Management Chapter 6 Homework This Turn Minimizes Risks And Improves Decision

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Exhibit 6.5: Personal Decision Framework

A. Personal decision style refers to differences between people with respect to how they

perceive problems and make decisions. Research has identified four major decision

styles.

2. With an analytical style, managers like to consider complex solutions based on as

much data as they can gather.

4. The behavioral style is characterized by having a deep concern for others as

individuals.

B. Most managers have a dominant decision style. The most effective managers are able to

shift among styles as needed to meet the situation.

V. WHY DO MANAGERS MAKE BAD DECISIONS?

INSTRUCTOR’S NOTES___________________________________________________________

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Even the best manager will make mistakes, but managers can increase their percentage of good

decisions by understanding some of the factors that cause people to make bad ones. Most bad

decisions are errors in judgment that originate in the human mind’s limited capacity and in the

natural biases managers display during decision making. Awareness of the following six biases

can help managers make more enlightened choices:

Being influenced by initial impressions. The mind often gives disproportionate weight to the

first information it receives when considering decisions. These initial impressions act as an

anchor to subsequent thoughts and judgments, leading to misguided decisions.

Justifying past decisions. People don’t like to make mistakes, so they continue to support a

flawed decision in an effort to justify or correct the past.

Spotlight on Skills: Evidence-Based Management

Evidence-based decision making simply means a commitment to make more informed and

intelligent decisions based on the best available facts and evidence. It means being aware of our

biases and seeking and examining evidence with rigor. Managers practice evidence-based

decision making by being careful and thoughtful rather than carelessly relying on assumptions,

past experience, rules of thumb, or intuition.

Business Blooper: J. Crew

When J. Crew CEO Millard Drexler let the board know he was putting the company up for sale,

he neglected his obligation to conduct an auction of sorts, to get the highest bidder for

shareholders. Instead, he made a secret $3 billion deal with TPG and Leonard Green & Partners.

Shareholders were not impressed and took Drexler to court.

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VI. INNOVATIVE GROUP DECISION MAKING

INSTRUCTOR’S NOTES___________________________________________________________

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A. Start with Brainstorming

1. One of the best known techniques for rapidly generating creative alternatives is

brainstorming. Brainstorming uses a face-to-face group to spontaneously suggest a

2. Electronic brainstorming, also called brainwriting, brings people together in an

B. Engage in Rigorous Debate

1. An important key to better decision making under conditions of uncertainty is to

2. There are several ways to stimulate rigorous debate.

a. One way is by ensuring diversity in terms of age and gender, functional area of

expertise, hierarchical level, and experience with the business.

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and exchange proposals and discuss the various options until they arrive at a

common set of understandings.

Discussion Question #7: As a new, entry-level manager, how important is it to find ways to

compensate for your relative lack of experience when trying to determine which alternative

before you is most likely to succeed? What are some ways you can meet this challenge?

C. Avoid Groupthink

1. Avoiding groupthink helps groups make better decisions. Groupthink refers to the

tendency of people in groups to suppress contrary opinions. When people slip into

D. Know When to Bail

1. Even though the new workplace encourages risk taking and learning from mistakes,

it also teaches a person to know when to pull the plug on something that isn’t

E. Act with Speed

1. Today’s accelerated pace of business means that some decisions have to be made

F. Don’t Ignore a Crisis

1. Speed is particularly crucial when an organization faces a crisis. Managers are under

Answers to Discussion Questions

1. You are a busy partner in a legal firm and an experienced administrative assistant complains

of headaches, drowsiness, dry throat, and occasional spells of fatigue and flu. She tells you

she believes air quality in the building is bad and would like something to be done. How

would you respond?

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Students should apply the decision-making steps to solve this problem. The first step is

recognition of decision requirement. The manager must determine if there truly is a problem

2. Why do you think decision making is considered a fundamental part of management

effectiveness?

Decision making is especially important to effectiveness because it underlies all manager

activity. Managers are faced with limited resources, competing demands, and a continuous

3. Explain the difference between risk and ambiguity. How might decision making differ for a

risky versus an “ambiguous” situation?

Risk means that the decision maker has most of the necessary information. The objectives of the

decision are clear-cut, and alternatives can be identified. However, the future outcome of each

alternative is not known for certain, although the probability of outcomes can be calculated,

4. Analyze three decisions you made over the past six months. Which of these were

programmed and which were nonprogrammed? Which model—the classical, administrative,

or political—best describes the approach you took to make each decision?

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A programmed decision would refer to a situation that has occurred often enough so that a

student can use past experience and similar decision rules over and over again. Programmed

5. What opportunities and potential problems are posed by the formation of more than one

coalition within an organization, each one advocating a different direction or alternative?

