You should remember

Although the decision-making process may be different from company to company, it will involve a general format. The first step is to identify the problem and this is done by means of a situational analysis that compares the current situation with the desired one. If there is a difference, a problem has been documented. The next step is to define the performance standards by which management will know that the problem has been solved. This creates accountability. Potential solutions to the problem are identified, but a recommendation for implementation cannot be made until the consequences of each option are evaluated. Once a solution has been selected it will be pilot-tested. Information derived from the pilot test, called feedback, will be used to make adjustments before full implementation of the selected solution to the problem.

Know the Concepts

Do You Know the Basics?

1. What is the decision-making process?

2. Describe linear thinking?

3. What is systems thinking?

4. How do programmed and nonprogrammed decisions differ?

5. What is the relationship between organization level and types of decisions?

6. Which type of manager will show the most enthusiasm for organizational change?

7. What is the difference between the conditions of certainty and risk?

8. Under what conditions is a new venture most likely to fail? Why?

9. What are the steps in the managerial decision-making process?

Terms for Study

algorithm operational decision

anticipatory mode performance standard’s

business process risk pilot testing

management problem avoider

brainstorming problem seeker

case study problem solver

certainty programmed decision

crisis management reactive mode

decision-making process risk

feedback strategic decision

learning organization systems thinking

tactical decision

linear thinking uncertainty

nonprogrammed decision