General Management

Module

Dr. Fadia Fadel

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 Today’s Schedule
From To
09:00 - 11:00

11:00 - 11:15 15 Min. Break

11:15 - 01:15

01:15 - 01:30 15 Min. Break

01:30 - 3:30

03:30 Lunch

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 What is Negotiation?
• Negotiation is a basic means of getting what
you want from The Other Side (TOS).

• It is back-and-forth communication designed

to reach an agreement when you and the
other side have some interests that are
shared and others that are opposed.

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Negotiation is a process of

• Interaction by which two or more parties who

need to be jointly involved in an outcome
• They have different objectives presented as
different alternatives & positions
• They use argument and persuasion to resolve
their differences in order to achieve a mutually
acceptable solution.

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Competing
Win at any cost
(I Win – You Lose)
(I Win – You Win)

Avoiding Accommodating
Concerned for Relationships
(I Lose – You Lose)
(I Lose – You Win)

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 Competing Mode (I Win – You Lose)

• Primarily concerned with achieving their own goals

regardless of the impact on others
• Views negotiation as a win/lose rather than a problem
solving activity
• Often utilize manipulative tactics such as attacks, threats,
and other aggressive behavior to achieve their objectives
• Effective when long term relationship is not important and
short term task is important

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Pros & Cons for Competing Mode (I Win – You Lose)

Pros
• It can lead to automatic victory if you have more power
than the other person.
• Takes less time.
Cons
• May be costly & time consuming
• The other side can become resentful.

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 Avoiding Mode (I Lose – You Lose)

• Primarily concerned with avoiding intra-personal conflict

• Is useful when the stakes of a negotiated outcome are not
worth the investment of time or the potential for igniting
conflict
• Characterized by sidestepping, postponing, and ignoring the
issue or situation
• Effective when avoidance of the situation or issue does not
greatly affect the relationship and short term task is not
important to either party

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Pros & Cons for Avoiding
(I Lose – You Lose)

Pros
• You might keep a good relation with TOS
Cons
• Might lose a good business opportunities
• Short term strategy

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 Accommodating Mode
(I Lose – You Win)

• Primarily concerned with the relationship between the parties

• Easily gives the other side concessions in hopes of
strengthening the relationship, but often gives away too much
too soon
• Tend to neglect their own needs in favor of helping the other
side get what they want
• Effective when long term relationship is important and short
term task is not important

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Pros & Cons for
(I Lose – You Win)
Accommodating Mode
Pros
• When you recognize that the fight isn't worth it, you give
in and the conflict is over quickly.
• You could get people to owe you a favor
(accommodating you) in the future.
Cons
• You may lose a lot by giving up easily.
• Reputation of being a softy.
• You could lose power.

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 Compromising Mode (Split the difference)

• The style falling between accommodating and competing

• Useful when time is a concern or there is a strong relationship
between the parties
• Requires concessions from both sides to find agreement
• Does not focus on legitimate or fair standards for settlement
and instead utilizes “Meet in the middle,” or “Split the
difference” solutions

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Pros & Cons for (Split the difference)

Compromising Mode
Pros
• Both parties can gain something
Cons
• Difficult to start with

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 Collaborating Mode (I Win – You Win)

• Focuses on using problem solving methods to create value

and discover mutually satisfactory agreements
• Utilizes the creativity of both parties to find solutions to both
sides’ interests
• Tend to be assertive about their needs and cooperative with
the other side
• Effective when long term relationship is important and short
term task is important

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Pros & Cons for
Collaborating Mode (I Win – You Win)

Pros
• Both sides will win.
• Personal relationships can improve
Cons
• Collaborating can take a long time.
• If not properly applied; will be perceived
weak by people with competing style

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 (I Win – You Win)
Recommended situation in using
Collaborating Mode

• Long term goals are important

• Negotiation within the organization
• The two sides have common ground
• TOS seems to appreciate collaborating strategy
not willing for competing strategy

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Course Outline:
Decision Making:

• Systematic Approach to Decision Making Process

• Types of decisions
• Decision-Making Styles
• Decision Making errors and bias

Strategic Thinking:
• Introduction to strategic thinking
• Strategic vs. operational thinking
• Strategic thinking model
• Describing a strategic thinker
• The relation between Analysis & Creativity in Strategic Thinking

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Managers as
Decision
Makers

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Decision-making involves the selection of a
course of action from among two or more
possible alternatives in order to arrive at a
solution for a given problem
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 The Decision-Making Process

• Managers at all levels and in all areas of organizations make

decisions.

• Most decision making is routine, every day of the year you make a
decision about your activities.

For instance:
• Top level managers make decisions about their organization’s
goals, where to locate manufacturing facilities, or what new markets
to move into.

• Middle and Firet-Line managers make decisions about production

schedules, product quality problem, pay raises, and employee
discipline.

