A choice made from available alternatives.

The process of identifying problems and opportunities and then resolving them.

Involve situations that have occured often enough to enable decision rules to be developed and applied in the future.

Nonprogrammed decisions

Made in response to situations that are unique, are poorly defined and largely unstructured, and have important consequences for the organization.

All the information the decision maker needs is fully available.

A decision has clear-cut goals and that good information is available, but the future outcomes associated with each alternative are subject to some chance of loss or failure.

Managers know which goals they wish to achieve, but information about alternatives and future events is incomplete.

The goals to be achieved or the problem to be solved is unclear, alternatives are difficult to define, and information about outcomes is unavailable.

Classical model of decision making

Based on rational economic assumptions and manager beliefs about what ideal decision making should be.

Defines how a decision maker should make decisions.

Administrative model of decision making

How managers make decisions in situations that are characterized by uncertainty and ambiguity.

Describes how managers actually make decisions in complex situations rather than dictating how they should make decisions according to a theoretical ideal.

People have limits, or boundaries, on how rational they can be.

Decision makers choose the first solution alternative that satisfies minimal decision criteria.

A quick apprehension of a decision situation based on past experience but without conscious thought.

Political model of decision making

Use for making nonprogrammed decisions when conditions are uncertain, information in limited, and there are manager conflicts about what goals to pursue or what course of action to take.

Informal alliance among manager who support a specific goal.

People who prefer simple, clear-cut solutions to problems.

Managers prefer complex solutions based on a lot of data.

Managers like a broad amount of information.

Managers with a deep concern for others.

Face-to-face interactive group to spontaneously suggest as many ideas as possible for solving a problem.

The tendency of people in groups to suppress contrary opinions.

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Chapter 9 Management

Chapter 9 Management - Managerial Decision Making

Term	Definition
Decision	A choice made from available alternatives.
Decision making	The process of identifying problems and opportunities and then resolving them.
Programmed decisions	Involve situations that have occured often enough to enable decision rules to be developed and applied in the future.
Nonprogrammed decisions	Made in response to situations that are unique, are poorly defined and largely unstructured, and have important consequences for the organization.
Certainty	All the information the decision maker needs is fully available.
Risk	A decision has clear-cut goals and that good information is available, but the future outcomes associated with each alternative are subject to some chance of loss or failure.
Uncertainty	Managers know which goals they wish to achieve, but information about alternatives and future events is incomplete.
Ambiguity	The goals to be achieved or the problem to be solved is unclear, alternatives are difficult to define, and information about outcomes is unavailable.
Classical model of decision making	Based on rational economic assumptions and manager beliefs about what ideal decision making should be.
Normative	Defines how a decision maker should make decisions.
Administrative model of decision making	How managers make decisions in situations that are characterized by uncertainty and ambiguity.
Descriptive	Describes how managers actually make decisions in complex situations rather than dictating how they should make decisions according to a theoretical ideal.
Bounded rationality	People have limits, or boundaries, on how rational they can be.
Satisficing	Decision makers choose the first solution alternative that satisfies minimal decision criteria.
Intuition	A quick apprehension of a decision situation based on past experience but without conscious thought.
Political model of decision making	Use for making nonprogrammed decisions when conditions are uncertain, information in limited, and there are manager conflicts about what goals to pursue or what course of action to take.
Coalition	Informal alliance among manager who support a specific goal.
Directive style	People who prefer simple, clear-cut solutions to problems.
Analytic style	Managers prefer complex solutions based on a lot of data.
Conceptual style	Managers like a broad amount of information.
Behavioral style	Managers with a deep concern for others.
Brainstorming	Face-to-face interactive group to spontaneously suggest as many ideas as possible for solving a problem.
Groupthink	The tendency of people in groups to suppress contrary opinions.

Created by: atompot

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