6.1 Overview of Managerial Decision-Making - Organizational Behavior | OpenStax
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Organizational Behavior6.1 Overview of Managerial Decision-Making
Organizational Behavior6.1 Overview of Managerial Decision-Making
Table of contents
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Table of contents
Preface
1 Management and Organizational Behavio
Introduction
1.1 The Nature of Work
1.2 The Changing Workplace
1.3 The Nature of Management
1.4 A Model of Organizational Behavior and Management
Key Terms
Summary of Learning Outcomes
Chapter Review Questions
Critical Thinking Case
2 Individual and Cultural Differences
Introduction
2.1 Individual and Cultural Factors in Employee Performance
2.2 Employee Abilities and Skills
2.3 Personality: An Introduction
2.4 Personality and Work Behavio
2.5 Personality and Organization: A Basic Conflict?
2.6 Personal Values and Ethics
2.7 Cultural Differences
Key Terms
Summary of Learning Outcomes
Chapter Review Questions
Management Skills Application Exercises
Managerial Decision Exercises
Critical Thinking Case
3 Perception and Job Attitudes
Introduction
3.1 The Perceptual Process
3.2 Ba
iers to Accurate Social Perception
3.3 Attributions: Interpreting the Causes of Behavio
3.4 Attitudes and Behavio
3.5 Work-Related Attitudes
Key Terms
Summary of Learning Outcomes
Chapter Review Questions
Management Skills Application Exercises
Managerial Decision Exercises
Critical Thinking Case
4 Learning and Reinforcement
Introduction
4.1 Basic Models of Learning
4.2 Reinforcement and Behavioral Change
4.3 Behavior Modification in Organizations
4.4 Behavioral Self-Management
Key Terms
Summary of Learning Outcomes
Chapter Review Questions
Management Skills Application Exercises
Managerial Decision Exercises
Critical Thinking Case
5 Diversity in Organizations
Introduction
5.1 An Introduction to Workplace Diversity
5.2 Diversity and the Workforce
5.3 Diversity and Its Impact on Companies
5.4 Challenges of Diversity
5.5 Key Diversity Theories
5.6 Benefits and Challenges of Workplace Diversity
5.7 Recommendations for Managing Diversity
Key Terms
Summary of Learning Outcomes
Chapter Review Questions
Management Skills Application Exercises
Managerial Decision Exercises
Critical Thinking Case
6 Perception and Managerial Decision Making
Introduction
6.1 Overview of Managerial Decision-Making
6.2 How the Brain Processes Information to Make Decisions: Reflective and Reactive Systems
6.3 Programmed and Nonprogrammed Decisions
6.4 Ba
iers to Effective Decision-Making
6.5 Improving the Quality of Decision-Making
6.6 Group Decision-Making
Key Terms
Summary of Learning Outcomes
Chapter Review Questions
Management Skills Application Exercises
Managerial Decision Exercises
Critical Thinking Case
7 Work Motivation for Performance
Introduction
7.1 Motivation: Direction and Intensity
7.2 Content Theories of Motivation
7.3 Process Theories of Motivation
7.4 Recent Research on Motivation Theories
Key Terms
Summary of Learning Outcomes
Chapter Review Questions
Management Skills Application Exercises
Managerial Decision Exercises
Critical Thinking Case
8 Performance Appraisal and Rewards
Introduction
8.1 Performance Appraisal Systems
8.2 Techniques of Performance Appraisal
8.3 Feedback
8.4 Reward Systems in Organizations
8.5 Individual and Group Incentive Plans
Key Terms
Summary of Learning Outcomes
Chapter Review Questions
Management Skills Application Exercises
Managerial Decision Exercises
Critical Thinking Case
9 Group and Intergroup Relations
Introduction
9.1 Work Groups: Basic Considerations
9.2 Work Group Structure
9.3 Managing Effective Work Groups
9.4 Intergroup Behavior and Performance
Key Terms
Summary of Learning Outcomes
Chapter Review Questions
Management Skills Application Exercises
Managerial Decision Exercises
Critical Thinking Case
10 Understanding and Managing Work Teams
Introduction
10.1 Teamwork in the Workplace
10.2 Team Development Over Time
10.3 Things to Consider When Managing Teams
10.4 Opportunities and Challenges to Team Building
10.5 Team Diversity