• Making decisions isn’t something that just managers do, but our
focus is on how managers make decisions

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 The Decision-Making Steps
Step 1• Identify a Problem

Step 2 Identifying Decision Criteria

Step 3 Allocating Weights to the Criteria

Step 4 Developing Alternatives

Step 5 Analyzing Alternatives

Step 6 Selecting an Alternative

Step 7 Implementing the Alternative

Step 8 Evaluating Decision Effectiveness

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Problem : an obstacle that makes it difficult to achieve a
desired goal or purpose.

Example - Rashad is a sales manager whose reps need new

laptops because their old ones are outdated and
inadequate for doing their job. it’s not economical to add
memory to the old computers and it’s the company’s policy
to purchase, not lease.
- Rashad has a problem: a disparity between the sales reps’
current computers (existing condition) and their need to
have more efficient ones (desired condition). Rashad has a
decision to make.
- Every decision starts with a problem.
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• Decision criteria are factors that are important
(relevant) to resolving the problem,

• Every decision maker has criteria guiding his or his

decisions even if they’re not explicitly stated.

• In our Example – Rashad decides that memory and

storage capabilities, display quality, battery life,
warranty, and carrying weight are the relevant criteria in
his decision.

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• The decision maker must weight the items in order to
give them the correct priority in the decision.
• A simple way is to give the most important criterion a
weight of 10 and then assign weights to the rest using
that standard

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The decision maker requires to list viable alternatives
that could resolved the problem. The alternative are
only listed, not evaluated. In our Example - Rashad,
identifies eight laptops as possible choices.

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 Appraising each alternative’s strengths and weaknesses
 Decision maker must evaluate each alternative, by using the criteria
established in step (2).

When you multiply each alternative by the assigned weight, you get
the weighted alternatives. The total score for each alternative, then, is
the sum of its weighted criteria.

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The alternative with the highest total weight is chosen.

In our example (Exhibit 6-4), Rashad would choose the DELL Inspiron
because it scored higher than all others alternatives (249 total).

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Putting the chosen alternative into action

Conveying the decision to and gaining commitment from those

who will carry out the alternative. We know that if the people
who must implement a decision participate in the process, they’re
more likely to support it than if you just tell them what to do.

Another thing managers may need to do during implementation is

re-assess the environment for any changes, especially if it’s a
long-term decision. Are the criteria, alternatives, and choice still the
best ones, or has the environment changed in such a way that we
need to re-evaluate?

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Evaluating the outcome or result of the decision to see if the
problem was resolved.

If the evaluation shows that the problem still exist, then the
manager needs to assess
- what went wrong?
- was the problem incorrectly defined?
- where errors made when evaluating alternatives?
- was the right alternative selected but poorly
implemented?
The answers might lead you to re-do an earlier step or might even
require starting the whole process over.

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How managers make decisions? three perspective on how
managers make decisions:
3 Perspectives of
Managers Making Decisions

Rational Rational Bounded Intuition

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 Managers Making Decisions
a) Rational Decision-Making - a type of decision
making in which choices that are logical and consistent
while maximizing value.

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Steps in Rational Decision Making

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 Making Decisions: Bounded Rationality
b) Bounded Rationality

- Decision making that’s rational, but limited (bounded) by an individual’s

ability to process information. Because they can’t possibly analyze all
information on all alternatives therefore:
- Managers satisfice, rather than maximize. :That is, they accept
solutions that are “good enough” .They’re being rational within the limits
(bounds) of their ability to process information.

Also Managers decision making influence by the organization’s culture,

internal politics, power considerations, and a phenomenon called

Escalation of commitment: an increased commitment to a previous

decision despite evidence that it may have been a poor (wrong) decision.

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 Making Decisions: The Role of Intuition
c) Intuitive decision- making
Making decisions on the basis of experience, feelings, and
accumulated judgment.

Intuitive decision making can complement both rational and bounded

rational decision making, how?

- Managers who has had experience with a similar type of problem or

situation often can act quickly with what appears to be limited information
and can achieve higher decision making performance, because of that
past experience.

- Managers should ignore emotions when make decisions may not be the
best advice.

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What Is Intuition?

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 Types of Decisions: Structured Problems and
Programmed Decisions
Structured Problems - straightforward, familiar, and easily defined
problems.. Example might include:

- when a customer returns a purchase to a store.

- When a supplier is late with an important delivery.
because they’re straightforward, familiar, and easily defined, Because it’s not
an unusual occurrence, there’s probably some standardized routine for
handling it becomes:

Programmed decision – a repetitive decision that can be handled by a

routine approach, Because the problem is structured, the manager doesn’t
have to go the trouble and expense of going through an involved decision
making process.

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 Types of Decisions: Unstructured Problems
and Non-programmed Decisions
Not all problems managers face can be solved using programmed
decisions, some involve:

Unstructured Problems : a problem that is new or unusual and for which

information is ambiguous or incomplete.

When the problem are unstructured, managers should rely on non-

programmed decisions in order to develop unique solutions

Non-programmed decisions : a unique and nonrecurring decision that

requires and involve a custom made solutions.
Exhibit 6-7 describe the differences between programmed and non-
programmed decisions.

