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* * * * * * * * * * * * * * * * * * * * * * Chapter 5 Decision Making, Learning, Creativity, and Innovation 5–* Learning Objectives After studying the chapter, you should be able to: Differentiate between programmed and nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process. Describe the six steps that managers should take to make the best decisions. Identify the advantages and disadvantages of group decision making, and describe techniques that can improve it. 5–* Learning Objectives (cont’d) Explain the role that organizational learning and creativity play in helping managers to improve their decisions. 5–* The Nature of Managerial Decision Making Decision Making The process by which managers respond to opportunities and threats by analyzing options, and making decisions about goals and courses of action. Decisions in response to opportunities—occurs when managers respond to ways to improve organizational performance. Decisions in response to threats—occurs when managers are impacted by adverse events to the organization. 5–* Programmed Decisions Programmed Decision Routine, virtually automatic decision making that follows established rules or guidelines. Managers have made the same decision many times before. There are rules or guidelines to follow based on experience with past decisions. Example: Disciplinary action to be taken concerning a tardy employee. 5–* Nonprogrammed Decisions Non-Programmed Decisions Nonroutine decision making that occurs in response to unusual, unpredictable opportunities and threats. The are no rules to follow since the decision is new. Decisions are made based on information, a manager’s intuition, and judgment. Example: Deciding to invest in additional production equipment to meet forecasted demand. 5–* The Classical Model Classical Model of Decision Making A prescriptive model of decision making that assumes the decision maker can identify and evaluate all possible alternatives and th
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