Decision Making Concepts

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Questions and Answers

Which model suggests that managers must operate with intuition and judgment due to the limits of rationality?

Bounded rationality model (correct)

Political model

Escalation of commitment model

Rational model

What characteristic of groupthink refers to the group's belief in their own superiority?

Pressures toward uniformity

Goal displacement

Overestimation of the group (correct)

Close-mindedness

What is a primary disadvantage of group decision-making?

Greater pool of information

Increased intellectual stimulation

Longer decision-making process (correct)

Varied perspectives and approaches

In which model do self-justification and preservation play a significant role in continuing a failing course of action?

Escalation of commitment model Signup and view all the answers

Which type of power is NOT a source of influence in the political model?

Referent power Signup and view all the answers

Which technique can improve group decision-making by allowing individuals to contribute ideas anonymously?

Delphi technique Signup and view all the answers

Which of the following is NOT a characteristic of groupthink?

Encouragement of dissent Signup and view all the answers

Which advantage of group decision-making can lead to a potential disadvantage due to conflicting priorities?

Satisficing behavior Signup and view all the answers

What distinguishes programmed decisions from non-programmed decisions?

Programmed decisions are based on structured processes while non-programmed decisions are poorly structured. Signup and view all the answers

What is the first step in the decision-making process?

Problem identification and diagnosis Signup and view all the answers

Which of the following best describes 'discount the future' as a psychological barrier?

Underestimating the impact of future consequences due to focusing on short-term gains. Signup and view all the answers

In what decision-making condition do managers possess complete knowledge of outcomes?

Certainly Signup and view all the answers

Which approach to decision making is characterized by gathering facts and assessing evidence?

Rationality Signup and view all the answers

Which of the following is not a step in the decision-making process?

Assuming control of the outcome Signup and view all the answers

What is a key characteristic of non-programmed decisions?

They require a judgement based on insufficient information. Signup and view all the answers

What does time pressure represent in the decision-making context?

A barrier that can lead to hasty and potentially flawed decisions. Signup and view all the answers

Study Notes

Decision Making

Decision making involves selecting the best course of action from various options
Two types of decisions: programmed (routine, well-structured) and non-programmed (new, unstructured)
Decision making process (6 steps): problem identification, alternative solutions, evaluating alternatives, choosing an alternative, implementing, and evaluating.

Decision Conditions

Certainty, Risk, Uncertainty
Decision making conditions are the level of information available regarding alternative options and their associated outcomes.

Barriers to Good Decisions

Illusion of control (thinking you have more influence than you do)
Discounting the future (prioritizing immediate over long-term outcomes)
Time pressures

Rational Model

Assumes decision-makers are perfectly rational, objective, & possess complete information.
Aims to select the optimal alternative to achieve organizational goals.

Bounded Rationality Model

Recognizes that perfect rationality is unrealistic.
Managers make decisions based on limited information and cognitive limitations.
Aims to achieve satisfactory solutions instead of optimal ones.

Political Model

Acknowledges the impact of power dynamics and politics on decision making.
Factors like influence, negotiation, and competing interests affect outcomes.

Escalation of Commitment

The tendency for people to persist with failing courses of action, even when it's not the best choice.

Group vs Individual Decision Making

Groups can offer diverse perspectives and information, potentially leading to better decisions.
Groups can also suffer from biases (e.g., groupthink) that discourage creative solutions.

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Description

Explore the fundamentals of decision making, including the types of decisions, the decision-making process, and the various conditions affecting choices. Learn about barriers to effective decision making and the models used to analyze decisions in organizational settings.