| A | B |
|---|
| decision making process | a set of 8 steps; includes identifying a problem, selecting a solution, & evaluating the effectiveness of your choice |
| problem | a discrepancy between an existing & a desired state of affairs |
| decision criteria | factors that are relevant in a decision (factors the mgr thinks are important to making the decision) |
| alternatives | possible solutions to be weighed against the weighted criteria |
| decision implementation | putting a decision into action; includes conveying the decisions to the persons affected by it & getting their committment to it |
| rational | describes choices that are consistent & value-maximizing w/in specified constraints |
| certainty | implies that a mgr can make an accurate decision because the outcome of every alternative is known |
| risk | the probability that a particular outcome will result from a given decision |
| uncertainty | a condition in which mgrs do ot have full knowledge of the problem & cannot determine even a reasonable probability of alternative outcomes |
| rational decision making | assumes decisions are made based on all available info |
| satisfice | slecting a solution that is satisfactory & sufficient; just good enough |
| bounded rationality | behavior that is ratonal w/in the parameters of a simplified model that captures the essential features of a problem |
| heuristics (2 kinds) | judgmental short cuts |
| availability heuristic | the tendency for people to base their judgments on info that is readily available to them |
| representative heuristic | the tendency for people to base judgments of probability on things w/ which they are familiar |
| escalation of commitment | an increased committment to a previous decision despite negative info |
| done to demonstrate their initial decision was not wrong | escalation of commitment |
| well-structured problems | straightforward, familiar; easily defined problems |
| ill-structured problems | new problems in which info is ambiguous or incomplete |
| programmed decision | a repetitive decision that can be handled by a routine approach (procedures) |
| procedure | a series of interrelated sequential steps that can be used to respond to a well-structured problem |
| rule | an explicit statement that tells mgrs what they ought or ought not to do |
| policy | a general guide that establishes parameters for making decisions |
| nonprogrammed decisions | decisions that must be custom-made to solve unique & nonrecurring problems |
| decision making styles (4 kinds) | directive, analytic, conceptual, & behavioral |
| individuals differ in 2 ways | the way they think & tolerance for ambiguity |
| think | logical & rational vs creative & intuitive |
| logical & rational | process info in a sequential manner; high need for consistency & order |
| creative & intuitive | often see the bigger picture; can process more than one thought at a time |
| directive | low tolerance for ambiguity & a rational way of thinking; make fast decisions that focus on the short term |
| analytic | high tolerance for ambiguity combined w/ a rational way of thinking; prefer to have complete info before making a decision |
| conceptual | tends to be very broad in outlook & to look at many alternatives; focus on the long run & often look for creative solutions |
| behavioral | thinks intuitively but has low tolerance for uncertainty; open to suggestions, work well w/ others |
| group decisions | provide more complete info, more alternatives, increases acceptance of decisions |
| minority domination | dominates a group & has an undue influence on the final decision |
| groupthink | the w/holding by different group members of different views in order to appear to be in agreement |
| undermines critical thinking & harms the quality of a final decision | groupthink |
| minimizing groupthink | if group is cohesive, fosters open discussion, & has impartial leader who seeks input from all members |
| group size | 5 to 7 members are best |
| 3 ways of making grp decision making more creative | brainstorming, nominal group technique, & electronic meeting |
| brainstorming | an idea generating process that encourages alternatives while w/holding criticism |
| nominal group technique | group members are physically present but operate independently |
| electronic meeting | a nominal group technique where participants are linked by computer |
| advantages of electronic meetings | anonymity, honesty, & speed |
| disadvantages of electronic meetings | those who type better can outshine those who can't type; individuals don't get credit for ideas |
| decision making practices | vary considerably by country |
| ringsei | Japanese concensus forming group decisions |
