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Questions and Answers
What is a primary criticism of the 'ringi' system in decision making?
What is a primary criticism of the 'ringi' system in decision making?
What does the optimization model in rational decision making assume?
What does the optimization model in rational decision making assume?
What concept refers to the limitations in decision makers' ability to gather and process information?
What concept refers to the limitations in decision makers' ability to gather and process information?
Which model proposes that decision makers settle for a satisfactory solution rather than the optimal one?
Which model proposes that decision makers settle for a satisfactory solution rather than the optimal one?
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Which of the following is NOT a step assumed by the optimization model in decision making?
Which of the following is NOT a step assumed by the optimization model in decision making?
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What does the conflict model of decision making describe as a style of coping with decision-making stress?
What does the conflict model of decision making describe as a style of coping with decision-making stress?
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Which of the following best describes heuristics used in decision-making?
Which of the following best describes heuristics used in decision-making?
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Which heuristic is illustrated by judging the likelihood of an event based on how easily examples come to mind?
Which heuristic is illustrated by judging the likelihood of an event based on how easily examples come to mind?
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In the context of decision-making, what does 'complacency' refer to?
In the context of decision-making, what does 'complacency' refer to?
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How does cultural variation affect the use of heuristics in decision-making?
How does cultural variation affect the use of heuristics in decision-making?
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What is the primary focus of the prescriptive approach in decision making?
What is the primary focus of the prescriptive approach in decision making?
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Which step comes directly after 'Weight the criteria' in the rational decision-making process?
Which step comes directly after 'Weight the criteria' in the rational decision-making process?
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What factor influences when to identify the problem in rational decision-making across cultures?
What factor influences when to identify the problem in rational decision-making across cultures?
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Which criterion is commonly prioritized by South Korean managers when considering an acquisition target?
Which criterion is commonly prioritized by South Korean managers when considering an acquisition target?
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What does the 'ringi' system in Japan promote in decision-making?
What does the 'ringi' system in Japan promote in decision-making?
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What aspect reflects a cultural difference in the rational decision-making process?
What aspect reflects a cultural difference in the rational decision-making process?
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Which attribute is least likely to be a focus for USA managers when assessing acquisition targets?
Which attribute is least likely to be a focus for USA managers when assessing acquisition targets?
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How do cultural differences impact the identification of weighing criteria in decision making?
How do cultural differences impact the identification of weighing criteria in decision making?
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What does the availability heuristic influence in managerial judgments?
What does the availability heuristic influence in managerial judgments?
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How do cultural differences influence the availability heuristic?
How do cultural differences influence the availability heuristic?
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Which statement best describes the representativeness heuristic?
Which statement best describes the representativeness heuristic?
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What misconception is often associated with the representativeness heuristic?
What misconception is often associated with the representativeness heuristic?
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What is the main characteristic of the anchoring and adjustment heuristic?
What is the main characteristic of the anchoring and adjustment heuristic?
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How do collectivist and individualistic cultures differ in terms of decision-making confidence?
How do collectivist and individualistic cultures differ in terms of decision-making confidence?
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What might individuals from individualistic cultures consider more than their collectivistic counterparts?
What might individuals from individualistic cultures consider more than their collectivistic counterparts?
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Which behavior is more commonly observed in collectivistic cultures regarding decision-making?
Which behavior is more commonly observed in collectivistic cultures regarding decision-making?
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Study Notes
Cross-Cultural Management - INBU 2201, Class 17
- The Manager as Decision Maker
- Rational decision making is typically divided into two approaches, prescriptive and descriptive.
- Prescriptive: This approach is based on assumptions about how decisions should be taken, assuming managers aim for an optimal choice between alternatives.
- Descriptive: This details how managers actually make decisions. Rational decision making is often seen as following the prescriptive approach.
- Steps in the rational decision process include defining the problem, identifying decision criteria, weighting criteria, generating alternatives, evaluating alternatives and selecting the optimal solution.
- Cultural differences affect decision-making optimization, including when a problem is identified (doing vs. being), the amount of information gathered before making decisions, and the weighting of criteria (short-term vs. long-term orientation). Also, who is making the decision (power distance and collectivism) influences outcomes.
Desirable Characteristics of an Acquisition Target
- USA Managers prioritize target's product demand, discounted cash flow, returns on investment, attractiveness of industry, and management talent.
- South Korean Managers value industry attractiveness, sales revenue, market structure, manufacturing capabilities, and research and development capabilities.
Ringi-sei Decision-Making Process in Japan
- The ringi system is a bottom-up decision-making process common in Japanese bureaucracy.
- Lower-level managers develop initial plans.
- These plans are then circulated upwards for approval by higher-ranking officials.
- The goal is a consensus and the process is considered democratic.
- However, there's criticism that the ringi system obscures responsibility for decisions.
Factors Affecting Rational Decision Making
- Cultural Constraints
- Cognitive Limits, including motivation biases.
- The optimization model (rational decision making).
Rational Decision Making
- The optimization model assumes decision-makers can accurately define problems, identify all relevant criteria, accurately weigh criteria, be aware of all alternatives, and assess them accurately.
- However, human judgment is bounded by limitations in acquiring and processing information. This leads to a satisficing model (seeking acceptable, rather than optimal, solutions).
Cultural Constraints on Rationality
- The conflict model of decision making recognizes various strategies used by decision-makers to cope with stress.
- Vigilance involves careful fact-gathering and consideration of alternatives.
- Complacency means ignoring or taking immediate action.
- Defensive avoidance includes passing the decision to others, delaying it, or downplaying its importance.
- Hypervigilance is making hasty, poorly considered decisions.
- Cultural influences, such as Japanese preference for vigilance, influence decision-making styles.
How International Managers Deviate From Rationality
- Heuristics are rules of thumb used to simplify complex decisions.
- They often involve focusing on one aspect while ignoring others, creating trade-offs like speed vs. quality.
- Three common heuristics include:
- Availability: Judging the probability of events based on ease of recall.
- Representativeness: Assessing likelihood based on stereotypes and similarity.
- Anchoring and adjustment: Relying too heavily on initial information.
- Cultural variations influence the use and impact of these heuristics.
Availability
- Availability is a mental shortcut where people make judgments about the probability of events based on how easily examples come to mind.
- An event easily imagined or evoking emotion is recalled more easily than vague or bland events.
- Cultural differences in life experiences can lead to systematically different availability heuristics.
Representativeness
- Managers' assessments of likelihood are influenced by how similar the event is to a mental representation or stereotype.
- Misconception of chance: probability is ignored in favour of representativeness heuristics.
- Collectivist vs. individualistic societies differ in how much they expect similar cause-effect relationships.
- Once a decision is made, people in collectivist cultures are more confident; individualistic cultures consider more potential outcomes.
- Escalation of commitment is more common in collectivist cultures.
Anchoring and Adjustment
- Anchoring and adjustment is where humans rely heavily on initial information (the anchor) when making decisions.
- Starting from an initial value, adjustments to reach a plausible outcome are often insufficient.
- Both the source of the anchor and the norms for adjustment can vary across cultures.
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Description
Explore the nuanced role of the manager as a decision maker in cross-cultural contexts. This quiz will cover the rational decision-making process, differentiating between prescriptive and descriptive approaches while highlighting how cultural factors influence decision optimization. Understand how cultural differences play a crucial role in shaping managerial decisions.
