MG4031 week 6 lecture 2
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Questions and Answers

Which condition is not assumed in the concept of rationality?

  • Unlimited resources for decision-making (correct)
  • Complete objectivity in evaluating consequences
  • Perfect knowledge of the problem, goals, and alternatives
  • Well-structured decision-making procedures

What does bounded rationality primarily acknowledge about managerial decisions?

  • Ideal decision-making processes are always followed
  • Managers always strive to maximize outcomes
  • Managers have unlimited access to information
  • Decisions are often influenced by personal emotions and environment (correct)

Which type of power is derived from a manager’s position within the organizational hierarchy?

  • Reward power
  • Expert power
  • Referent power
  • Legitimate power (correct)

What is the primary focus of the political model of decision-making?

<p>Organizational politics and the impact of power dynamics (D)</p> Signup and view all the answers

In the context of decision-making, what does 'satisficing' mean?

<p>Settling for an option that is satisfactory rather than optimal (A)</p> Signup and view all the answers

Which of the following does not represent a type of power in organizational settings?

<p>Spiritual power (A)</p> Signup and view all the answers

Which of the following statements best describes the characteristics of the rational decision-making process?

<p>It assumes decision-makers have complete and perfect information. (C)</p> Signup and view all the answers

What impact does forming coalitions have on the decision-making process?

<p>It adds complexity due to varying ideas and values. (A)</p> Signup and view all the answers

What is a primary reason for escalation of commitment in decision-making?

<p>Need to confirm sunk costs (B)</p> Signup and view all the answers

Which of the following is NOT a disadvantage of group decision-making?

<p>Greater processing support (C)</p> Signup and view all the answers

What is meant by group displacement in group decision-making?

<p>Replacement of original goals with new ones (A)</p> Signup and view all the answers

The levelling effect in group decision-making results in which of the following?

<p>Equalization of individual opinions (D)</p> Signup and view all the answers

What can contribute to poor decision-making in cohesive groups?

<p>Desire for unanimous agreement (B)</p> Signup and view all the answers

Which of the following best describes the impact of confirmation bias on decision-making?

<p>Results in selective attention to supporting information (D)</p> Signup and view all the answers

How does group decision-making generally affect the amount of information processed?

<p>Allows a larger amount of information to be processed (C)</p> Signup and view all the answers

In the context of group decision-making, what is the main disadvantage of requiring compromise?

<p>May result in suboptimal decisions (B)</p> Signup and view all the answers

Which factor is NOT typically a reason for favoring individual decision making?

<p>The decision significantly impacts the entire group (A)</p> Signup and view all the answers

What is a potential drawback of the Delphi Group Technique?

<p>It requires direct interaction among experts (D)</p> Signup and view all the answers

Which statement accurately reflects a reason for utilizing group decision making?

<p>The problem requires a broad range of knowledge. (D)</p> Signup and view all the answers

Which method restricts verbal interaction during the decision-making process?

<p>Nominal Grouping (C)</p> Signup and view all the answers

Which factor is least likely to encourage individual decision making?

<p>The manager wants feedback on ideas (D)</p> Signup and view all the answers

In group decision making, what is primarily enhanced by brainstorming?

<p>Diverse idea generation (C)</p> Signup and view all the answers

What is a common characteristic associated with group decision making?

<p>Collective responsibility for the decision outcome (A)</p> Signup and view all the answers

Which of the following best describes the key goal of the Delphi Group Technique?

<p>Achieving consensus through anonymous responses (C)</p> Signup and view all the answers

Flashcards

Rational Decision Making

A logical process where managers gather info, evaluate options, and choose the best outcome

Bounded Rationality

Decision-making limited by mental capacity, emotions, and external factors; managers often settle for satisfactory options, not optimal ones.

Satisfice

To settle for an alternative that is good enough, rather than searching for the ideal option.

Political Model

Decision-making influenced by power dynamics and organizational politics; focuses on coalitions and negotiations.

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Legitimate Power

Power derived from a person's position in the organizational hierarchy.

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Reward Power

Power derived from the ability to give or withhold rewards.

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Expert Power

Power derived from specialized knowledge.

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Coalitions

Groups of individuals who combine their power to influence decisions.

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Escalation of Commitment

The tendency to continue investing in a failing course of action, even when it's clearly not working.

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Sunk Costs

Resources already invested in a project that cannot be recovered.

