This is a nonprogrammed decision because for several decades, customers of fast-food restaurants were more concerned with the taste and price of the food, rather than the healthiness. For example, in 2005, McDonald’s became aware of a need to respond to growing customer concerns regarding foods high in fat and calories. These are called nonprogrammed decisions. Making strategic, tactical, and operational decisions is an integral part of leadership.ĭecisions that are unique and important require conscious thinking, information gathering, and careful consideration of alternatives. To deal with this problem, the restaurant might have a policy stating that every time they receive a valid customer complaint, the customer should receive a free dessert, which represents a decision rule. Because this is a recurring problem for restaurants, it may be regarded as a programmed decision. For example, many restaurants face customer complaints as a routine part of doing business. The automated response we use to make these decisions is called the decision rule. These types of straightforward decisions are termed programmed decisions these are decisions that occur frequently enough that we develop an automated response to them. You probably do not spend much time on these mundane decisions. For example, before you come to class, you make simple and habitual decisions such as what to wear, what to eat, and which route to take as you go to and from home and school. Think about the current impact of Vladimir Putin’s decision to invade Ukraine, and the ripple effect of that choice on organizations, nations and leaders worldwide, as well as millions (perhaps billions) of innocent bystanders.ĭespite the far-reaching nature of the decisions in the previous examples, not all decisions have major consequences or even require a lot of thought. When individuals make decisions, they (and other stakeholders) have to live with the consequences of that decision. economy in the last recession, and those decisions had an impact on the larger global economy. Similarly, the decisions made by firms to trade in mortgage-backed securities had massive negative consequences for the entire U.S. Sherron Watkins, a former Enron employee and now-famous whistleblower, uncovered the accounting problems and tried to communicate the need to enact change. For example, the decisions made by executives and consulting firms for Enron ultimately resulted in a $60 billion loss for investors, thousands of employees without jobs, and the loss of all employee retirement funds. These decisions may affect the lives of others and change the course of an organization. Individuals throughout organizations use the information they gather through a variety of communications to make a wide range of decisions. This chapter will help you understand how to make decisions alone or in a group while avoiding common decision-making traps. Therefore, increasing effectiveness in decision making is an important part of maximizing your effectiveness at work. While it can be argued that leadership is decision making, half of the decisions made by leaders within organizations fail (Ireland & Miller, 2004 Nutt, 2002 Nutt, 1999). What Is Decision Making?ĭecision making refers to making choices among alternative courses of action-which may also include inaction. “ puzzle perspective” by jugbo, licensed under CC BY-NC-ND 2.0. Figure 5.5.1: Effective decision making helps you put the right pieces together.
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