Chapter 11 Decision Making, Communication, & Balance.

Chapter 11

Decision Making, Communication, & Balance

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Foodservice Organizations, 5th editionSpears & Gregoire

Linking Processes

Coordinates activities of the system so can accomplish goals & objectives.

The Linking Processes are: Decision making – selection of a course of action

from a variety of alternatives. Communication – the vehicle whereby decisions &

other information are transmitted. Balance – management’s ability to maintain

organizational stability.

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Foodservice Organizations, 5th editionSpears & Gregoire

Decision Making

Stages in Decision Making process: Definition of the problem. Identification & analysis of possible courses of

action. Actual selection of a particular course of action.

Managerial decisions encompass all three stages.

Nonmanagerial decisions are concentrated in selection stage.

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Foodservice Organizations, 5th editionSpears & Gregoire

Types of Decisions

Programmed decisions – reached by following established policies & procedures.

Nonprogrammed decisions – relatively unstructured decision that takes a higher degree of judgment. Organizational – relate to the purposes, objectives,

& activities of the organization. Personal – concerned with the manager’s individual

goals.

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Foodservice Organizations, 5th editionSpears & Gregoire

Types of Decisions

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Foodservice Organizations, 5th editionSpears & Gregoire

The Decision-Making Process

Recognizing & Defining the SituationIdentifying Alternatives Evaluating AlternativesSelecting the Best Alternative Implementing the Chosen AlternativeFollow-up & Evaluation

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Foodservice Organizations, 5th editionSpears & Gregoire

Conditions for Making Decisions

Decision Conditions:Certainty – adequate information is

available to assure results of decision.Risk – results of decisions are uncertain.Uncertainty – occurrence of future events

cannot be predicted.

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Foodservice Organizations, 5th editionSpears & Gregoire

Approaches to Uncertainty

Optimistic approach – choose the alternative that is the best of all possible outcomes.

Pessimistic approach – select the alternative with the least possible negative outcomes.

Risk-averting approach – choose the alternative that has the least variation among its possible outcomes.

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Foodservice Organizations, 5th editionSpears & Gregoire

Decision-Making Techniques

Techniques include:Decision TreesCost-BenefitCost-EffectivenessNetworksLinear Programming

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Foodservice Organizations, 5th editionSpears & Gregoire

Decision Trees

Assesses the consequences of a sequence of decisions with reference to a particular problem.

Involves linking a number of event “branches” graphically.

Starts with a primary decision that has at least two alternatives to be evaluated.

Result is a schematic resembling a tree.

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Foodservice Organizations, 5th editionSpears & Gregoire

Decision Trees

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Foodservice Organizations, 5th editionSpears & Gregoire

Cost-Benefit

Compares the costs & financial benefits of a project or decision.Sometimes financial value placed on

intangible benefitsCompare cost of implementing &

maintaining programs with increase in performance attributed to themPayoff measured in money or achievement

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Foodservice Organizations, 5th editionSpears & Gregoire

Cost-Effectiveness

Provides a comparison of alternative courses of action in terms of their cost & effectiveness in attaining a specific objecting.

Customarily used to:Minimize dollar cost.Maximize some measurement of output

subject to a budgetary constraint.

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Foodservice Organizations, 5th editionSpears & Gregoire

Networks

Graphic representation of a project, depicting the flow & sequence of defined activities & events.

Activity – work to be performed.Event – marks the beginning or end of

an activity.Project – a group of tasks that are

performed in a certain sequence to reach an objective

©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458

Foodservice Organizations, 5th editionSpears & Gregoire

Networks

Management Project StepsSpecify activities to complete the project.Develop time estimates for each activity:

Most optimistic time, or shortest time, assuming most favorable conditions.

Most likely time, which implies the most realistic time.

Most pessimistic time, or the longest time, assuming the most unfavorable conditions.

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Foodservice Organizations, 5th editionSpears & Gregoire

Networks

Time duration – adding the amount of time for each path through the network.

Critical path- the path with the longest duration.

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Foodservice Organizations, 5th editionSpears & Gregoire

Linear Programming

Technique useful in determining an optimal combination of resources to obtain a desired objective.

One of the most versatile, powerful, & useful techniques for making managerial decisions.

Must identify a measurable objective or criterion of effectiveness.

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Foodservice Organizations, 5th editionSpears & Gregoire

Other Techniques

Game theory – brings in actions of an opponent into a simulated decision situation.

Queuing theory – develops relationships involved in waiting in line.

Simulation – use of some device for imitation of a real-life occurrence.

Artificial intelligence – a computer program that attempts to duplicate the thought processes of experienced decision makers.