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Confirmation Bias

The tendency to seek out information that confirms existing beliefs, while ignoring or dismissing contradictory evidence.

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Group Decision Making

A process where multiple individuals collaborate to make a decision.

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Group Displacement

When new goals replace the original goals of a group, often due to the influence of dominant members.

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Levelling Effect

When individual opinions converge toward the average quality of group thinking.

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Groupthink

A mode of thinking where members of a cohesive group prioritize conformity and agreement over critical thinking and objective assessment.

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What are key disadvantages of group decision-making?

Group decision-making can result in longer decision-making processes, indecisiveness due to compromise, group displacement, and groupthink.

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When to use individual decision-making?

Individual decision-making is best when there's little time, the decision is unimportant to many stakeholders, the manager possesses all relevant data, or group dominance is likely to occur.

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When to use group decision-making?

Group decision-making is beneficial when creativity is crucial, data is scattered among members, buy-in from the team is essential, the problem is complex, or risk-taking is involved.

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Brainstorming

A technique for generating creative ideas where individuals in a relaxed setting freely share their suggestions, solely focused on idea generation.

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Delphi Group Technique

A method involving a panel of experts who contribute anonymously through questionnaires to reach a consensus, minimizing group pressure and promoting clarity.

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Nominal Grouping

A structured approach where members individually generate ideas, then present them for discussion and building upon, limiting spontaneous interaction and fostering a more controlled environment.

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Individual vs. Group Decision-Making: What are the factors to consider?

Factors like time constraints, importance of the decision, data accessibility, potential group dominance, and the need for creativity or buy-in play a role in choosing between individual and group decision-making.

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What are the benefits of using the Delphi Group Technique?

The Delphi Group Technique is useful when experts are geographically dispersed, anonymity is crucial, or communication difficulties exist, minimizing social pressures and fostering objective perspectives.

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What are the benefits of using Nominal Grouping?

Nominal Grouping is especially beneficial when restricting verbal interaction is desired, promoting a structured approach to generating and evaluating ideas.

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Study Notes

Decision Making Approaches

  • Rationality: A perfectly logical process where managers gather information, evaluate evidence, consider alternatives, and choose the best outcome. Assumes perfect knowledge of the problem, goals, alternatives, consequences, and procedures.

  • Bounded Rationality (Herbet Simon): Decisions are limited by mental capacity, emotions, and uncontrollable environmental factors. Managers instead satisfice (settle for a satisfactory alternative) rather than optimize. Managers often don't have complete information and may have trouble processing it.

  • Political Model: Organizational politics significantly influences decision-making. Power is crucial, with five main types:

    • Legitimate power: Position in the hierarchy
    • Reward power: Ability to withhold rewards
    • Expert power: Knowledge and information
    • Referent power: Charisma
    • Coercive power: Emotional/physical threats
    • Coalitions are formed, each with conflicting ideas and values, complicating decision processes.

Escalation of Commitment

  • Persistence in failing courses of action. Motivations include self-justification, sunk cost recovery, and confirmation bias.

Group vs. Individual Decision-Making

  • Advantages of Group Decisions: Increased perspectives and approaches, more alternatives considered, better understanding of the decision, increased involvement (sense of ownership) and lower communication needs.
  • Disadvantages of Group Decisions: Decisions take longer, may be less decisive, individuals can dominate discussions, the quality of the decision may not reflect the best solution

Improving Group Decision-Making

  • Brainstorming: A creative process for generating ideas in a relaxed setting.
  • Delphi Technique: A questionnaire-based process involving experts who aren't in direct contact, leading to a consensus.
  • Nominal Grouping: A structured process where individuals generate ideas independently, then ranks solutions collaboratively.

Factors Favouring Individual vs Group Decision-Making (in page 2)

  • Individual Decision Making: Little time, decision unimportant to many, manager has all data needed, some members likely to dominate.
  • Group Decision Making: Creativity is needed, data is held by many, acceptance of the solution by the group is important.

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Related Documents

MG4031 Week 06 Lecture 02 Decision Making Approaches PDF

Description

Explore the various approaches to decision making in management, including Rationality, Bounded Rationality, and the Political Model. Understand how these methods influence managerial choices and outcomes, while considering the limitations and political dynamics at play. Test your knowledge on the key concepts and theories behind effective decision making.

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