, many of them can

be anticipated. Examples are an employee who calls in sick at the last minute, a customer who is

unhappy with a product or service and wants a refund, and even a boss who ask you to do

something that isn’t job relevant. How might you anticipate handling such situations as a

decision maker?

Takeaway Question 4.2

What Are The Steps in the Decision-Making Process?

• Figure 4.3 What Are Five Steps in the Decision-Making Process? Decision making can be

viewed as a series of steps—(1) find and define the problem, (2) generate and evaluate

• Step 1 is to identify and define the problem

✓ Stage of information gathering, processing and deliberation

✓ Stage where goals are clarified to specify exactly what a decision should accomplish

• Step 2 is to generate and evaluate alternative courses of action

✓ Criteria for evaluating alternatives

➢ Cost benefit analysis – compares what an alternative will cost with its expected

Schermerhorn & Bachrach Exploring Management 6th edition Instructor’s Manual

• Step 3 is to decide on a preferred course of action

✓ Classical decision model – views the manager as acting rationally and in a fully

informed manner; he or she makes an optimizing decision (that gives the absolute

• Figure 4.4 How Does the Classical Model of Managerial Decision Making Differ from the

Behavioral Model? The classical model views decision makers as having complete

information and making optimum decisions that are the absolute best choices to resolve

• Step 4 is to implement the decision

✓ Lack of participation error–when managers don’t include in the decision-making

process those persons whose support is necessary for implementation

• Step 5 is to evaluate results

• This is a form of control

• Ethical reasoning is important at all steps in decision making

• Conduct an “ethics double check”

• Ethical criteria

➢ utility – does the decision satisfy all stakeholders?

• Spotlight questions

➢ How would I feel if my family found out about this decision?

➢ How would I feel if this decision was published in the local newspaper or

posted on the Internet?

4.2 Questions for discussion suggested answers

1) Do the steps in the decision-making process have to be followed in order?

Yes, the steps are intended to be sequential, but if evaluation of results (step 5) is

unsatisfactory, the process begins again with re-defining the problem (step 1).

Schermerhorn & Bachrach Exploring Management 6th edition Instructor’s Manual

• Little-C creativity – when average people come up with unique ways to deal with

daily events and situations.

• Personal Creativity Drivers build creativity in the workplace

DISCUSSION TOPIC

Students may do extended research by taking one of many online quizzes that assess

tendencies to right or left brain thinking. Author Daniel Pink explores the impact of

• Group decision-making has both advantages and disadvantages

✓ Advantages

➢ more information

➢ more alternatives

• Judgmental heuristics and other biases may cause decision-making errors

✓ Availability heuristic – using easily available information to assess the situation

without further research, although it may be incomplete, irrelevant or wrong

✓ Representativeness heuristic – assessing a situation based on a stereotype without

regard for unique circumstances

Schermerhorn & Bachrach Exploring Management 6th edition Instructor’s Manual

• Carefully determine just why you are continuing a course of action; if there

are insufficient reasons to continue, don’t.

• Remind yourself of the costs of a course of action; consider saving these

costs as a reason to discontinue.

• Managers must be prepared for crisis decision-making

✓ Crisis – an unexpected problem that can lead to disaster if not handled quickly and

appropriately

✓ Manager mistakes – a common error in a crisis is for managers to become isolated

and limit the sources of information when in fact they should do exactly the opposite.

4.3 Questions for discussion answers

1) How can you avoid being hurt by the anchoring and adjustment heuristic in your annual

pay raises?

If the company for which you work uses an “anchor and adjustment” system, there are a

couple ways to mitigate the possible negative consequences:

2) What are some real-world examples of how escalating commitment is affecting decision –

making in business, government, or people’s personal affairs?

Here are several real-world examples of escalating commitment:

• You win several hundred dollars gambling in Las Vegas, a total of $800 “net.” Then

you begin to lose and eventually are down by $200 below the initial sum you brought

Schermerhorn & Bachrach Exploring Management 6th edition Instructor’s Manual

• You invest $1000 in the stock market by buying one company’s shares. After the stock

price increases in value several months in a row, it drops substantially and the news

is bad (liability issues, ethics, losses etc.) You decide to “sell” but want to wait until

you get back to what you initially invested, $1000 rather than “cut your losses.”

3) Is it really possible to turn a crisis into an opportunity, and, if so, how?

A crisis can be turned into an opportunity in a number of ways.

• The way a manager handles a crisis can be an opportunity to demonstrate the

integrity of the company. For example, Johnson & Johnson handled a crisis

4.3 Career Situation: What Would You Do?

You have finally caught the attention of senior management. Top executives asked you to chair a

task force to develop a creative new product that can breathe new life into an existing product

line. First, you need to select the members of the task force. What criteria will you use to choose

members who are most likely to bring high levels of creativity to this team?

Schermerhorn & Bachrach Exploring Management 6th edition Instructor’s Manual

Teaching Notes:

In this section, ideas, exercises, and assignments are provided to assist you in integrating the

concepts in Exploring Management for your students, especially the special features of the text.

Management Live: Making the “Right” Job Choices

Whether talking about your first job or a later step in career progression, this is one of the most

important decisions you’ll ever make. Too bad, it’s often wrong. A survey by Development

Dimensions found only 51% of new hires confirming they made the right decisions. Many said

Recruiters should provide full information to job candidates, including the potential downsides

of a job and employer. But, many still go for the traditional “tell and sell” approach. How can

you get realistic job previews and then use this information well to make your job choice

decisions?

Choices: Want to Win? Know your Analytics

A survey on “The New Intelligent Enterprise” conducted by the Sloan Management Review

asked 3,000 executives from around the world to report on how their organizations use and deal

with data for business intelligence. Results included the following:

o 60% of executives said their organizations were “over–whelmed” by data.

o Organizations outperforming competitors were three times better at managing and

acting on data.

What are the implications for your career planning and development? The consulting firm

McKinsey & Co. projects major shortages in the numbers of managers who have the skills to

Schermerhorn & Bachrach Exploring Management 6th edition Instructor’s Manual

“use data to shape business decisions.” Are you prepared to compete for jobs and promotions in

career situations where analytics count? How could your local schools, small businesses, and

even government agencies gain by better harnessing the power of information and analytics?

Student answers will vary. However, as Jonathan Shaw pointed out in Harvard Magazine, it’s

Ethics Check: Left to Die on Mt. Everest

This true story of life and death on Mt. Everest poses some interesting ethical questions. The

questions in the “You Decide” section probe student thoughts about their views of ethics that

may not be of life-or-death proportions, but still define their character.

In our personal affairs, daily lives, and careers, we are all, in our own ways, climbing Mt.

Everest. What are the ethics of our climbs? How often do we notice others in trouble, struggling

along the way? And, like the mountain climbers heading to the summit of Everest, how often do

we pass them by to continue our own journeys? Can you identify examples—from business,

school, career, sports, and so on—that pose similar ethical dilemmas?

Facts to Consider: The “Ask Gap” – What it Takes for Women to get Raises

Facts show that women ask for raises less frequently than men.

Why don’t more women ask for raises and promotions? What are the implications for women