Chapter 4 Decision Makers and Decision Making

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Chapter 4Decision Makers and Decision Making
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Who Are the Decision Makers in Business?

• Stockholders
• May vote on major decisions.
• Generally, involvement is limited.
• Board of Directors
• Approves major strategic decisions.
• Oversees general direction of the business.
• Top management
• Makes major strategic decisions.

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Who Are the Decision Makers in Business?(continue
d)

• Middle management
• Implements top management decisions.
• Makes decisions within area of responsibility.
• Professional staff
• Makes decisions in area of expertise.
• First-line supervisors
• Implement higher-level decisions.
• Make day-to-day operational decisions.
• Nonmanagerial employees
• Make decisions regarding performance of their
  individual jobs.

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Management Planning Levels
Strategic
Tactical
Operational
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Management Decisions Planning

• Types of Decisions Planning
• STRATEGIC
• TACTICAL
• OPERATIONAL
• ADAPTIVE
• CONTINGENCY

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The Decision-Making Process

• Strategic decisions
• Decisions that have a major impact on the general
  direction of the firm.
• Have long-range impact.
• Require careful analysis of the firm and its
  environment.
• Are often the result of a strategic planning
  process.
• May involve millions of dollars.
• Are designed to capture opportunities or offset
  competitive weaknesses.
• Involve top management, including board of
  directors.

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The Decision-Making Process(continued)

• Operational decisions
• Decisions that affect the day-to-day actions of
  the business.
• May or may not involve large amounts of capital.
• Deal with specific situations within an
  organization.
• Are made by experienced managers in the area.
• Often have standard operating procedures
  available to guide decisions.
• Require less analysis than strategic decisions
  do.

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The Decision-Making Process(continued)

• Problem (Adaptive Contingency) Solving
  Decisions
• Decision making aimed at correcting an adverse
  situation that has developed.
• Situation is a deviation from normal operations.
• May be minor or of crisis proportions.
• Often need quick decisions to find solutions
  acceptable to all involved.
• There may be no easy solution.

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Decision Making

• The Process
• Problem Identification
• Information Analysis
• Issue
• Employees
• Generating Alternatives
• Evaluating Alternatives
• Implementing Evaluating the Solution

• The Application
• Consider the following scenario
• You are interviewing a capable woman applicant
  for a job as salesperson. She is better qualified
  than the men you just interviewed. Nevertheless,
  you know that some of your top customers prefer
  dealing with men, and you will lose some sales if
  you hire her. What do you do?