10.6 Multicultural Teams
Key Terms
Summary of Learning Outcomes
Chapter Review Questions
Management Skills Application Exercises
Managerial Decision Exercises
Critical Thinking Case
11 Communication
Introduction
11.1 The Process of Managerial Communication
11.2 Types of Communications in Organizations
11.3 Factors Affecting Communications and the Roles of Managers
11.4 Managerial Communication and Corporate Reputation
11.5 The Major Channels of Management Communication Are Talking, Listening, Reading, and Writing
Key Terms
Summary of Learning Outcomes
Chapter Review Questions
Management Skills Application Exercises
Managerial Decision Exercises
Critical Thinking Case
12 Leadership
Introduction
12.1 The Nature of Leadership
12.2 The Leadership Process
12.3 Leader Emergence
12.4 The Trait Approach to Leadership
12.5 Behavioral Approaches to Leadership
12.6 Situational (Contingency) Approaches to Leadership
12.7 Substitutes for and Neutralizers of Leadership
12.8 Transformational, Visionary, and Charismatic Leadership
12.9 Leadership Needs in the 21st Century
Key Terms
Summary of Learning Outcomes
Chapter Review Questions
Management Skills Application Exercises
Managerial Decision Exercises
Critical Thinking Case
13 Organizational Power and Politics
Introduction
13.1 Power in Interpersonal Relations
13.2 Uses of Powe
13.3 Political Behavior in Organizations
13.4 Limiting the Influence of Political Behavio
Key Terms
Summary of Learning Outcomes
Chapter Review Questions
Management Skills Application Exercises
Managerial Decision Exercises
Critical Thinking Case
14 Conflict and Negotiations
Introduction
14.1 Conflict in Organizations: Basic Considerations
14.2 Causes of Conflict in Organizations
14.3 Resolving Conflict in Organizations
14.4 Negotiation Behavio
Key Terms
Summary of Learning Outcomes
Chapter Review Questions
Management Skills Application Exercises
Managerial Decision Exercises
Critical Thinking Case
15 External and Internal Organizational Environments and Corporate Culture
Introduction
15.1 The Organization's External Environment
15.2 External Environments and Industries
15.3 Organizational Designs and Structures
15.4 The Internal Organization and External Environments
15.5 Corporate Cultures
15.6 Organizing for Change in the 21st Century
Key Terms
Summary of Learning Outcomes
Chapter Review Questions
Management Skills Application Exercises
Managerial Decision Exercises
Critical Thinking Case
16 Organizational Structure and Change
Introduction
16.1 Organizational Structures and Design
16.2 Organizational Change
16.3 Managing Change
Key Terms
Summary of Learning Outcomes
Chapter Review Questions
Management Skills Application Exercises
Managerial Decision Exercises
Critical Thinking Case
17 Human Resource Management
Introduction
17.1 An Introduction to Human Resource Management
17.2 Human Resource Management and Compliance
17.3 Performance Management
17.4 Influencing Employee Performance and Motivation
17.5 Building an Organization for the Future
17.6 Talent Development and Succession Planning
Key Terms
Summary of Learning Outcomes
Chapter Review Questions
Management Skills Application Exercises
Managerial Decision Exercises
Critical Thinking Case
18 Stress and Well Being
Introduction
18.1 Problems of Work Adjustment
18.2 Organizational Influences on Stress
18.3 Buffering Effects of Work related Stress
18.4 Coping with Work related Stress
Key Terms
Summary of Learning Outcomes
Chapter Review Questions
Management Skills Application Exercises
Critical Thinking Case
19 Entrepreneurship
Introduction
19.1 Overview of Entrepreneurship
19.2 Characteristics of Successful Entrepreneurs
19.3 Business Model Canvas
19.4 New Venture Financing
19.5 Design Thinking
19.6 Optimal Support for Entrepreneurship
Key Terms
Summary of Learning Outcomes
Chapter Review Questions
Management Skills Application Exercises
Managerial Decision Exercises
Critical Thinking Case
A | Scientific Method in Organizational Research
B | Scoring Keys for Self-Assessment Exercises
References
Index
What are the basic characteristics of managerial decision-making?
