12/01/2026

MANAGERIAL DECISION MAKING

Pham Thanh Van, Ms
Tel: 0904.365.654
Email: [Link]@[Link]

Material
• Bazerman, M.H. (2006). Judgment in
Managerial Decision Making. 6th Edition,
New York: Willey & Sons
• Trần Việt Lâm (2017). Giáo trình Ra
quyết định trong kinh doanh. Nhà Xuất
Bản Đại học Kinh tế Quốc dân.
• Trần Việt Lâm (2009). Giáo trình
Phương pháp tối ưu trong kinh doanh.
Nhà Xuất Bản Đại học Kinh tế Quốc dân.

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EVALUATION

10% 50% Individual participation

Group work (2)
Individual brainstorming (2)
20% 20% Final examination

REWARD &
PUNISHMENT

Reward Punishment

Giving an idea Private talk

Asking an question Using the phone
during class hours
Answering an question
Comments
Doing homework

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MANAGERIAL DECISION-MAKING

01 Part 1: OVERVIEW OF MANAGERIAL DECISION MAKING

Types of Decisions and Problems, Decision-Making Models, Decision-Making Steps,

Personal Decision Framework, Increasing Participant in Decision Making

02 Part 2: INFORMATION AND MANAGERIAL DECISION MAKING

Information, Technology and Management-Information and Managerial Decision

Making- Decision Errors and Bias- Creativity in Decision Making

03 Part 3: ETHICS AND MANAGERIAL DECISION MAKING

The Nature of Ethics- A Framework for Ethics Decision Making in Business- The Role of
Leadership in a Corporate Culture- Leadership styles influence Ethical Decision

04 Part 4: QUANTITATIVE ANALYSIS AND DECISION MAKING

Problem solving and Decision Making- Models of Cost, Revenue, and Profit-Decision
Analysis, Economic Order Quantity (EOQ), Inventory models, Decision Analysis

Part 1. OVERVIEW OF
MANAGERIAL DECISION MAKING

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01 Types of Decisions and Problems?

Decision, Decision making, Programmed and non-programmed decisions,
Certainty, Risk, Uncertainty and Ambiguity

02 How decision differ and

Contents How managers decide?
Types of decision/ Three models of decision making

03 Decision-Making Steps
Recognition of Decision Requirement, Diagnosis and Analysis of Causes,
Development of Alternatives, Selection of Desired Alternative, Evaluation and
Feedback

04 Personal Decision Framework

Directive style, Analytical style, Behavioral style

05 Increasing Participant in Decision

Making
The Vroom-Jago Model, New Decision Approaches for Turbulent Times

“My view of Heaven is of a place where no ever has to make a decision”

Herbert Hoover

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NOW…
Tell me about your self? (name, age, provinces, hobbies…); And what do want to do after you graduate? Please tell
me why and how to achieve it? I suggested several potential ways to start/write to the next chapter of your life
below.

Getting yourself an abroad internship Find a secure job/ salaried job

01 04 Please tell about what type of job do
you want to do? fields?
Which countries? Why?

Take a break and go travelling Becoming an entrepreneur

02 After working so hard during your degree,
you definitely deserve a break
05

Continue your studies (master, PhD,…) Others

03 Becoming a researcher/lecturer
06 Why? Please explain your choice?

1. Types of
Decisions
and
Problems
Decision Programmed Certainty, Risk, Uncerta
& Decision Making & Nonprogrammed Decision inty & Ambiguity

What is a ‘decision’? Management One primary different

What is decision decision typically fall between programmed and
making? into one of two nonprogrammed
Sources of categories: decisions related to the
Complexity for programmed & degree of certainty or
Today’s Managerial nonprogrammed uncertainty that managers
Decision Makers deal with in making
decision
decision

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01 Find a job
You are finishing your bachelor of business management
at a well-known school. Your credentials are quite good,

DECISION and you expect to obtain job offers from a number of

consulting firms. How are you going to select the right
job?

A decision is 02 Hire a manager

You are the director of the marketing division of a rapidly
expanding consumer company. You need to hire a
a choice product manager for a new ‘‘secret’’ product that the
company plans to introduce to the market in fifteen
made from months. How will you go about hiring the appropriate
individual?.
available
alternatives 03 Fund a new As the owner of a venture capital firm, you have a
project number of proposals that meet your preliminary
considerations but only a limited budget with
which to fund new projects. Which projects will
you fund?