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Foodservice Organizations, 5th editionSpears & Gregoire

Managerial Decision Making

Managerial decision making possibilities: Individual – managers make decisions

themselves using information available to them.

Combination – managers make decisions after consulting with others.

Group – managers can allow decisions to be made by the group.

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Foodservice Organizations, 5th editionSpears & Gregoire

Individual Versus Group

Largely depends on factors such as:Complexity & importance of the problemTime availableDegree of acceptance requiredAmount of information needed to make a

decisionUsual manner in which decisions are made

in an organization

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Foodservice Organizations, 5th editionSpears & Gregoire

Methods of Group Decision Making

Interacting Groups – an interacting group where members discuss, argue, & agree upon the best alternative.

Delphi Groups –develop consensus of expert’s opinions.

Nominal Groups – a structured technique for generating creative & innovative alternatives or ideas.

Focus Groups – 10 to 20 people brought together to discuss some aspect of an establishment.

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Foodservice Organizations, 5th editionSpears & Gregoire

Advantages & Disadvantages

Advantages:More information & knowledge are

available.Generation of more alternatives.

Disadvantages:Prevention of full discussion of facts &

alternatives.Takes time & is expensive.

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Foodservice Organizations, 5th editionSpears & Gregoire

Advantages & Disadvantages

Groupthink – situation where reaching an agreement becomes more important to group members than arriving at a sound decision.

Risky shift- tendency of individuals to take more risk in groups than as individuals.

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Foodservice Organizations, 5th editionSpears & Gregoire

Communication

Determines how effectively people work together & coordinate their efforts to achieve an organization’s objectives.

Good communication will not compensate for poor planning or poor decisions.

©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458

Foodservice Organizations, 5th editionSpears & Gregoire

Communication Defined

Effective communication – the process of sending a message so the message received is as close as possible to the message intended.

Organization Communication Perspectives: Interpersonal – communication between individuals Organizational – communication within the formal

organizational structure.

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Foodservice Organizations, 5th editionSpears & Gregoire

Communication Process

Sender encodes information Message is transmitted through the

appropriate channel.Receiver decodes information

Noise – interference that may distort or compete with the message during its transmission.

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Foodservice Organizations, 5th editionSpears & Gregoire

Communication Process

One-way communication – sender communicates without expecting or getting feedback from the receiver.

Two-way communication- feedback is provided by the receiver.

Feedback: enhances the effectiveness of the communication

process. Helps to ensure the intended message is received.

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Foodservice Organizations, 5th editionSpears & Gregoire

Interpersonal Communication

Flows from individual to individual in face-to-face situations.

The objective should be to increase the area of understanding.

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Foodservice Organizations, 5th editionSpears & Gregoire

Barriers to Communication

Common barriers:Hearing an expected message Ignoring conflicting informationDiffering perceptionsEvaluating the source Interpreting words differently Ignoring nonverbal cuesBecoming emotional

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Foodservice Organizations, 5th editionSpears & Gregoire

Techniques for Improved Communication

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Foodservice Organizations, 5th editionSpears & Gregoire

Organizational Communication

Getting an accurate message to members of the organization.

Influential factors:Formal channels of communicationAuthority structure Job specialization Information ownership

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Foodservice Organizations, 5th editionSpears & Gregoire

Directions of Internal Communication

Downward – higher level employees communicate to those at lower levels.

Upward – lower level employees communicate with those at higher levels.

Horizontal – employees communicate to others at same level in organization.

Diagonal – employees communicate across departments and levels.

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Foodservice Organizations, 5th editionSpears & Gregoire

Informal

Oral communications (face-to-face)Develops in organizations to supplement

formal communication channels.Grapevine – informal communication

channel in which information is passed from one employee to another.

©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458

Foodservice Organizations, 5th editionSpears & Gregoire

Formal

Written communicationInterpreted more accurately & is often

used when consistent action is required.Provides a permanent record of the

exchange.Inhibits feedback & interchange.

©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458

Foodservice Organizations, 5th editionSpears & Gregoire

Negotiation

Process in which two or more parties make offers, counteroffers, & concessions to reach an agreement.

Recommendations: Research the individual with whom you will be

negotiating Begin with a positive overture Address problems, not personalities Pay little attention to initial offer Emphasize win-win situations Create an open & trusting environment

©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458

Foodservice Organizations, 5th editionSpears & Gregoire

Balance

Managerial adaptation to changing environmental, political, social, & technological conditions.

Pillars of organizational structure: Stability – responds to the need for efficiency Entrepreneurial – continual adaptiveness &

innovation Habit-breaking – willingness to reorganize

frequently, adjusting to various forces