Decision-making is the action or process of thinking through possible options and selecting one.
It is important to recognize that managers are continually making decisions, and that the quality of their decision-making has an impact—sometimes quite significant—on the effectiveness of the organization and its stakeholders. Stakeholders are all the individuals or groups that are affected by an organization (such as customers, employees, shareholders, etc.).
Members of the top management team regularly make decisions that affect the future of the organization and all its stakeholders, such as deciding whether to pursue a new technology or product line. A good decision can enable the organization to thrive and survive long-term, while a poor decision can lead a business into bankruptcy. Managers at lower levels of the organization generally have a smaller impact on the organization’s survival, but can still have a tremendous impact on their department and its workers. Consider, for example, a first-line supervisor who is charged with scheduling workers and ordering raw materials for her department. Poor decision-making by lower-level managers is unlikely to drive the entire firm out of existence, but it can lead to many adverse outcomes such as:
reduced productivity if there are too few workers or insufficient supplies,
increased expenses if there are too many workers or too many supplies, particularly if the supplies have a limited shelf life or are costly to store, and
frustration among employees, reduced morale, and increased turnover (which can be costly for the organization) if the decisions involve managing and training workers.
Deciding When to Decide
While some decisions are simple, a manager’s decisions are often complex ones that involve a range of options and uncertain outcomes. When deciding among various options and uncertain outcomes, managers need to gather information, which leads them to another necessary decision: how much information is needed to make a good decision? Managers frequently make decisions without complete information; indeed, one of the hallmarks of an effective leader is the ability to determine when to hold off on a decision and gather more information, and when to make a decision with the information at hand. Waiting too long to make a decision can be as harmful for the organization as reaching a decision too quickly. Failing to react quickly enough can lead to missed opportunities, yet acting too quickly can lead to organizational resources being poorly allocated to projects with no chance of success. Effective managers must decide when they have gathered enough information and must be prepared to change course if additional information becomes available that makes it clear that the original decision was a poor one. For individuals with fragile egos, changing course can be challenging because admitting to a mistake can be harder than forging ahead with a bad plan. Effective managers recognize that given the complexity of many tasks, some failures are inevitable. They also realize that it’s better to minimize a bad decision’s impact on the organization and its stakeholders by recognizing it quickly and co
ecting it.
What’s the Right (Co
ect) Answer?
It’s also worth noting that making decisions as a manager is not at all like taking a multiple-choice test: with a multiple-choice test there is always one right answer. This is rarely the case with management decisions. Sometimes a manager is choosing between multiple good options, and it’s not clear which will be the best. Other times there are multiple bad options, and the task is to minimize harm. Often there are individuals in the organization with competing interests, and the manager must make decisions knowing that someone will be upset no matter what decision is reached.
What’s the Right (Ethical) Answer?
Sometimes managers are asked to make decisions that go beyond just upsetting someone—they may be asked to make decisions in which harm could be caused to others. These decisions have ethical or moral implications. Ethics and morals refer to our beliefs about what is right vs. wrong, good vs. evil, virtuous vs. co
upt. Implicitly, ethics and morals relate to our interactions with and impact on others—if we never had to interact with another creature, we would not have to think about how our behaviors affected other individuals or groups. All managers, however, make decisions that impact others. It is therefore important to be mindful about whether our decisions have a positive or a negative impact. “Maximizing shareholder wealth” is often used as a rationalization for placing the importance of short-term profits over the needs of others who will be affected by a decision—such as employees, customers, or local citizens (who might be affected, for example, by environmental decisions). Maximizing shareholder wealth is often a short-sighted decision, however, because it can harm the organization’s financial viability in the future