You are on the corporate acquisition staff of a large

04 Advise the
company conglomerate that is interested in acquiring a small-to-
moderate-sized firm in the oil industry. What firm, if
any, will you advise the company to acquire?

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DECISION MAKING

Decision making is the Decision making can be defined

process of identifying as
the problems and “the selection of a course of
opportunities and then action from among alternatives”
resolving them.  Decision making is at the
heart of planning:
For plans to be formulated and
implemented, decisions on
certain courses of action have to
DECISION MAKING be taken.

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3 components of a decision

A decision
Problem: Why do you have to make a decision?

Alternatives: What choice(s) do you have?

Deciding: On what criteria(s) will you decide?

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What is a “A decisions should be

regarded as allocations
decision to a of real resources,
whether tangible or
manager? intangible.”

“Decision and execution

should be seen as two parts
of a whole; if there is no
execution, then the decision
was just a slogan”.

(Wang, Caroline- Managerial-

Decision Making and Leadership)

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Why making
a decision is so
HARD?

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SOURCES
OF COMPLEXITY FOR
TODAY’S MANAGERIAL
DECISION MAKERS

A working knowledge of eight

intertwined factors contributing to
decision complexity can help decision
makers successfully navigate the
stream

DECISION EIGHT DECISION

MAKERS FACTORS COMLEXITY

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SOURCES OF COMPLEXITY
Interdisciplinary input
01 Decision complexity is greatly increased when technical specialists such
as lawyers, tax advisers, marketing experts…are consulted before
making a decisions
Pooled decision making
02 After pooled input, complex decisions wind their way through the
organization, with individuals and groups interpreting, modifying, and
sometimes resisting

Value judgments
As long as decisions are made by people with differing back-grounds,
03 perceptions, aspirations, and values, the decision-making process
will be marked by disagreement over what is right or wrong, good or
bad, and ethical or unethical
Unintended consequences
04 The law of unintended consequences show that results of purposeful actions are often
difficult to predict.
Real Estate

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SOURCES OF COMPLEXITY
Multiple criteria
05 A decision today must satisfy a number of often-conflicting criteria
representing the interests of different groups  Identifying stakeholders
and balancing their conflicting interests is a major challenge for today’
decision makers
Intangibles
06 Factors such as customer good-will, employee morale, increased
bureaucracy, and aesthetic appeal…although difficult to measure, often
determine decision alternatives

Risk and Uncertainty

07 Poor choices can prove costly. Yet right decision can open up
whole new worlds of opportunity
Long-term implications
08 Major decisions generally have a ripple effect, with today’s
decision creating the need for later rounds of decisions.

Real Estate

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2. How decision differ and

How managers decide?

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2.1. Types of Decision

System 1 vs System 2 thinking

How do you make decisions?

System 1 thinking System 2 thinking

Intuitive Rational

Fast, automatic, effortless, Slower, conscious, effortful,

implicit, and emotional explicit, and logical
Examples: understand 1st Examples: playing chess
language

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Types of Decision
Programmed vs Nonprogrammed

PROGRAMMED
DECISIONS: Programmed decisions are
A decision made in made in response to recurring
response to a organizational problems
situation that has
occurred often
enough to enable
decision rules to be
developed and
applied in the future.
Example 2
The types of skills required to fill
Example 1 certain jobs, the reorder point for Note:
The decision to reorder paper manufacturing inventory, exception Once managers formulate decision
and other office supplies reporting for expenditures 10% or rules, subordinates/delegates and
when inventories drop to a more over budget, and selection of other can make the decision, freeing
certain level freight routes for product deliveries. managers for other tasks

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Types of Decision
Programmed vs Nonprogrammed

NONPROGRAMMED
DECISIONS: Many nonprogrammed
A decision made in decisions involve strategic
response to a situation planning, because uncertainty
that is unique, is is great and decisions are
poorly defined and complex
largely unstructured,
and has important
consequences for the
organization.

