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Management Team Decision
TO PAY OR NOT TO PAY?
Purpose
Whether it’s something as complicated as cars or something as simple as toy blocks, the success of a
product depends in large part on perceptions of its quality. If consumers feel that the company that makes
a product is committed to delivering high-quality, valuable goods, then they are more likely to buy that
Setting It Up
Read the case as a class and then divide students into groups of three or four. In their groups, students
should consider the facts of the case and work together to answer the questions. When finished, have the
groups share their decisions (and the process they went through to reach them) with the rest of the class.
Questions
1. What is your recommendation for how Toyota should approach this situation?
Students’ responses will either be that Toyota pay the fine and admit culpability, or contest the fine.
2. What are the decision criteria that should be used in this situation, and how should they be weighted?
Decision criteria are the standards used to guide judgments and decisions. Typically, the more criteria
a potential solution meets, the better that solution will be. There are a number of criteria to consider in
3. Under what conditions do you think it is acceptable for Toyota to settle for a “good enough”
decision?
Recall from the text that rational decision making leads to perfect or near-perfect decisions. But these
kinds of decisions typically come about in perfect worlds with no real-world constraints. As described
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Practice Being a Manager
PLANNING AND DECISION MAKING
Exercise Overview and Objective
This exercise engages students in both individual and group levels of planning and decision-making. At
the individual level, students must develop a plan that will result in their being hired to work for their
“single best company possible.” Individual students must define “best” (e.g., innovative company), and
Preparation
Students should complete Step 1 prior to conducting the exercise. You should assign the exercise at least
one session prior in order to allow time for preparation of the individual plan. You may want to reinforce
In-Class Use
Students should be assigned to small discussion groups of three (3) or four (4) members. You may use
random assignment here, or convenient groupings such as existing project groups. Instruct these groups to
follow Step 2, allowing each member a few minutes to present their definition of “best company” and
Keep in mind that the purpose of the brochure exercise is to generate a sample of group decision
making and planning (vs. creating a great brochure). So you may set any time limit that works best within
your session, with something like 10 minutes a reasonable minimum.
When you call time on the group brochure work, you should shift directly to class discussion. The
first three discussion questions in Step 4 are focused on the individual level. You may skip one of these
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The main thrust of the debriefing is the patterns of decision-making and planning as well as the
comparisons between individual and group decision-making.
Develop Your Career Potential
WHAT DO YOU WANT TO BE WHEN YOU GROW UP?
This exercise is designed to get students to take a proactive approach to their careers by putting a career
plan in writing. This assignment is an excellent developmental opportunity no matter what career students
enter. Studies show that very few students, much less professionals, ever take the time to create a career
plan. Furthermore, this assignment provides you the opportunity to talk to students about your career
.
Reel to Real – Biz Flix
Because they are so short, the Biz Flix videos are best used to supplement your lesson plans. They are
designed to illustrate the content rather than convey all of the chapter concepts.
Video: Inside Man
Segment Summary:
The 2006 crime thriller Inside Man features Denzel Washington as a tough NYPD hostage negotiator. He
finds himself in a high-stakes cat-and-mouse game with a clever bank robber (Clive Owen), who confuses
Discussion Questions from Text:
1. Does this scene show strategic or tactical planning?
Whereas strategic plans are used to focus company efforts over the next 2-5 years, tactical plans and
2. What pieces of the planning type does it specifically show? Give examples from the scene.
The evidence of tactical planning in this scene can be found in the dialogue between Detective Frazier
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3. Do you expect this plan to succeed? Why or why not?
Student answers’ on whether this plan will succeed will vary, but should include supporting material
Additional Discussion Questions:
1. Lower-level managers are responsible for developing and carrying out three types of plans.
Which of these are most likely in development by the police force working to resolve the hostage
situation?
The three types of plans utilized by lower-level managers include operational plans, single-use plans,
and standing plans. Operational plans are day-to-day plans that are used for producing and delivering
2. Which group technique would work best to resolve the hostage situation?
The group techniques described in this chapter include devil’s advocacy, dialectical inquiry, the
nominal group technique, the Delphi technique, the stepladder technique, and brainstorming. Devil’s
Reel to Real – Management Workplace
Management Workplace videos can support several in-class uses. In most cases you can build an entire
50-minute class around them. Alternatively, they can provide a springboard into a group lesson plan.
Video: Plant Fantasies
Managerial Decision Making
Summary:
Teresa Carleo, owner of Plant Fantasies, is the gardener for such well-known New York City properties
as the Trump Organization, John Jay College, and Jack Resnick & Sons. In landscaping, success often
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her employees to share her high standards for quality.