What steps can you take as a manager to make sure that dueling coalitions result in

constructive discussion rather than dissension?

When more than one coalition forms within an organization, with each advocating a different

direction or alternative, there are significant opportunities for constructive dialogue and

6. Can you think of a bad decision from your own school or work experience or from the recent

business or political news that was made in an effort to correct or justify a past decision? As

a new manager, how might you resist the urge to choose a decision alternative based on the

idea that it might correct or validate a previous decision?

Students’ descriptions of past bad decisions will obviously vary. As new managers, it will be

7. As a new, entry-level manager, how important is it to find ways to compensate for your

relative lack of experience when trying to determine which alternative before you is most

likely to succeed? What are some ways you can meet this challenge?

Finding ways to compensate for inexperience in decision making is critical to identifying the

alternative most likely to succeed. A new, entry-level manager who fails to do so will soon be

8. List some possible advantages and disadvantages to using computer technology for

managerial decision making.

9. Do you think intuition is a valid approach to making decisions in an organization? Why or

why not? How might intuition be combined with a rational decision approach?

Intuition or a “gut” feeling, especially where it is forthcoming from experience, can be useful in

management decision making. When time is of the essence, intuition can be a valid predictor of

10. What do you think is your dominant decision style? Is your style compatible with group

techniques such as brainstorming and engaging in rigorous debate? Discuss.

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Students’ responses will, of course, be very different. They should, however, demonstrate an

understanding of the various decision styles.

The directive style is used by people who prefer simple, clear-cut solutions to problems.

Managers who use this style often make decisions quickly because they do not like to deal with a

lot of information and may consider only one or two alternatives. People who prefer the

TEACHING NOTES FOR LEARNING EXERCISES

Self Learning: What’s Your Personal Decision Style?

This exercise helps students determine their personal decision styles. Personal decision style

refers to differences among people with respect to how they perceive problems and make

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Group Learning: A New Approach to Making Decisions

Managers are typically effective at focusing on problems and diagnosing what is wrong and how

to fix it when they have to make a decision. A new approach to decision making known as

Action Learning

Students think about two times when they made decisions, one that had a positive outcome and

one that didn’t, then complete the table provided in the Action Learning feature. Following that,

they look for the differences between the two decision-making situations and discuss what they

can learn from their past decisions about how to make decisions more effectively in the future.

TEACHING NOTE FOR ETHICAL DILEMMA

The No-Show Consultant

1. Give him a month’s notice and terminate. He’s known as a good consultant, so he probably

won’t have any trouble finding a new job, and you’ll avoid any further problems associated

with his emotional difficulties and his possible alcohol problem.

2. Let it slide. Missing the New York appointment is Carpenter’s first big mistake. He says he

is getting things under control and you believe he should be given a chance to get himself

3. Let Carpenter know that you care about what he’s going through, but insist that he take a

short paid leave and get counseling to deal with his emotional difficulties and evaluate the

seriousness of his problems with alcohol. If the alcohol abuse continues, require him to

attend a treatment program or find another job.

CASE FOR CRITICAL ANALYSIS

A Manager’s Dilemma: Who Gets the Project?

1. Describe aspects of the political decision-making model that are evident in this case.

The political decision-making model is for nonprogrammed decisions when conditions are

uncertain, information is limited, and there is disagreement about the goals to pursue or the

2. What examples of bounded rationality can you identify in the case?

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3. If you were Dave Peterson, what decision would you make? Explain how you arrived at this

decision.

Students who assert that Dave should give the project to Seamus probably agree that the

ON THE JOB VIDEO CASE

Plant Fantasies: Managerial Decision Making

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.

2. List an example of a programmed decision at Plant Fantasies. Identify a nonprogrammed

decision at Plant Fantasies.

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A programmed decision is a decision made in any situation that has occurred often enough to

3. How might managers at Plant Fantasies conduct the final evaluation stage of the decision-

making process when installing a new garden for a client?

Answers will vary, but maintenance teams can observe and track their progress during

BIZFLIX 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—his parents. Tripp’s attachment to his family usually annoys any woman with whom

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Video Case Discussion Questions and Suggested Answers

1. Does “The Bird Problem” present Kit and Ace with a programmed or nonprogrammed

decision? What features of their decision problem led to your choice?

2. 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?

3. Review the earlier section describing the decision-making steps. Which of these steps appear

in “The Bird Problem?” Note the examples of each step that you see.

Each decision-making step appears in the scene. The following lists the steps and gives an

example from the film scene.

• Recognition of decision requirement: a possibly dead bird from Kit pumping the shot gun

more than twice.