Example 1 Example 2 Example 3

Build a new factories Develop a new product or Enter a new geographical
service market or relocate
headquarters to another city

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COMPARISON OF TYPES OF DECISIONS

Programmed Decisions Nonprogrammed Decisions
Problem Frequent, repetitive, routine. Much Novel, unstructured. Much uncertainty
certainty regarding cause-and effect regarding cause-and-effect relationship
relationships
Procedure Dependence on policies, rules, and definite Necessity for creativity, intuition, tolerance
procedure for ambiguity, creative problem solving
Examples
Business firm Periodic reorders of inventory Diversification into new products and market
University Necessary grade point average for good Construction of new classroom facilities
academic standing
Health care Procedure for admitting patients Purchase of experimental equipment
Government Merit system for promotion of state Reorganization of state government
employees agencies

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2.2. WHY
DECISION
FAILS?

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Conditions THAT AFFECT THE POSSIBILITY OF DECISION FAILURE

In a perfect world
Managers would have all the information necessary
for making decisions

In reality
Some things are unknowable; thus, some decisions
will fail to solve the problem or attain the desired
outcome.

Solutions
Managers try to obtain information about decision
alternatives that will reduce decision uncertainty

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CONDITIONS THAT AFFECT THE POSSIBILITY

OF DECISION FAILURE

 One primary difference between programmed and nonprogrammed

decisions relates to the degree of certainty or uncertainty that
managers deal with in making the decision
 While programmed decisions can be made in situations involving
certainty, many situations that managers deal with everyday
involve at least some degree of uncertainty and require
nonprogrammed decision making
 Every decision situation can be organized on a scale according to
the availability of information and the possibility of failure.

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2.3. 4 CONDITIONS IN MAKING DECISION

 No model is completely right for all decisions

Risk Uncertainty
Certainty Ambiguity
A situation in which a The situation that
The situation in A condition in which the
decision has clear-cut occurs when
which all the goals to be achieved or the
goals and good managers know which
information the problem to be solved is
information is goals they wish to
decision maker unclear, alternatives are
available, but the achieve, but the
needs is fully difficult to define, and
future outcomes information about
available information about
associated with each alternatives and the
alternative are future events is outcomes is unavailable
subject to chance incomplete.

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CERTAINTY
 Certainty means that all the information is fully available. Managers have
information on operating conditions, resource cost or constraints, and
each course of action and possible outcome (the state that exists when
decision makers have accurate and comprehensive information).
 For example: If a company considers a $10,000 investment in new
equipment that it knows for certain will yield $4,000 in cost savings per
year over the next five years, managers can calculate a before-tax rate of
return of about 40%. If managers compare this investment with one that
will yield only $3,000 per year in cost savings, they can confidently select
the 40% return.
 Note: few decisions are certain in the real world.
 Most contain risk or uncertainty.

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RISK
 Risk means that a decision has clear-cut goals and that good
information is available, but the future outcomes associated with each
alternative are subject to chance (the state that exists when the
probability of success is less than 100 % and losses may occur).
 However, enough information is available to allow the probability of a
successful outcome for each alternative to be estimated.
 Statistic analysis can be used to calculate the probabilities of success or
failure.
 For example: Mc Donald’s can analyze potential customer
demographics, traffic pattern, supply logistics, and the local competition
and come up with reasonably good forecasts of how successful a
restaurant will be in each possible location.

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UNCERTAINTY
 Uncertainty means that managers know which goals they wish to achieve,
but information about alternatives and future events is incomplete.
Managers do not have enough information to be clear about alternatives
or estimate their risk (the state that exists when decision makers have
insufficient information).
 Factors that may affect a decision, such as price, production costs, volume,
or future interest rate are difficult to analyze and predict.
 Managers may have to make assumptions from which to forget the
decision even though it will be wrong if the assumptions are incorrect.
 Managers may have to come up with creative approaches to alternatives
and use personal judgment to determine which alternative is best.
 Many decisions made under uncertainty do not produce the desired
results, but managers face uncertainty every day. They find creative ways
to cope with uncertainty in order to make more effective decisions.

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AMBIGUITY
 Ambiguity means that the goals to be achieved or the problems
to be solved is unclear, alternatives are difficult to define, and
information about outcomes is unavailable
 Ambiguity is by far the most difficult decision situation.
 For example: Ambiguity is what students would feel if an
instructor created some groups, told each group to complete a
project, but gave the groups no topic, direction, or guidelines
whatsoever.
 Ambiguity has been called a wicked decision problem.
Fortunately, most decisions are not characterized by ambiguity.

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A good decision is a
decision made with good
consideration. A bad
decision is made without
thinking carefully, or with
pure instinct.
It is about how it is made.

