4.1. LEARNING OBJECTIVES EVALUATE SCHOOLS OF MANAGEMENT THINKINGEVALUATE SCHOOLS OF MANAGEMENT THINKING DESCRIBE LEVELS, TYPES, STAGES OF DECISION MAKINGDESCRIBE.

4.14.1

LEARNING OBJECTIVESLEARNING OBJECTIVES

• EVALUATE SCHOOLS OF EVALUATE SCHOOLS OF MANAGEMENT THINKINGMANAGEMENT THINKING

• DESCRIBE LEVELS, TYPES, STAGES DESCRIBE LEVELS, TYPES, STAGES OF DECISION MAKINGOF DECISION MAKING

• COMPARE INDIVIDUAL & COMPARE INDIVIDUAL & ORGANIZATIONAL DECISION ORGANIZATIONAL DECISION MAKINGMAKING

**4.24.2

LEARNING OBJECTIVESLEARNING OBJECTIVES

• ASSESS CHANGING MANAGEMENT ASSESS CHANGING MANAGEMENT PROCESSPROCESS

• EXPLAIN HOW INFO SYSTEMS AID EXPLAIN HOW INFO SYSTEMS AID MANAGERS & DECISION MAKINGMANAGERS & DECISION MAKING

**

4.34.3

MANAGEMENT CHALLENGESMANAGEMENT CHALLENGES

• WHAT MANAGERS DOWHAT MANAGERS DO• INTRODUCTION TO DECISION MAKINGINTRODUCTION TO DECISION MAKING• INDIVIDUAL MODELS OF DECISION INDIVIDUAL MODELS OF DECISION

MAKINGMAKING• HOW INFORMATION TECHNOLOGY HAS HOW INFORMATION TECHNOLOGY HAS

CHANGED MANAGEMENT PROCESSCHANGED MANAGEMENT PROCESS

**

4.44.4

THREE MANAGEMENT THEORIESTHREE MANAGEMENT THEORIES

• TECHNICAL - RATIONAL TECHNICAL - RATIONAL “Classical”“Classical”

• BEHAVIORALBEHAVIORAL

• COGNITIVECOGNITIVE**

4.54.5

THREE MANAGEMENT THEORIESTHREE MANAGEMENT THEORIES

TECHNICAL - RATIONAL “Classical”:TECHNICAL - RATIONAL “Classical”:

• EMPHASIZES PRECISION OF TASKEMPHASIZES PRECISION OF TASK

• ORGANIZES TASKS INTO JOBSORGANIZES TASKS INTO JOBS

• ORGANIZES JOBS INTO ORGANIZES JOBS INTO PRODUCTION SYSTEMSPRODUCTION SYSTEMS

**

4.64.6

THREE MANAGEMENT THEORIESTHREE MANAGEMENT THEORIES

BEHAVIORAL:BEHAVIORAL:

• EMPHASIZES ORGANIZATION’S EMPHASIZES ORGANIZATION’S ADAPTATION TO EXTERNAL, ADAPTATION TO EXTERNAL, INTERNAL ENVIRONMENTINTERNAL ENVIRONMENT

**

4.74.7

THREE MANAGEMENT THEORIESTHREE MANAGEMENT THEORIES

COGNITIVE:COGNITIVE:• EMPHASIZES LEARNING & EMPHASIZES LEARNING &

APPLYING KNOW-HOW, APPLYING KNOW-HOW, KNOWLEDGEKNOWLEDGE

• HOW WELL MANAGERS PROVIDE HOW WELL MANAGERS PROVIDE MEANING TO NEW MEANING TO NEW SITUATIONSSITUATIONS

**

4.84.8

EVOLUTION OF MANAGEMENT THEORYEVOLUTION OF MANAGEMENT THEORY

• CLASSICAL (1880-1927)CLASSICAL (1880-1927)

• CONTEMPORARY (1930-1962)CONTEMPORARY (1930-1962)

• POSTMODERN (1965 - present)POSTMODERN (1965 - present)

**

4.94.9

CLASSICAL PERIOD:CLASSICAL PERIOD:

• TECHNICAL-RATIONAL VIEWTECHNICAL-RATIONAL VIEW

• TIME & MOTION STUDIESTIME & MOTION STUDIES

• SCIENTIFIC MANAGEMENTSCIENTIFIC MANAGEMENT

Planning, organizing, coordinating, Planning, organizing, coordinating, deciding, controllingdeciding, controlling

**

4.104.10

CONTEMPORARY PERIOD:CONTEMPORARY PERIOD:

• SOCIAL PSYCHOLOGISTSSOCIAL PSYCHOLOGISTS

• SOCIOLOGISTSSOCIOLOGISTS

• ORGANIZATIONAL BEHAVIORISTSORGANIZATIONAL BEHAVIORISTS

Emphasized individualEmphasized individual

collective behaviorcollective behavior

**

4.124.12

POSTMODERN PERIOD:POSTMODERN PERIOD:

• ECONOMISTSECONOMISTS

• SOCIOLOGISTSSOCIOLOGISTS

• MANAGEMENT THEORISTSMANAGEMENT THEORISTS

Emphasizes knowledge basis of Emphasizes knowledge basis of organizationsorganizations

**

4.124.12

BEHAVIORAL MODEL OF MANAGEMENT:BEHAVIORAL MODEL OF MANAGEMENT:

High-volume; high-speed workHigh-volume; high-speed work

Variety; fragmentation; brevityVariety; fragmentation; brevity

Speculation; hearsay; gossipSpeculation; hearsay; gossip

Complex web of interactions; contactsComplex web of interactions; contacts

Prefer verbal mediaPrefer verbal media

Control agendaControl agenda

**

4.134.13

MANAGERIAL ROLES (Mintzberg):MANAGERIAL ROLES (Mintzberg):