Discussion Questions from Text:
1. Did Plant Fantasies owner Teresa Carleo follow the rational decision-making process to launch
Plant Fantasies? Explain.
According to Carleo, the decision to quit her old job and start Plant Fantasies was characterized
by whim and emotion. Her process was not consistent with the rational decision making model.
She was emotionally upset at her former employer, and she had little experience with horticulture
2. List an example of a programmed decision at Plant Fantasies. Identify a nonprogrammed decision
at Plant Fantasies.
A programmed decision is a decision made in any situation that has occurred often enough to
enable decision rules to be developed and applied in the future. Programmed decisions tend to
involve simple routine matters for which a manager has a familiar set of options. One
Workplace Video Quiz
Video Segment 1
Video segment title
Decision Making
Start time (in sec)
0:00
Stop time (in sec)
2:10
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Option a
Rational decision making
Option b
Intuitive
Option c
The Delphi technique
Option d
The nominal group technique
Correct option
b: Intuitive
Feedback for option a
Incorrect. Rational decision making, and group decision making
techniques, are characterized a systematic process.
Quiz Question 2
Teresa Carleo made the decision to start her business from her apartment
because alternative location options were:
Option a
Not considered
Option b
Not satisfactory
Option c
Not available
Option d
Not affordable
Correct option
d: Not affordable
Feedback for option a
Incorrect. The choice of office location was made because of the cost of
real estate in New York.
Feedback for option b
Incorrect. The choice of office location was made because of the cost of
real estate in New York.
Feedback for option c
Incorrect. The choice of office location was made because of the cost of
real estate in New York.
Quiz Question 3
For a landscaping business like Plant Fantasies, the policies it uses to
regulate how its contractors bill clients is an example of:”
Option a
Proximal goal
Option b
Distal goal
Option c
Operational plans
Option d
Escalation of commitment
Correct option
c: operational plans
Feedback for option a
Incorrect. Operational plans are the day-to-day plans for producing goods
Feedback for option b
Incorrect. Operational plans are the day-to-day plans for producing goods
or providing services.
Feedback for option c
Correct. Operational plans are the day-to-day plans for producing goods or
providing services.
Feedback for option d
Incorrect. Operational plans are the day-to-day plans for producing goods
or providing services.
Video Segment 2
Video segment title
Decision Making
Feedback for option b
Correct. Rational decision making, and group decision making techniques,
are characterized a systematic process.
Feedback for option c
Incorrect. Rational decision making, and group decision making
Feedback for option d
Incorrect. Rational decision making, and group decision making
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Start time (in sec)
2:10
Stop time (in sec)
4:37
Quiz Question 1
While planning a landscaping project for John Jay College, Plant
Fantasies’ collaboration with an outside landscape architect presented
challenges related to:
Option a
Group decision making
Option b
Risk
Feedback for option d
Incorrect. Group decision making involves suing groups or teams to work
through the rational decision making process.
Quiz Question 2
Clients of Plant Fantasies should expect Teresa Carleo to have excellent
intuition for making landscaping decisions because:
Option a
All landscaping decisions are routine
Option b
She is a resident of New York City
Option c
She has more than two decades of hands-on experience making decisions
for her company and clients
Option d
She follows the steps of the rational decision making model
Correct option
c: She has more than two decades of hands-on experience making
decisions for her company and clients
Feedback for option a
Feedback for option b
Feedback for option c
decisions.
Feedback for option d
decisions.
Quiz Question 3
When Teresa Carleo had to decide what color tulips to plant for long-time
client The Corinthian, she faced a:
Option a
Nonprogrammed decision
Option b
Decision criteria
Option c
Problem
Option d
Evlaluations
Correct option
c: problem
Feedback for option a
Incorrect. A problem exists when there is a gap between a desired state and
an existing state, which presents multiple alternatives to a company.
Feedback for option c
Correct. A problem exists when there is a gap between a desired state and
an existing state, which presents multiple alternatives to a company.
Feedback for option d
Incorrect. A problem exists when there is a gap between a desired state and
Option c
Creativity
Option d
None of these
Correct option
a: Group decision making
Feedback for option a
Correct. Group decision making involves suing groups or teams to work
through the rational decision making process.
Feedback for option b
Incorrect. Group decision making involves suing groups or teams to work
Feedback for option c
Incorrect. Group decision making involves suing groups or teams to work
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an existing state, which presents multiple alternatives to a company.
