Lecture Outline And Lecture Notes

lecture OUTLINE AND LECTURE NOTES

The world of work

Tony Tries Another Approach (Text pages 80-81)

Tony, the new manager at Taco Barn, is now dealing with some staffing issues following his memo on schedules. (If the worker missed a shift, he or she was held responsible to either show up or find a replacement.) Still in high school, Matt has missed work because of a scheduling change for track practice and is now on probation for the remainder of the week. His shift leader, Tanya, has explained to Tony that his new policy is not working and that employees are considering leaving. Tony explains his reasons for the change but has not made them known to his entire staff.

1. What assumptions did Tony make when introducing his new scheduling policy?

Tony assumed the employees would understand his reasoning: that he would be more available to his staff if he had less scheduling hassles. But Tony failed to realize that he operated in a vacuum and made incorrect assumptions to suit his quick decision. Tony failed to look at the cause and effect of his decision and how it might lead to other problems among his employees.

2. Which type of decision-making approach did Tony use here?

Tony’s memo represents an authoritative, heavy-handed approach to decision making. He did not solicit any employee input regarding the scheduling. And, once he suspended Matt for not reporting for his shift, his staff felt that he was taking an I-am-the-boss-what-I-say-goes approach to managing Taco Barn. Remember the theories of Douglas McGregor presented in Chapter 2. The American social psychologist presented a simple division of management styles that captured what were fundamentally different ways of managing people.

Theory X suggests there is a controlling/authoritative manager that believes that most employees don’t like to work and will only work at the required level of productivity if they are forced to do so usually under some threat of punishment.

Theory Y suggests there is a more democratic/participatory style in which employees can be trusted to meet production targets without being threatened. They will often seek additional responsibilities because they enjoy the satisfaction of being creative and increasing their own skills.

Tony seems to be using more of a Theory X style, which has placed some stress in the store’s work environment.

3. How could Tony change his interpersonal skills to fix this communication breakdown?

Since managers spend most of their time with their subordinates, effective communication is critical to their use of time. The purpose in doing so is to achieve the organizational objectives by managing employees effectively. However, for this to happen, the information transmitted by the message sender must be understood by the receiver. Unfortunately, many factors cause this process to fail, including conflicting or inappropriate assumptions, different interpretations of the words, differences of perception, emotions either preceding or during communication, poor listening habits, inadequate communication skills, insufficient feedback, and differences in the interpretation of nonverbal communications. This highlights why the communication process is so important and the many ways it can be thrown off course. Tony is experiencing a miscommunication error and needs to get his thoughts and actions back on track, so that he can get his staff back on the same page regarding the objectives of his store.

4. What should Tony do now?

Tony needs to understand the importance of good communication and how easy it is for this process to fall off-center. Tony needs to look at his communication skills and examine how he can make improvements for the sake of his career as a manager. Tony might meet with his staff collectively to discuss the scheduling strategy and other key store issues. He can then form a basic game plan going forward. From there, he might want to meet with employees individually to further evaluate their skills and see where he can best use their strengths and assets in the management of Taco Barn.

