Unit 8: Decision-Making
The essential function of a manager is to make decisions. Decision-making is about making choices between alternatives to reach a goal or objective. In our personal lives, decision-making can involve determining many things, such as where we live, what foods we eat, and who our friends are. In business, decision-making can revolve around the products and services that a company offers, the markets it serves, the people it hires, and so on.
In this unit, we will look at the decision-making process, paying close attention to the basic decision types, tools, methods, and insights to help you quickly learn how it involves both logic and emotion. When you complete the course, you will have practical tools to quickly determine the type of decision you are trying to make, the available tools and methods you may use, and the way to effectively engage your teams in the process.
Completing this unit should take you approximately 4 hours.
Upon successful completion of this unit, you will be able to:
- list the steps in the management decision-making process; and
- apply the concepts of decision-making within a business situation.
8.1: A Framework for Decision-Making
8.1.1: Case Study: B. Ebbers Creates Biased Decision-Making at WorldCom
Read the introduction and section 11.1, which includes a case study featuring the story of Bernard Ebbers. As the CEO and top manager of a Fortune 500 company called WorldCom, Mr. Ebbers was frequently identified as a difficult man to work for, to the extent that managers working for him often avoided telling him vital information that might have shaped how he made executive decisions. Further adding to the severity of this systemic communication breakdown, Mr. Ebbers was extremely resistant to change, which is a quality that produces failures in management. Use this case as a foundational analysis of all the information presented in Unit 8 of this course. You may want to review this case again after you finish this unit to consider how the outcomes at WorldCom might have been prevented.
8.1.2: The Foundation of Management Decision-Making
This section defines decision-making and lists ethical questions to ask yourself when making a critical decision. It also discusses different types of decisions, when to employ various decision-making approaches, and how to determine which decision-making process is the appropriate one for any given situation.
8.1.3: Decision-Making and Management Challenges
Read this section, which addresses some of the obstacles that you may encounter during the decision-making process. Whenever a manager has to make a decision, he or she will encounter challenges. Such obstacles often arise from the biases of other people and can negatively impact the decision-making process.
8.1.4: Groupthink in the Decision-Making Process
Read this section, which explores the effects of groupthink on the decision-making process. This section includes a compare-and-contrast outline for individual decision-making and group decision-making. Pay attention to the pros and cons and the techniques associated with each. Why is groupthink an unhealthy habit for a manager or an organization?
8.1.5: Developing Your Own Management Decision-Making Skills
Read this section, which suggests some techniques for customizing and maximizing your own managerial decision-making skills. You will be taught how to preemptively imagine and even avoid a particular issue altogether, which is a technique known as the "premortem process". The goal behind learning such a process is to minimize or even prevent bad decision-making.
8.1.6: Framing a Decision
Read this article and think about the ways in which you make decisions. Do you frame the decision first? What are the benefits of this framing process? How can you apply some of these ideas to decisions that you may be in the process of making?
8.2: Making Choices
8.2.1: The Decision-Making Process
Read this article and think about the questions that you typically ask yourself when making decisions. When you decide, do you believe that there is always just one route to your desired outcome? Prepare a productivity table for some of the tasks that are currently on your to-do list. Are the items that come up as priorities the same items that you truly believe to be priorities?
Reflect on the article that you have just read about making decisions.Do you feel confident in your own decision-making skills? Are you able to make a decision and then stay the course and see your actions through to completion?
Share your thoughts on these questions in the course discussion forum. Read the responses that other students have posted and post your own comments. Be sure to take advantage of this opportunity to connect with your peers and to receive meaningful feedback of your own.
8.2.2: Decision-Making Techniques
Read this article and consider the types of decisions you have made in the past. Can you determine, in retrospect, which types of decisions they were? Take a decision that you are currently considering and write a plan about how to resolve it. Does your decision-making plan match these steps? If not, how can your plan be adjusted to accommodate the 10 steps so that you can ensure your decision-making process will be effective?
8.2.3: The Challenges of Decision-Making
Watch this lecture by Sheena Iyengar, a professor at Columbia University Business School, who studies how we make choices and how we feel about the choices we make. She discusses both trivial choices (such as deciding whether to drink Coke or Pepsi) and profound ones. Her groundbreaking research has uncovered some surprising attitudes about our decisions.
8.2.4: Decision-Making
Read this article and consider the areas within your own organization where the majority of decisions are made. Consider the following questions: Are the decision-making topics in your organization (or one you are familiar with) the same as those addressed in the McKinsey survey? Do decisions typically meet expectations within your organization? Do you find that decisions made within your organization are more effective when the process includes employees who are carrying out the implementation of decisions?
8.2.5: Complex Decision-Making
Watch this fascinating video on the world of ants and how each member of an ant colony knows its task. The speaker's research offers insights into all manner of complex systems, including decision-making in organizations.
Unit 8 Assessment
- Receive a grade
Take this assessment to see how well you understood this unit.
- This assessment does not count towards your grade. It is just for practice!
- You will see the correct answers when you submit your answers. Use this to help you study for the final exam!
- You can take this assessment as many times as you want, whenever you want.