05. Decision making 1

Course Overview

  • Course Name: MGMT6011020 - Introduction to Management and Business

  • Effective Period: Even semester 2022

  • Targeted Learning Outcomes:

    • LO1: Define the decision-making process.

    • LO2: Explain decision-making settings, goals, and plans.

  • Material References: Sloman, John, and Jones, Elizabeth. Essential Economics for Business, Pearson, 2019.

Accreditation Information

  • BINUS University: Accredited by AACSB, which signifies adherence to the highest standards for business education.

  • Types of Programs Offered:

    • Undergraduate

    • International Undergraduate

    • Master

    • Doctorate

  • Website: bbs.binus.ac.id

Decision-Making Approaches

  • Focus Areas:

    • The five approaches managers can use in decision-making.

    • The eight steps in the decision-making process.

Employability Skills Matrix (ESM)

  • Purpose: Identifies key features and end-of-chapter materials to develop skills sought by employers.

  • Key Example: Google’s acquisition of YouTube in 2006 for $1.65 billion demonstrates exceptional decision-making foresight that most analysts at the time did not appreciate. Today, YouTube generates significant revenue, illustrating the long-term potential recognized by its management.

  • Significance of Decision Making: It is central to management, influencing the effectiveness of the organization.

Understanding the Decision-Making Process

  • Constant Decisions: Managers at various levels make decisions relating to goals, production schedules, and overall organizational direction.

  • Example: Channing Dungey’s decision to cancel the TV show "Roseanne" illustrates the quick actions required in decision-making processes in response to external factors.

Steps in the Decision-Making Process

  • Defining the Process: Decision-making is seen as a process involving steps beyond just making a choice; it applies to personal and corporate decisions alike.

  • Example of Process: Use of a case study to illustrate steps in deciding which laptop computers to purchase.

Types of Managerial Decisions

  • Decisional Focus: Types of decisions include those related to planning, organizing, leading, and controlling.

    • Planning Examples: Long-term organizational objectives, strategies to achieve these goals, and specific short-term objectives.

    • Organizing Examples: Structuring employee reporting, designing jobs, and deciding on organizational structure.

    • Leading Examples: Motivating employees and identifying the most effective leadership style.

    • Controlling Examples: Monitoring significant organizational activities and deviations from performance expectations.

Five Approaches Managers Use in Decision-Making

  1. Rational Decision Making

    • Assumes logical, consistent choices to maximize value.

  2. Bounded Rationality

    • Recognizes limitations in processing information, leading managers to satisfice rather than maximize outcomes due to constraints.

  3. Intuitive Decision Making

    • Relies on feelings and accumulated judgment rather than solely on data or formal processes.

  4. Evidence-Based Management (EBMgt)

    • Utilizes the best available evidence to inform management practices.

  5. Crowdsourcing

    • Engages external stakeholders to contribute ideas and solutions through digital platforms.

Types of Decisions in Management

  • Classification of Problems:

    • Routine and Familiar: Situations where programmed decision-making is applicable.

    • New and Unusual: Requires nonprogrammed decision-making to develop unique, tailored solutions.

Conclusion

  • The notes provide an overview of the critical aspects of decision-making within management as taught in the MGMT6011020 course, highlighting the emphasis on understanding various approaches, processes, and the significance of effective decision-making in achieving organizational objectives.