A right decision is a decision with good result.

A good decision can turn out to be a wrong decision, for
example, if the execution is poorly delivered.
It is about the consequence.
A good decision cannot guarantee a right decision, but
don’t depend wholly on your luck!

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2.4. DECISION-MAKING MODELS

01 Classical Model 02 Administrative Model 03 Political Model

A decision-making model is useful
A decision-making model A decision-making model that
based on the assumption that describes how managers for making nonprogrammed
managers should make logical actually make decisions in decisions when conditions are
decisions that will be in the situations characterized by uncertain, information is limited,
organization’s best economic nonprogrammed decisions, and managers may disagree
interests. uncertainty, and ambiguity. about what goals to pursue or
what course of action to take.

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CLASSICAL
MODEL
 The classical model of decision making is considered to be
normative, which means it defines how a decision maker
should make decisions. It does not describe how managers
actually make decisions so much as it provides guidelines on
how to reach an ideal outcome for organization.
The growth of quantitative decision techniques that use
computers has expanded the use of the classical approach.
Quantitative technique include such things as decision trees,
payoff matrices, break-even analysis, linear programming,
forecasting, and operations research models.
The four assumptions underlying this model are as follows:

01 02 03 04
The decision maker operates The decision maker strives for Criteria for evaluating alternatives The decision maker is rational and
to accomplish goals that are conditions of certainty, are known. The decision maker uses logic to assign values, order
known and agreed upon. gathering complete information. selects the alternative that will preferences, evaluate alternatives, and
Problems are precisely All alternatives and potential maximize the economic return to make the decision that will maximize
formulated and defined. results of each are calculated. the organization. the attainment of organizational goals.

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ADMINISTRATIVE
MODEL
 The administrative model is considered to be descriptive, meaning
that it describes how managers actually make decisions is complex
situations rather than dictating how they should make decisions according
to a theoretical ideal. The administrative model recognizes the human and
environmental limitations that affect the degree to which managers can
pursue a rational decision-making process.
The administrative model relies on assumption different from those of the
classical model and focus on organizational factors that influence
individual decisions. It is more realistic than the classical model for
complex, nonprogrammed decisions.
 According to the administrative model:

01 02 03 04
Decision goal often are vague, Rational procedures are not Managers’ searches for Most managers settle for a satisficing
conflicting, and lack consensus always used, and, when they alternatives are limited rather than a maximizing solutions,
among managers. Managers are, they are confined to a because of human, partly because they have limited
often are unaware of problems simplistic view of problem that information, and resource information and partly because they
or opportunities that exist in the does not capture the complexity constraints. have only vague criteria for what
organization. of real organizational events. constitutes a maximizing solution.

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Intuition represents a quick apprehension of a

decision situation based on past experience but
without conscious thought  In today’s fast-
paced, turbulent business environment, institution
plays an increasingly important role in decision
making because it enable managers to quickly SOME ASPECTS
identify solutions without going through OF
painstaking computations. ADMINISTRATIVE
DECISION
MAKING
ADMINISTRATIVE DECISION
MAKING
SOME ASPECTS OF

Bounded rationality and satisficing

The administrative model is based on the work of Herbert A. Simon, who
proposed two concepts:
Bounded rationality means that people have limits, or boundaries, on how
rational they can be. The organization is incredibly complex, and managers
have the time and ability to process only a limited amount of information with
which to make decisions.
 Satisficing means that decision makers choose the first solution alternative
that satisfies minimal decision criteria. Rather than pursuing all alternatives to
identify the single solution that appears to solve the problem, even if better
solutions are presumed to exist. The decision maker cannot justify the time
and expense of obtaining complete information.

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POLITICAL
MODEL
 The political model of decision making is useful for
making nonprogrammed decisions when conditions are
uncertain, information is limited, and managers may
disagree about what goals to pursue or what course of
action to take. The political model closely resembles the
real environment in which most managers and decision
makers operate.
 The political model begins with four basic assumptions:

01 02 03 04
Organizations are made up Information is ambiguous Managers do not have the time,
of groups with diverse and incomplete. The recourses or mental capacities to Managers engage in the
interests, goals and values. attempt to be rational is identify all dimensions of the push and pull of debate to
Managers disagree about limited by the complexity problems and process all relevant decide goals and discuss
the problem priorities and of many problems as well information. Managers talk to alternatives. Decision are
may not understand or share as personal and each other and exchange the results of bargaining
the goals and interests of organizational constraints. viewpoints to gather information and discussion among
other manager. and reduce ambiguity coalition members.

