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Copyright©2012PearsonEducation,Inc.PublishingasPrenticeHallManagement,EleventhEditionbyStephenP.Robbins&MaryCoulter©2012PearsonEducation,Inc.Allrightsreserved7-1Copyright©2012PearsonEducation,Inc.PublishingasPrenticeHallManagement,EleventhEditionbyStephenP.Robbins&MaryCoulter©2012PearsonEducation,Inc.Allrightsreserved7-2•Describetheeightstepsinthedecision-makingprocess•Explainthefourwaysmanagersmakedecisions•Classifydecisionsanddecision-makingconditions•Classifydecisionsanddecision-makingconditions•Identifyeffectivedecision-makingtechniquesCopyright©2012PearsonEducation,Inc.PublishingasPrenticeHallManagement,EleventhEditionbyStephenP.Robbins&MaryCoulter©2012PearsonEducation,Inc.Allrightsreserved7-3DecisionMaking•Decision-makingachoicefromtwoormorealternatives.•Problem-anobstaclethatmakesitdifficulttoachieveadesiredgoalorpurpose.Copyright©2012PearsonEducation,Inc.PublishingasPrenticeHallManagement,EleventhEditionbyStephenP.Robbins&MaryCoulter©2012PearsonEducation,Inc.Allrightsreserved7-4TheDecisionMakingProcess1.Identifyingaproblemanddecisioncriteriaandallocatingweightstothecriteria2.Developing,analyzing,andselectinganalternativethatcanresolvetheproblem3.Implementingtheselectedalternative4.Evaluatingthedecision’seffectivenessCopyright©2012PearsonEducation,Inc.PublishingasPrenticeHallManagement,EleventhEditionbyStephenP.Robbins&MaryCoulter©2012PearsonEducation,Inc.Allrightsreserved7-5Exhibit7-1:Decision-MakingProcessCopyright©2012PearsonEducation,Inc.PublishingasPrenticeHallManagement,EleventhEditionbyStephenP.Robbins&MaryCoulter©2012PearsonEducation,Inc.Allrightsreserved7-6Step1:IdentifyingaProblem•CharacteristicsofProblems–Aproblembecomesaproblemwhenamanagerbecomesawareofit.–Thereispressuretosolvetheproblem.–Themanagermusthavetheauthority,information,orresourcesneededtosolvetheproblem.Copyright©2012PearsonEducation,Inc.PublishingasPrenticeHallManagement,EleventhEditionbyStephenP.Robbins&MaryCoulter©2012PearsonEducation,Inc.Allrightsreserved7-7Step2:IdentifyingDecisionCriteria•Decisioncriteriaarefactorsthatareimportant(relevant)toresolvingtheproblem,suchas:–Coststhatwillbeincurred(investmentsrequired)–Riskslikelytobeencountered(chanceoffailure)–Outcomesthataredesired(growthofthefirm)Copyright©2012PearsonEducation,Inc.PublishingasPrenticeHallManagement,EleventhEditionbyStephenP.Robbins&MaryCoulter©2012PearsonEducation,Inc.Allrightsreserved7-8Exhibit7-2:ImportantDecisionCriteriaCopyright©2012PearsonEducation,Inc.PublishingasPrenticeHallManagement,EleventhEditionbyStephenP.Robbins&MaryCoulter©2012PearsonEducation,Inc.Allrightsreserved7-9Step3:AllocatingWeightstotheCriteria•Decisioncriteriaarenotofequalimportance:–Assigningaweighttoeachitemplacestheitemsinthecorrectpriorityorderoftheirimportanceinthedecision-makingprocess.Copyright©2012PearsonEducation,Inc.PublishingasPrenticeHallManagement,EleventhEditionbyStephenP.Robbins&MaryCoulter©2012PearsonEducation,Inc.Allrightsreserved7-10Step4:DevelopingAlternatives•Identifyingviablealternatives–Alternativesarelisted(withoutevaluation)thatcanresolvetheproblem.Copyright©2012PearsonEducation,Inc.PublishingasPrenticeHallManagement,EleventhEditionbyStephenP.Robbins&MaryCoulter©2012PearsonEducation,Inc.Allrightsreserved7-11Exhibit7-3:PossibleAlternativesCopyright©2012PearsonEducation,Inc.PublishingasPrenticeHallManagement,EleventhEditionbyStephenP.Robbins&MaryCoulter©2012PearsonEducation,Inc.Allrightsreserved7-12Step5:AnalyzingAlternatives•Appraisingeachalternative’sstrengthsandweaknesses–Analternative’sappraisalisbasedonitsabilitytoresolvetheissuesrelatedtothecriteriaandcriteriaweight.Copyright©2012PearsonEducation,Inc.PublishingasPrenticeHallManagement,EleventhEditionbyStephenP.Robbins&MaryCoulter©2012PearsonEducation,Inc.Allrightsreserved7-13Exhibit7-4:EvaluationofAlternativesCopyright©2012PearsonEducation,Inc.PublishingasPrenticeHallManagement,EleventhEditionbyStephenP.Robbins&MaryCoulter©2012PearsonEducation,Inc.Allrightsreserved7-14Step6:SelectinganAlternative•Choosingthebestalternative–Thealternativewiththehighesttotalweightischosen.Copyright©2012PearsonEducation,Inc.PublishingasPrenticeHallManagement,EleventhEditionbyStephenP.Robbins&MaryCoulter©2012PearsonEducation,Inc.Allrightsreserved7-15Step7:ImplementingtheAlternative•Puttingthechosenalternativeintoaction-ConveyingthedecisiontoandgainingcommitmentfromthosewhowillcarryoutthealternativeCopyright©2012PearsonEducation,Inc.PublishingasPrenticeHallManagement,EleventhEditionbyStephenP.Robbins&MaryCoulter©2012PearsonEducation,Inc.Allrightsreserved7-16Step8:EvaluatingDecisionEffectiveness•Thesoundnessofthedecisionisjudgedbyitsoutcomes.–Howeffectivelywastheproblemresolvedbyoutcomesresultingfromthechosenalternatives?–Iftheproblemwasnotresolved,whatwentwrong?Copyright©2012PearsonEducation,Inc.PublishingasPrenticeHallManagement,EleventhEditionbyStephenP.Robbins&MaryCoulter©2012PearsonEducation,Inc.Allrightsreserved7-17Exhibit7-5:DecisionsManagersMayMakeCopyright©2012PearsonEducation,Inc.PublishingasPrenticeHallManagement,El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