Chapter 11 Decision Making, Communication, & Balance
Dec 23, 2015
Chapter 11
Decision Making, Communication, & Balance
©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458
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.
©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458
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.
©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458
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.
©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458
Foodservice Organizations, 5th editionSpears & Gregoire
Types of Decisions
©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458
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
©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458
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.
©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458
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.
©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458
Foodservice Organizations, 5th editionSpears & Gregoire
Decision-Making Techniques
Techniques include:Decision TreesCost-BenefitCost-EffectivenessNetworksLinear Programming
©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458
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.
©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458
Foodservice Organizations, 5th editionSpears & Gregoire
Decision Trees
©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458
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
©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458
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.
©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458
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.
©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458
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.
©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458
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.
©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458
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.
©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458
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.
©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458
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
©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458
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.
©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458
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.
©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458
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.
©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458
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.
©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458
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.
©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458
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.
©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458
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.
©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458
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
©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458
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
©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458
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.
©2004 Pearson Education, Inc. Upper Saddle River, New Jersey 07458
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