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CHARACTERISTICS OF
SUMMARY
CLASSICAL,
ADMINISTRATIVE AND
POLITICAL DECISION
MAKING MODELS Classical model Administrative Model Political Model
Recent research into
decision-making Clear-cut problem and Vague problem and Pluralistic; conflicting
procedures found rational, goals goals goals
classical procedures to be
associated with high Condition of certainty Condition of uncertainty Condition of
performance for uncertainty/ambiguity
organizations in stable Full information about Limited information
environment. However, alternatives and their about alternatives and Inconsistent viewpoints;
administrative and outcomes their outcomes ambiguous information
political decision-making
procedures and intuition Rational choice by Satisficing choice for Bargaining and
have been associated individual for maximizing resolving problem using discussion among
with higher performance
in unstable environments
outcomes intuition coalition member
in which decisions must
be made rapidly and
under more difficult
conditions.

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3. Decision
Making Steps

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DECISION-MAKING STEPS

1ST Step
Recognition of Decision Requirement
2nd Step
Diagnosis and Analysis of Causes

Six Steps
3rd Step
Development of Alternatives
In the Managerial
4th Step
Selection of Desired Alternatives
Decision-Making
Process
5th Step
Implementation of Chosen Alternative
6th
Evaluation and Feedback

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Step 1. Recognition
Of Decision Requirement
Managers confront a
decision requirement in the
form of either a problem or Problem
an opportunity A problem occurs when
organizational accomplishment is
Some information comes less than established goals. Some
from periodic financial aspects of performance is
reports, performance unsatisfactory.
reports and other sources
that are designed to Opportunity
discover problems before An opportunity exists when
they become too serious managers see potential
accomplishment that exceeds
Managers also take
specified current goals.
advantage of informal
sources  They talk to Recognition
other managers, gather Managers see the possibility of
opinions on how things are enhancing performance beyond
going, and seek advice on current levels.
which problems should be
tackled or which
opportunities embraced

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Step 2. Diagnosis and Analysis of Causes

ONCE a problem or opportunity comes Refining

The understanding of situation
to a manager’s attention: should be refined Diagnosis
The step in the decision making process
in which managers analyze underlying
causal factors associated with the
decision situation
Warning
Managers make a mistake here if
they jump right into generating
alternatives without first exploring
the cause of the problem more
deeply
Questions
Managers should ask a series of
questions to specify underlying
causes.

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Step 3. Development of Alternatives

1st Individual Brainstorming

List the causes of traffic jam in Hanoi nowadays.
You have 5 minutes.
Note:
- Number your list.
- Think specifically.
- You can use any references, but pay attention to the time limit.

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Series of Questions
What
What is the state of disequilibrium affecting us?
What is the urgency of the problem?
What is the interconnectedness of events?
What results came from which activity?

To whom Where
To whom did it occur? Where did it occur?

How When
How did it occur? When did it occur?

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Once the problem or opportunity has been

recognized and analysed, decision makers begins
to consider taking action Generate possible
alternatives solutions:

Studies find that

Limiting the search for alternatives is
a primary cause of decision failure in
organizations
For a programmed decision
Feasible alternatives are easy to identify
and in fact usually are already available
within the organization’s rules and
procedures
For nonprogrammed decision
Require developing new courses of
action that will meet the company’s
needs
For decision made under conditions
of high uncertainty
Development of Alternatives Managers can develop only one or two
custom solutions that will satisfice for
handling the problem.

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Step 4. Selection of Desired Alternative

Risk and uncertainty
Choosing among alternatives
The best alternative also depends on managers’
The best alternative is one in which the personality factors and
solution best fits the overall goals and willingness to accept risk and
values of the organization and uncertainty
achieves the desired results using the
fewest resources
Risk propensity
Risk propensity is the willingness to
The decision choice undertake risk with the opportunity
of gathering an increased payoff.
The decision choice is the selection of
The level of risk a manager is
the most promising of several
willing to accept will influence the
alternative courses of action  The
analysis of cost and benefits to be
manager tries to select the choice with
derived from any decision.
the least amount of risk and uncertainty.