Lecture outline lecture notes /
I. making decisions
A. The terms “manager” and “decision maker” are not the same.
1. All managers must make decisions to accomplish organizational goals.
2. Each of the basic management
functions requires different types of decisions.
B. According to Herbert Simon, the manager’s decision process involves three stages:
1. The intelligence stage involves
searching the environment for conditions requiring a decision.
2. The design stage involves inventing, developing, and analyzing possible courses of action.
3. Choice, the final stage, refers to the actual selection of a course of action.
C. Management and Nonmanagement
Decisions
1. Nonmanagement decisions are
concentrated in the choice stage.
2. Management decisions involve the
intelligence and design stages.
D. Managers spend most of their time making decisions. / PowerPoint 4-1
Chapter Title
(Refers to text page 80)
PowerPoint 4-2
Learning Objectives
(Refers to text page 81)
PowerPoint 4-3
Making Decisions
(Refers to text page 82)
Lecture link 4-1
Decision-Making Tips
This lecture link gives some tips for enhancing decision-making. See complete lecture link on page 3.31 of this manual.
II. decision making versus
problem solving
Learning objective 1
Explain the difference between decision making and problem solving. (Text page 82)
A. Decision making is the process of choosing from among various alternatives.
1. A problem is any deviation from the standard.
B. Problem solving is the process of
determining the appropriate responses or actions necessary to alleviate a problem.
C. Although not all decisions involve problems, almost all managerial decisions do. / PowerPoint 4-4
Decision Making Versus Problem Solving
(Refers to text pages 82-83)
critical thinking
exercise 4-1
Lost at Sea
An adaptation of a classic group decision-making exercise. See complete exercise on page 4.33 of this manual.
III. the intuitive approach to
decision making
Learning objective 2
Compare and contrast intuitive and rational approaches to decision making. (Text pages 83-87)
A. The intuitive approach is the
approach used when managers make
decisions based largely on hunches and intuition.
1. Relying only on feelings can cause problems such as:
a. fastening onto unsubstantiated facts and sticking with them.
b. being attracted to scandalous
issues and heightening their significance.
c. pressing every fact into a moral pattern.
d. overlooking EVERYTHING except what is immediately useful.
e. viewing all information as a
romantic story
2. These attachments most affect
managers who cannot modernize their thinking.
B. Two suggestions for overwhelmed managers:
1. Become aware of biases and allow for them.
2. Seek independent options. / PowerPoint 4-5
The Intuitive Approach to Decision Making
(Refers to text pages 83-84)
IV. rational approaches to
decision making
A. Rational approaches try to evaluate factual information through deductive
reasoning.
B. The optimizing approach (sometimes called the rational or scientific
approach) to decision making includes the following steps.
1. Recognize the need for a decision
2. Establish, rank, and weigh the
decision criteria
3. Gather available information and data
4. Identify possible alternatives
5. Evaluate each alternative with respect to all criteria
6. Select the best alternative
C. Limitations of the Optimizing Approach
1. The optimizing approach is based on the concept of the “economic person.”
2. This assumes that people behave
rationally and that people have:
a. clearly defined criteria, and that the relative weights they assign to these criteria are stable
b. knowledge of all relevant alternatives
c. the ability to evaluate each
alternative with respect to all the criteria and arrive at an overall
rating for each alternative
d. the self-discipline to choose the alternative that rates the highest
3. Difficulties with this approach:
a. Assumptions are often unrealistic.
b. Many decisions are based on
limited knowledge of the possible alternatives.
c. It is tempting to manipulate the
information gathered and choose a favored alternative.
D. The Satisficing Approach
1. Herbert Simon’s principle of bounded rationality assumes people have the time and cognitive ability to process only a limited amount of information on which to base
decisions.
2. The decision model of the “administrative person” makes the following
assumptions:
a. A person’s knowledge of alternatives and criteria is limited.
b. People act on the basis of a
simplified, ill-structured, mental concept of the real world.
c. People do not attempt to optimize but will satisfice, or take the first alternative that satisfies their current level of aspiration.
3. Because the decision maker’s knowledge of alternatives is incomplete, the individual cannot optimize, but can only “satisfice.”
a. Optimizing means selecting the best possible alternative.
b. Satisficing means selecting the first alternative that meets the decision maker’s minimum
standard of satisfaction.
c. Level of aspiration refers to the level of performance a person expects to attain; determined by the person’s prior successes and failures.
4. The satisficing approach to decision making is illustrated in Text Figure 4.1.
5. In this model, the “administrative man” selects the first alternative and makes no attempt to optimize.
Progress Check Questions (Text page 87)
1.  Explain the difference between decision making and problem solving.
2.  Explain the intuitive approach to decision making.
3.  What are the six steps in the optimizing approach to decision making?
4.  Explain the satisficing approach to decision making. / PowerPoint 4-6
Rational Approaches to Decision Making
(Refers to text page 84)
PowerPoint 4-7
Limitations of the Optimizing Approaching