Interpersonal: Interpersonal: figureheads & leadersfigureheads & leaders

Informational: Informational: receive; disseminate receive; disseminate critical infocritical info

Decisional: Decisional: initiate activities; handle initiate activities; handle disturbances; allocate resources; disturbances; allocate resources; negotiate conflictsnegotiate conflicts

**

4.144.14

Wrapp’s SUCCESSFUL MANAGER:Wrapp’s SUCCESSFUL MANAGER:

OPERATING PROBLEMS

GENERAL MANAGER

OPERATING DECISIONS

CORPORATE STRATEGY

4.154.15

COGNITIVE PERSPECTIVECOGNITIVE PERSPECTIVE

ORGANIZATION:ORGANIZATION:

• Is knowing, sentient organismIs knowing, sentient organism

• Can “learn” & “know”Can “learn” & “know”

• Success depends on learning- & Success depends on learning- & knowledge processing infrastructureknowledge processing infrastructure

• Two schoolsTwo schools

**

4.164.16

1. MANAGERIAL SENSE-MAKING:1. MANAGERIAL SENSE-MAKING:

MANAGERS:MANAGERS:• Create mental mapsCreate mental maps• Are problem solvers, decision makersAre problem solvers, decision makers• Are information processorsAre information processors• Create & support information Create & support information

processingprocessing

**

4.174.17

2. KNOWLEDGE-BASED VIEW OF FIRM:2. KNOWLEDGE-BASED VIEW OF FIRM:

KNOWLEDGE:KNOWLEDGE:• Central productive / strategic assetCentral productive / strategic asset• Explicit (codified); Tacit (know-how)Explicit (codified); Tacit (know-how)• Includes information, social relations; know-how; Includes information, social relations; know-how;

skillsskills• Change based on new informationChange based on new information• Firm creates value by integrating specialized Firm creates value by integrating specialized

knowledgeknowledge• Strategy: Develop core competenciesStrategy: Develop core competencies

**

4.184.18

LEVELS OF DECISION MAKINGLEVELS OF DECISION MAKING

• STRATEGIC:STRATEGIC: Long-term objectives; Long-term objectives; resources; policiesresources; policies

• MANAGEMENT CONTROL:MANAGEMENT CONTROL: Monitor use of Monitor use of resources; performanceresources; performance

• KNOWLEDGE-LEVEL:KNOWLEDGE-LEVEL: Evaluate potential Evaluate potential innovations; knowledgeinnovations; knowledge

• OPERATIONAL:OPERATIONAL: How to carry out specific How to carry out specific day-to-day tasksday-to-day tasks

**4.194.19

TYPES OF DECISIONSTYPES OF DECISIONS

• STRUCTURED:STRUCTURED: Repetitive; Repetitive; routine; routine; definite procedure;definite procedure; certainty certainty

• SEMISTRUCTURED:SEMISTRUCTURED: One or more One or more factors not structured; riskfactors not structured; risk

• UNSTRUCTURED:UNSTRUCTURED: Unique; non-Unique; non-routine; uncertainty; requires routine; uncertainty; requires judgmentjudgment

**4.204.20

INFO SYSTEMS, LEVELS, DECISIONSINFO SYSTEMS, LEVELS, DECISIONS

TPS

OAS MIS

KWS

DSS

ESS

ORGANIZATIONAL LEVELTYPE OFDECISION OPERATIONAL KNOWLEDGE MANAGEMENT STRATEGIC

STRUCTURED ACCOUNTS RECEIVABLE

ELECTRONIC PRODUCTIONSCHEDULING COST OVERRUNS

SEMI- BUDGETSTRUCTURED PREPARATION

PROJECTSCHEDULING

FACILITYLOCATION

UNSTRUCTURED PRODUCT DESIGN NEW PRODUCTSNEW MARKETS

4.214.21

STAGES OF DECISION MAKINGSTAGES OF DECISION MAKING

• INTELLIGENCE:INTELLIGENCE: Collect Collect information; information; identify problemidentify problem

• DESIGN:DESIGN: Conceive alternatives; select Conceive alternatives; select criteriacriteria

• CHOICE:CHOICE: Use criteria to evaluate Use criteria to evaluate alternatives; select alternatives; select

• IMPLEMENTATION:IMPLEMENTATION: Put decision into Put decision into effect; allocate resources; controleffect; allocate resources; control

**

SOURCE: Simon, The New Science of Management Decision (1960) 4.224.22

• RATIONAL:RATIONAL: Comprehensive Comprehensive rationality; rationality; evaluate all evaluate all alternativesalternatives

• SATISFICING:SATISFICING: Bounded rationality; choose Bounded rationality; choose first “good” alternativefirst “good” alternative

• MUDDLING:MUDDLING: Successive comparison; Successive comparison; marginal changesmarginal changes

• PSYCHOLOGICAL:PSYCHOLOGICAL: Cognitive types; Cognitive types; manages differ in how they make choicesmanages differ in how they make choices

**

INDIVIDUAL MODELS OF INDIVIDUAL MODELS OF DECISION MAKINGDECISION MAKING

4.234.23

• RATIONAL ACTOR:RATIONAL ACTOR: Maximize Maximize organization’s benefitsorganization’s benefits

• BUREAUCRATIC:BUREAUCRATIC: Follow standard Follow standard operating procedures (SOP)operating procedures (SOP)

• POLITICAL:POLITICAL: Key groups compete and Key groups compete and bargainbargain

• ““GARBAGE CAN”:GARBAGE CAN”: Organizations not Organizations not rational; solutions accidentalrational; solutions accidental

**

ORGANIZATIONAL MODELS ORGANIZATIONAL MODELS OF DECISION MAKINGOF DECISION MAKING

4.244.24

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4.25

4.264.26