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Step 5. Implementation of Chosen Alternative

1
The possibility of success
The ultimate success of the chosen
alternative depends on whether it can be
translated into action.

2 IMPLEMENTATION
Requirements
Communication, motivation, and
leadership skills must be used to see that The implementation stage involves the use managerial,
the decision is carried out. administrative, and persuasive abilities to ensure that the
chosen alternative is carried out.
3 Implementation may require discussion with people
Ability and desire affected by the decision  When employees see that
managers follow up on their decisions by tracking
If managers lack the ability or desire to implementation success, they are more committed to
implement decisions, the chosen positive action.
alternative cannot be carried out to
benefit the organization.

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Step 6.
Evaluation
In the evaluation stage of
the decision process,
decision makers gather
information that tells them
how well the decision was
implemented and whether it
was effective in achieving its
goals FEEDBACK
Feedback is important because
decision making is a continuous,
never-ending process
Decision making is not completed when
an executive or broad of directors votes
yes or no. Feedback provides decision
makers with information that can
precipitate a new decision cycle

Feedback is the part of monitoring that assesses

whether a new decision needs to be made.

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4. Decision Framework

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PERSONAL
DECISION
FRAMEWORK
Not all managers go about making
decisions in the same way.
In fact, significant differences distinguish
the ways in which individual managers
may approach problems and make
decisions concerning them.
These differences can be explained by
the concept of personal decision styles.

The role of personal styles in decision-making process

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Decision Styles

Directive style Analytical style Conceptual style Behavioral style

People who tend toward a The behavioral style is often

The directive style: people who Managers with an analytical conceptual style also like to the style adopted by managers
prefer simple, clear-cut style like to consider complex consider a broad amount of having a deep concern for
solutions to problems. solutions based on as much information. However, they are others as individuals. Managers
Managers who use this style data as they can gather. These more socially oriented than those using this style like to talk to
often make decisions quickly individuals carefully consider with analytical style and like to people one-on-one and
because they do not like to deal alternatives and often base talk to others about the problem understand their feelings
with a lot of information and may their decisions on objective, and possible alternatives for about the problem and the
consider only one or two rational data from management solving it. Managers using a effect of a given decision upon
alternatives. People who prefer control systems and other conceptual style consider many them. People with a behavioral
the directive style generally are sources. They search for the broad alternatives, rely on style usually are concerned with
efficient and rational to rely on best possible decision based information from both people and the personal development of
existing rules or procedures on the information available systems, and like to solve others and may make decisions
for making decisions
problems creatively that help others achieve their
goals

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Decision Styles
Elon Musk – Directive Style Gwynne Shotwell – Analytical Style

Insisted on pursuing reusable rocket technology Find stable revenue for SpaceX
 Invest heavily in vertical landing technology  Successful negotiation and execution of:
 Continuing experiments despite repeated failures • Commercial Resupply Services (CRS) contracts
Result: • Commercial Crew Program contracts with NASA
• Falcon 9 – 1st commercially successful reusable rocket Result: SpaceX became
• SpaceX changed cost structure of global space industry • A primary launch partner of NASA
• The first private company to transport astronauts to the
International Space Station (ISS)

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Decision Styles
Reed Hastings – Conceptual Style Howard Schultz – Behavioral Style

Invest in streaming vs. content production Find stable revenue for SpaceX
 Used wide data + creative intuition to pivot Netflix into  Frequently visited stores and talked directly with baristas to
content production. understand their feelings and challenges.
 Hosted open debates and internal discussions about strategy,  Provided health benefits and college tuition assistance to
reinforcing conceptual decision-making culture. employees (partners), prioritizing personal welfare and
development.

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5. Increasing Participation in Decision Making

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Managers do make some decisions as individuals, but decisions makers often are part of a group.
Indeed, major decisions in the business world rarely are made entirely by an individual.
Effective decision often depends on whether managers involve the right people in the right ways in
helping to solve problems.

THE VROOM-JAGO MODEL NEW DECISION APPROACHES FOR

TURBULENT TIMES
A model designed to help managers
gauge the amount of subordinate The ability to make fast, widely supported,
participation in decision making. high-quality decisions on a frequent basis is a
critical skill in today’s fast-moving organization.