Video Segment 3
Video segment title
Decision Making
Start time (in sec)
4:37
Stop time (in sec)
6:28
Quiz Question 1
Teresa Carleo’s discussion of her team’s collective creativity and expertise
reinforces the benefit of:
Option a
Bounded rationality
Option b
Groupthink
Option c
Group decision making
Option d
Computerized decision support system
Quiz Question 2
Teresa Carleo’s day–to–day management of her company’s mail, phone
calls, sales, floral designs, field work, and other minutiae creates
constraints on time and attention that leads to:
Option a
Satisficing
Option b
Rational decisions
Option c
Brainstorming
Option d
Risk
Correct option
a: Satisficing
Correct. Satisficing is the action of choosing a “good enough” alternative
Feedback for option d
Incorrect. Satisficing is the action of choosing a “good enough” alternative
because of limited time and resources.
Quiz Question 3
Which of the following is not a technique that teams at Plant Fantasies
could use to aid effectiveness of group decisions?
Option a
Delphi technique
Option b
State of certainty
Option c
Brainstorming
Option d
Nominal group technique
Correct option
b: State of certainty
Feedback for option a
Incorrect. Examples of group decision making techniques include Delphi
Correct option
c: Group decision making
through the rational decision making process.
technique, brainstorming, and nominal group technique.
Feedback for option b
Correct. Examples of group decision making techniques include Delphi
technique, brainstorming, and nominal group technique.
Feedback for option c
Incorrect. Examples of group decision making techniques include Delphi
technique, brainstorming, and nominal group technique.
Review Questions
1. What are the benefits and costs of planning?
The major benefits are:
• Intensified effort. Managers and employees put forth greater effort when following a plan.
The major costs are:
• Impedes change or creates hurdles to needed change. Employees can become so committed
2. Describe the steps involved in making a plan that works.
There are five steps to making a plan that works: (1) Set S.M.A.R.T. goals—goals that are Specific,
Measurable, Attainable, Realistic, and Timely. (2) Develop commitment to the goals from the people
3. What are S.M.A.R.T. goals?
4. What are proximal and distal goals? Which type of goals is more effective?
Proximal goals are short-term goals or subgoals, whereas distal goals are long-term or primary goals.
5. How can companies build flexibility into their plans?
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Companies can use one of two methods to build flexibility into their plans:
• Options-based planning involves making small, simultaneous investments in many alternative
adaptable.
6. How do companies use plans at all levels of management?
Managers at all levels of the company engage in planning of some kind, but the plans at each level are
markedly different in form and function. Top management develops strategic plans, which are overall
7. Describe the steps in rational decision-making.
Rational decision-making is a six-step process in which managers define problems, evaluate
alternatives, and compute optimal solutions. The steps are as follows:
• Define the problem. Managers should understand the exact problem that they are trying to
solve, and the problem should be clear.
8. What are decision criteria and how are they used in decision-making?
Decision criteria are the standards used to guide judgments and decisions. Typically, the more criteria
9. What are the advantages and disadvantages of group decision-making?
Advantages include:
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Disadvantages include:
10. Identify the methods of group decision-making and give a brief description of each.
Structured conflict: Two structured conflict techniques are described: devil’s advocacy and
dialectical inquiry. The former involves assigning a group member the role of critic to push other
members to solidify their thinking about the decision. The latter involves generating a solution
(thesis) and then arguing in favor of an opposite solution (antithesis), which pushes group members to
see the weaknesses in their proposed solution.
• Nominal group technique: Group members independently write down as many problem
definitions and alternative solutions as possible. This would be effective when a-type conflict
Additional Assignments and Activities
Out-of-Class Project: “Planning Case Study.” Divide the class into small groups. Each group should
thoroughly research how a particular company responded to the 2005 hurricane disasters in the United
Out-of-Class Project: “Decision Case Study.” Student groups should research a company that is
currently facing a big dilemma. Groups should thoroughly outline the problem, research all the
Out-of-Class Project: “Selling to Wal–Mart.” Assign groups of 4 – 5 students to work through the
scroll down to “Center Implementation Plans” and select three of these. Skim through it. How does
NASA’s strategic plan relate to the organization’s vision and mission? How is each center’s specific
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implementation plan connected to NASA? List specific items in each implementation plan which are
consistent with NASA’s strategic plan.
You’ll find a list of “do’s” and “don’ts” of decision making according to the Small Business Knowledge
Base. Which of these have you experienced? Give some specific examples.
“Graduate School.” Assume that you are planning to go to graduate business school to get your Master
of Business Administration (MBA). Visit the Web site of the U.S. News and World Report at