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Exhibit 6-7
Programmed Versus
Non-programmed Decisions

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 Decision-Making Conditions
When making decisions, managers may face three
different conditions: certainty, risk, and uncertainty.

• Certainty : a situation in which a manager can make

accurate decisions because all outcomes are known.

• Risk - a situation in which the decision maker is able to

estimate the likelihood of certain outcomes managers
have historical data from past personal experiences or
secondary information that lets them assign probabilities
to different alternatives.

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 Decision-Making Conditions
• Uncertainty - a situation in which a decision maker has
neither certainty nor reasonable probability estimates
available. the choice of alternative is influenced by the
limited amount of available information and by the
psychological orientation of the decision maker.

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 12 Common Decision-Making Biases
1. Overconfidence Bias : when decision maker tend to think they
know more than they do. Unrealistically positive views of oneself
and one’s performance.

2. Immediate Gratification Bias : describe decision maker who

tend to want immediate rewards and to avoid immediate costs.
3. Anchoring Effect - describe the situation when decision makers
fixating on initial information and ignoring subsequent information.
4. Selective Perception Bias - when decision makers selecting,
organizing and interpreting events based on the decision maker’s
biased perceptions.

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 12 Common Decision-Making Biases
5. Confirmation Bias - decision makers tend value information
that confirms their pre-conceived views and are critical and
skeptical of information that is contradictory to their past choices.
6. Framing Bias - decision makers selecting and highlighting
certain aspects of a situation while ignoring other aspects.
7. Availability Bias - causes decision makers to tend to remember
events that are the most recent and vivid in their memory (losing
decision-making objectivity by focusing on the most recent events).
8. Representation Bias - when decision makers assess the
likelihood of an events based on how closely it resembles other
events or sets of events. (drawing analogies and seeing identical
situations when none exist).

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 12 Common Decision-Making Biases
9. Randomness Bias - occurs when decision makers creating
unfounded meaning out of random events.

10. Sunk Costs Errors - decision makers forget that current

choices can’t correct the past. (forgetting that current actions
cannot influence past events and relate only to future
consequences).

11. Self-Serving Bias - occurs when decision makers taking quick

credit for successes and blaming outside factors for failures.

12. Hindsight Bias - when decision makers tend to falsely believe

after that outcome is actually known. (mistakenly believing that an
event could have been predicted once the actual outcome is
known (after-the-fact).
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12 Common Decision-Making Biases

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 Guidelines for Making Effective Decisions:

• Understand cultural differences

• Create standards for good decision making
• Know when it’s time to call it quits
• Use an effective decision making process
• Build an organization that can spot the unexpected and
quickly adapt to the changed environment

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5 Habits of Highly Reliable Organizations
1. They are not tricked by their success, alert to the
smallest deviations and react quickly to anything that
doesn’t fit with their expectations

2. Defer to the expert on the front line workers (interact

day to day with customers or production)

3. Let unexpected circumstances provide the solution

4. Embrace complexity

5. Anticipate but also recognize their limits

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 Reasons Why People Have Difficulty in
Making Decisions

• Fear of failing
• Fear of success/believing that others will always
expect perfection following a success
• Unable to set priorities/don’t know what to do first
• Not knowing where to get the information needed
to help with the decision
• Hoping someone else will decide

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 Reasons Why People Have Difficulty in
Making Decisions

• Having little experience in making decisions and

feeling overwhelmed
• Not being willing to sacrifice immediate comfort for
the long-term gain
• Fear that others will disapprove of the decision
• Believing decisions won’t really matter, other
circumstances will ultimately dictate the outcome

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 Decision Quality
1. Know your biases

2. Do you do enough analysis?

3. Are you hesitant to make a decision?

4. Sleep on it

5. Use others to help

6. Study decision makers

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Strategic Ability Framework

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Strategic Ability Framework

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Barriers to Strategic
Thinking

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 How to avoid the Four I’s
• External market focus
• Customer focus
• Keep the “Main Things” the main things
• Focus on knowledge sharing and learning
• Teamwork is mandatory –not optional
• Passion and commitment at all levels
• Celebrate change

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Strategic Thinking
‘Why?”

Operational Thinking
‘How?”

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 Strategic Thinking Vs. Operational Thinking
• Strategic thinking and operational thinking may seem like two
separate planes of existence. In reality, though, they are more like
two sides of the same coin.
• As leaders, we like to think of strategic thinking as the overarching
thought process that guides an organization in its key decisions and
general corporate direction, while operational thinking focuses on
the tasks that are completed at “ground level.” And it’s those tasks
completed day-to-day that ensure strategic goals are being met. In
order to function effectively, organizations need both kinds of
thinking
• Most leaders would agree that without strategic thinking, there would
be no basis on which to guide operations. But you can make the
opposite case just as convincingly: without operational thinking,
there would be no way to put those innovative strategies into action.
And there is a time for both kinds of thinking.
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