LEADER PARTICIPATION STYLES START WITH BRAINSTORMING

DIAGNOSTIC QUESTIONS LEAN, DON’T PUNISH
SELECTING A DECISION STYLE KNOW WHEN TO BAIL
PRACTICE THE FIVE WHYS
ENGAGE IN RIGOROUS DEBATE.

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Leader participation styles

01 The model employs five levels of subordinate

participation in decision making, ranging from highly
autocratic (leader decides alone) to highly
democratic (leader delegates to group)

02 The Vroom-Yetton -
Diagnostic questions
Managers can analyze the
Jago Model
appreciate degree of participation
by answering 07 diagnostic
questions

The decision matrix

(proposed by Vroom-Jago, 2000)

03 The decision matrix allows a manager to

adopt a participation style by answering the
diagnostic questions in sequence.

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FIVE LEADER PARTICIPATION STYLES

Autocratic Leadership Consultative Leadership Group Leadership

Consult Group
Decide Managers shares the situation with Delegate
Manager makes individual subordinates and asks for Manager and
the decision alone. formation and evaluation. subordinates meet as a
Subordinates do not meet as a group to discuss the
group, and the manager alone situation, and the group
makes the decision. makes the decision.
AII CII

AI CI GII
Consult individual Facilitate
Managers asks for information Manager and subordinates
from subordinates but makes the meet as a group to discuss
decision alone. Subordinates the situation, but the manager
may or may not informed about makes the decision
what the situation is.

A = autocratic; C = consultative; G = group

Five decision styles, starting with the leader making the decision alone (decide) to delegating the problem and permitting the group to make decisions (delegate)

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Diagnostic Questions
1st: Decision significance
Decision significance: How significant is
this decision for the project or
organization?

2nd: Importance of commitment

How important is subordinate 5th: Group support for goals
commitment to carrying out the decision?
What is the degree of subordinate
support for the team’s or organization’s
3rd: Leader expertise objectives at stake in this decision?
What is the level of the leader’s
6th: Group expertise
expertise in relation to the problem?
What is the level of group members’
knowledge and expertise in relation to
4th: Likelihood of commitment the problem?
If the leader were to make the
decision alone; would 7th: Team competence
subordinates have high or low How skilled and committed are group
commitment to the decision? members to working together as a team
to solve problems?

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The decision matrix allows a manager to

adopt a participation style by answering the
diagnostic questions in sequence.

1st
You start at the left with a specific
decision problem in mid.

2nd
The column headings denote situation
factors that may or may not be present
in that problem.

3rd
You progress by selecting High or Low
(H or L) for each relevant situational
factor.

4th
Proceed down the funnel, judging only
THE DECISION MATRIX those situational factors for which a
judgment is required, until you reach
the recommended process.
The matrix operates like a funnel.

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NEW DECISION APPROACHES FOR TURBULENT TIMES

04
Engage in rigorous debate
Develop and exchange
proposals, discuss and debate
the various options until
arriving a common set of
understandings and
recommendation.

Learn, don’t punish

Take risks and
Learn from our mistakes
02 04
03 Practice the five why
Know when to bail Improve how people
Start with brainstorming think about the
Refuse to accept that problems and
Use a face-to-face
interactive group to 01 the solution is wrong
(escalating
generate alternatives
for solving them
spontaneously commitment)
suggest a wide rage of
alternatives for
decision making

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Diagnostic Questions
1st: Decision significance
Decision significance: How significant is
this decision for the project or
organization?

2nd: Importance of commitment

How important is subordinate 5th: Group support for goals
commitment to carrying out the decision?
What is the degree of subordinate
support for the team’s or organization’s
3rd: Leader expertise objectives at stake in this decision?
What is the level of the leader’s
6th: Group expertise
expertise in relation to the problem?
What is the level of group members’
knowledge and expertise in relation to
4th: Likelihood of commitment the problem?
If the leader were to make the
decision alone; would 7th: Team competence
subordinates have high or low How skilled and committed are group
commitment to the decision? members to working together as a team
to solve problems?

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Group Work 1
Describe a failure in judgment and decision-making
of a business or your choice.
1. Describe the company (0.5p).
2. What is the decision in this situation? (0.5p)
3. Why is it wrong? Due to what factor(s)? (4)
4. Suggest way(s) to fix the decision (2p).
Appearance: 1p
Feedback for other group (2p)

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Thank You

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