Simplified Model of Motivation Process

NEEDS Hierarchy of needs theory ERG theory Two-factor theory Acquired need theory

COGNITIVE ACTIVITIES Expectancy theory Equity theory Goal setting theory

BEHAVIOURS

REWARDS/REINFORCEMENT Reinforcement theory Social learning theory

As the model indicates, our inner needs (such as the need for food, companionship,and growth) and cognitions (such as knowledge and thoughts about various efforts we might expand and potential reward we might receive) lead to various behaviours. Assuming that the behaviours are appropriate to the situation, they may result in rewards. The rewards then help us reinforce our behaviours, fulfill our needs and provide input into our cognitions about the linkages between our behaviours and possible future rewards. Conversely, lack of rewards may lead to unfulfilled needs, leave behaviours unreinforced, and influence our thinking about where to expand our efforts in the future.

UNIT IV PRACTICAL MANAGEMENT

Part 1

Text A

Forecasting and Decision Making

Practical management is the process of arranging work and resources so that planned goals can be achieved. The success of the organization is profoundly influenced by the forecasts and decisions that managers make.

Forecasting, an important tool for planning, is a process aimed at predicting changing conditions and future events that may significantly affect the organization performance. The forecasting process is important to both planning and decision making because each depends heavily on assessments of future conditions.

Forecasting falls into three main categories: quantitative; technological, or qualitative; and judgmental. These major categories are subdivided into types that need several methods to be accomplished. When choosing the forecasting method managers have to consider such factors as the desired time horizon, type of accuracy needed, ease of understanding, and developmental costs.

Decision making is the process through which managers identify organizational problems and attempt to resolve them. Managers make many different decisions in the course of their work. While managers at lower levels in organizations might not make such monumental decisions as changing the overall mission, many smaller decisions at lower levels have a cumulative effect on organizational effectiveness.

An effective decision-making process generally includes the four steps.

Step 1 Identify the Problem

Step 2 Generate Alternative Solutions

Step 3 Evaluate and Choose among Alternative Solutions

Step 4 Implement and Monitor the Chosen Solution

Managerial decision making typically centres on three types of problems: crisis, non-crisis, and opportunity problems. A crisis problem is a serious difficulty requiring immediate action. A non-crisis problem is an issue that requires resolution but does not simultaneously have the importance and immediacy characteristics of a crisis. Many of the decisions, that managers make, centre on non-crisis problems. An opportunity problem is a situation that offers a strong potential for significant organizational gain if appropriate actions are taken. Opportunities typically involve new ideas and novel directions and, therefore, are major vehicles for organizational innovations.

Managers would be overwhelmed with decision making if they had to handle each and every problem as if it were a completely new situation. Fortunately, that is not the case. Generally, managerial decision situations fall in two categories: programmed and non-programmed. Programmed decisions are those made in routine, repetitive, well-structured situations through the use of predetermined decision rules. In contrast, non-programmed decisions are those for which predetermined decision rules are impractical because the situations are novel and/or ill-structured. Most of the highly significant decisions that managers make fall into the non-programmed category.

Two major types of models regarding how managers make decisions are rational and non-rational. According to the rational model, managers engage in completely rational decision processes, ultimately make optional decisions, and possess and understand all information relevant to their decisions at the time they make them. In contrast to the rational view, several non-rational models of managerial decision making suggest that information-gathering and -processing limitations make it difficult for managers to make optimal decisions.

Steps in an Effective Decision-Making Process

Step	Activities
Identify the problem	Scan the environment for changing circumstances. Categorize the situation as a problem (or non-problem). Diagnose the problem’s nature and causes.
Generate alternative solutions	Restrict criticism of alternatives. Freewheel to stimulate thinking. Offer as many ideas as possible. Combine and improve on ideas.
Evaluate and choose an alternative	Evaluate feasibility. Evaluate quality. Evaluate acceptability. Evaluate costs. Evaluate reversibility.
Implement and monitor the chosen solution	Plan the implementation of the solution. Be sensitive to the decision’s effects on others. Develop follow-up mechanisms.