(18) COMM 1800 - Leadership and Managerial Decision-Making

types of decisions in organizations

programmed decisions, nonprogrammed decisions

programmed decisions

occur very often; rules are generally already in place with the help of concrete, historical data

nonprogrammed decisions

occur infrequently, so rules cannot be used to help guide decisions; relying on experience, benchmarking, and intuition

• novelty, never-seen-before situation

conditions under which decisions are made

certain, risky, uncertain

all based on information provided about outcomes

certain decision

outcomes for all options and their likelihoods are known

risky decision

outcomes for all options are not known, but the likelihood associated with these multiple outcomes are known

uncertain decision

outcomes for all options are not known, and the likelihood associated with these multiple outcomes are also not known

top managers and decision making

they make many non-programmed decisions - risky and uncertain because much data do not back them

middle managers and decision making

they transform nonprogrammed decisions into programmed ones, thereby turning risky decisions into less risky/more certain ones

lower managers and employees and decision making

they make more programmed and certain decisions

rational decision-making model

obtaining complete and perfect information, reducing or eliminating uncertainty, and evaluating all information rationally and logically

• keeps decision maker focused on facts and logic

barriers to rational decision making

bounded rationality, organizational politics, and changing environment

bounded rationality

limited capacity to assimilate and understand all the information necessary to optimize, due to cognitive ability, time constraints, and imperfect informations

solution to bounded rationality

sacrificing; making simplified models and searching for satisfactory solutions

organizational politics

some actions are carried out for the purpose of acquiring, developing, and using power to influence the outcomes of decisions

changing environment

decision makers may be in an environment where they face many new and interlinked situations

the real world is in a constant state of flux, and the information needed to make a decision is constantly changing