(Refers to text pages 84-87)
TEXT REFERENCE
Career Management Box: Developing Habits for a Successful Career
Some habits that might help lead to personal and career success. (Box in text on page 85.) An additional exercise and discussion is available in this chapter on page 4.27.
PowerPoint 4-8
The Satisficing Approach
(Refers to text pages 85-86)
TEXT Figure 4.1
Model of the Satisficing Approach (Text page 86)
V. the decision maker’s
environment
Learning objective 3
Explain the decision maker’s environment and the conditions for making a decision. (Text pages 87-90)
A. The decision is affected by environmental factors:
1. freedom to make decisions (higher-level managers have more flexibility and freedom of choice)
2. the purpose and tradition of the
organization
3. the organization’s formal and informal group structures
4. the decision maker’s superiors and subordinates
B. Other factors – such as industry norms, the political climate, and competition – can modify a decision. / PowerPoint 4-9
The Decision Maker’s
Environment
(Refers to text pages 87-88)
TEXT Figure 4.2
Environmental Factors Influencing Decision Making in an Organization (Text page 87)
VI. conditions for making
decisions
A. Decisions are not always made with the same amount of available information.
B. Certainty
1. In a situation of certainty, the decision maker:
a. knows exactly what will happen.
b. can calculate the precise outcome for each alternative
2. This, however, is rarely possible.
C. Risk
1. The costs of obtaining more information may outweigh the information’s value.
2. A situation of risk occurs when a decision maker is aware of the
relative probabilities of occurrence
associated with each alternative.
3. The expected value analysis technique can be used.
a. The expected payoff of each known alternative is mathematically calculated based on its
probability of occurrence.
b. This won’t help if the act occurs only once.
D. Uncertainty
1. A situation of UNCERTAINTY occurs when a decision maker has very little or no reliable information on which to evaluate the different possible outcomes.
2. The maximax approach (or optimistic or gambling approach) involves selecting the alternative whose best possible outcome is the best of all possible outcomes for all alternatives.
3. The maximin approach (pessimistic approach) involves comparing the worst possible outcomes for each
alternative and selecting the one that is least bad.
4. The risk-averting approach, choosing the alternative with the least variation in possible outcomes, results in more effective planning. / PowerPoint 4-10
Conditions for Making Decisions
(Refers to text pages 88-89)
TEXT Figure 4.3
Umbrella Decision Alternatives and Outcomes (Text page 88)
TEXT Figure 4.4
Possible Approaches to Making Decisions under Uncertainty (Text page 90)
PowerPoint 4-11
Conditions for Making Decisions (continued)
(Refers to text pages 89-90)
ETHICAL MANAGEMENT (Text page 89)
Dave, the newly appointed vice president of a manufacturing company, has just been informed that a team of internal auditors from the corporate head office will be arriving in two days. He prepares his staff as best he can. The day before the auditors arrive, one of his assistants discovers some disturbing news. It appears, he says, that Woody, a 30-year veteran of the plant, has been systematically altering accounts for years. Month by month, Woody has been shipping products to customers without billing them – and then billing customers without shipping anything.
Dave is stunned. Seeking an explanation, he learns that the practice has nothing to do with fraud. Woody wasn't lining his own pocket. He was simply trying to be helpful. His goal was to smooth out the cyclical nature of the orders so that, month by month, the figures sent to the home office appear level and consistent, with no peaks and valleys. Dave discovers that no money has been lost or gained; it all balances out in the end. And while the amount is not immense, the funds affected amount to perhaps 5% of the plant's annual earnings.
In one sense, Woody's adjustments have benefited Dave, who has already been complimented by his boss for his wise forecasts and for meeting his targets so accurately. But Dave also knows that if these practices were to come to light, Woody would be fired instantly. Dave himself, though ignorant of the practice until now, might have some tough explaining to do. After all, Woody has been fudging records and misstating corporate revenues to management, shareholders, and the IRS.
What should Dave do?
Based on the significance of the action, Dave has to report the activity of the shipping director and clear up the operating method he has been using. It is essential that he do this now. He is now aware of how Woody handled the accounts and must understand that he has a better chance of cleaning up the problems sooner than later. Dave has first hand knowledge of the situation. It is the job of the manager to work on or fix problems, particularly one involving falsification of reports to management, shareholders, and the IRS.
Dave must first meet with Woody and get all the facts on his actions, including how long he has been providing inaccurate records. Dave should inform Woody of his intentions. Next Dave must meet with his immediate supervisor to discuss his findings and decide what the next steps should be. Woody has to understand the potential consequences of his actions: he made the decision to provide false reporting on his own and failed to report his activities. Finally, Dave has to put the department back in order by calling all the accounts and explaining that new procedures will be put in place. He may also have to hire a new employee or promote a current employee to the director of shipping position.