Decision-Making Perspectives in Management

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Questions and Answers

What is the primary characteristic of a rational decision maker?

Being fully objective and logical (correct)

Considering human emotions in decision making

Making decisions based on gut feelings

Relying on past experiences

Which decision-making approach involves managers making decisions that satisfice rather than maximize?

Evidence-based management

Bounded rationality (correct)

Intuitive decision making

Rationality

What type of decision is characterized by a series of sequential steps used to respond to structured problems?

Rule

Procedure (correct)

Policy

Intuitive decision

Under which decision-making condition can a manager accurately predict outcomes for every alternative?

Certainty Signup and view all the answers

In which situation is the decision maker unable to estimate the likelihood of outcomes?

Uncertainty Signup and view all the answers

What defines a programmed decision?

Routine decisions based on structured approaches Signup and view all the answers

Which type of problem is typically unstructured and may require significant judgment?

Nonprogrammed decision Signup and view all the answers

What is the focus of evidence-based management?

Using the best available evidence for management practices Signup and view all the answers

Which training method involves employees learning by performing tasks?

On-the-job-Employees Signup and view all the answers

What type of training does Ruth's Chris Steak House utilize to convey job-related information?

Simple 4x8-inch cards Signup and view all the answers

Which of the following is considered a specific type of training?

Creativity Signup and view all the answers

What is a common advantage of using mentoring and coaching as a training method?

Guidance from experienced workers Signup and view all the answers

Which training method primarily uses role playing and simulations?

Experimental Exercise Signup and view all the answers

What is the purpose of a performance management system?

To establish performance standards Signup and view all the answers

Which of the following is NOT a method of technology-based training?

On-the-job training Signup and view all the answers

What kind of training focuses on diversity and cultural awareness?

Specific training Signup and view all the answers

What are the two main decision-making styles identified?

Linear and Nonlinear Signup and view all the answers

Which decision-making error involves placing too much confidence in one's own abilities or knowledge?

Overconfidence Bias Signup and view all the answers

In the decision-making process, what is the last step after implementing an alternative?

Evaluating its effectiveness Signup and view all the answers

Which type of decision-making condition involves a clear understanding of all possible outcomes?

Certainty Signup and view all the answers

What does 'satisficing' refer to in the context of decision-making?

Choosing the first acceptable option Signup and view all the answers

What is a key factor in effective decision-making in today's fast-paced business environment?

Understanding cultural differences Signup and view all the answers

Which of the following biases occurs when individuals focus only on information that supports their pre-existing beliefs?

Confirmation Bias Signup and view all the answers

In decision-making, what are well-structured problems often categorized as?

Programmed Decisions Signup and view all the answers

What is a primary focus of Management by Objectives (MBO)?

Goal accomplishment Signup and view all the answers

Which of the following is a potential long-term consequence of downsizing?

Loss of institutional knowledge Signup and view all the answers

What is a characteristic of 360-degree appraisal?

Involves feedback from multiple sources Signup and view all the answers

Which factor might lead an organization to consider downsizing?

Aggressive growth Signup and view all the answers

Skill-based pay rewards employees based on what criteria?

Demonstrated job skills Signup and view all the answers

What is a recommended tip for managing downsizing effectively?

Reassign roles based on talents Signup and view all the answers

Which of the following describes variable pay?

Compensation linked to individual performance Signup and view all the answers

Why did the bureau of labor statistics not track permanent layoffs before the 1980s?

Permanent layoffs were infrequent Signup and view all the answers

What is the primary goal of employee training in an organization?

To minimize skills gaps Signup and view all the answers

Which decruitment option involves permanently terminating employees from an organization?

Firing Signup and view all the answers

Which of the following is NOT a type of selection tool used in the hiring process?

Personal motivation assessments Signup and view all the answers

What type of orientation focuses specifically on the team and job responsibilities of the new employee?

Work unit orientation Signup and view all the answers

What is a critical factor in the selection process when determining candidate success?

Alignment with the organization's culture and goals Signup and view all the answers

How does Miami International Airport incentivize participation in its training program?

By linking training to ID badge renewal Signup and view all the answers

Which method would be used to assess the validity of a selection device?

Proven relationship to relevant criteria Signup and view all the answers

Which of the following is a reason why employee accidents might occur according to the content?

Poor maintenance of planes Signup and view all the answers

Study Notes

Evaluating Decision Effectiveness

Assess the outcome of decisions to determine if the initial problem was resolved.

Four Perspectives on Decision Making

Rationality: Objective and logical decisions to maximize organizational goals.
Bounded Rationality: Decisions made in a rational manner but limited by information processing capabilities, leading to satisficing instead of maximizing.
Role of Intuition: Decisions based on experience and feelings rather than solely empirical data.
Evidence-Based Management (EBMgt): Utilizes the best available evidence to improve management practices systematically.

Types of Problems and Decisions

Structured Problems: Clear, familiar situations easily defined.
Programmed Decisions: Routine, repetitive decisions handled through established protocols including:
- Procedures: Sequential steps for addressing structured problems.
- Rules: Explicit guidelines on what actions are permissible.
- Policies: Framework for guiding decision-making.

Decision Types Characteristics

Nonprogrammed Decisions: Unstructured, novelty-oriented, and rely on creative judgment.
Programmed Decisions: Structured, routine, and short-term with clear information and procedures.

Decision-Making Conditions

Certainty: All outcomes of alternatives are known.
Risk: Decision-maker can estimate the likelihood of outcomes.
Uncertainty: Lack of certainty or probability estimates.

Decision Making Styles

Distinctions between linear and nonlinear thinking styles inform how different managers approach decision-making.
Example: William D. Perez at Nike relied on data while Phil Knight favored intuition.

Decision Making Biases and Errors

Common biases include:
- Overconfidence
- Immediate gratification
- Anchoring effect
- Selective perception
- Confirmation bias
- Framing bias
- Availability bias
- Representation bias
- Randomness bias
- Sunk costs error
- Self-serving bias
- Hindsight bias

Decision Making Process

Involves identifying options, evaluating them, selecting the best alternative, implementing the decision, and assessing its effectiveness for future improvement.
Influencing factors include decision-making approaches, problem types, conditions, and styles.

Effective Decision Making in Today's World

Managers should:
- Understand cultural differences.
- Know when to pivot from a decision.
- Utilize effective decision-making processes.
- Foster adaptive organizational structures.

Foundation of Planning

Planning involves setting goals, strategies for achievement, and coordinating activities within an organization.

Recruitment and Selection

Recruitment methods include:
- Internet
- Employee referrals
- Company websites
- Professional recruiting organizations

Decruitment

Approaches to control labor supply through decruitment include:
- Firing
- Layoffs
- Early retirements
- Job sharing
- Transfers

Selection Process

Selection involves screening candidates to predict future success.
Valid tools show a proven relationship to job performance; reliable tools yield consistent measurements.

Employee Training and Skills Development

Orientation introduces new hires to their roles, covering work units and organizational culture.
Training types include general skill development and specific job-related training.
Effective training methods encompass on-the-job learning, mentoring, job rotation, and technology-based resources.

Employee Performance Management

Performance management systems set standards to evaluate employee effectiveness.
Methods include:
- Management By Objectives (MBO)
- 360-degree feedback appraisals
- Skill-based pay and variable pay systems.

Managing Downsizing

Downsizing is a strategic approach to improve profitability through workforce reduction.
Common reasons for downsizing include economic pressures, market share declines, and operational failures.
Long-term consequences may include loss of institutional knowledge, decreased morale, and increased rehiring costs.
Effective communication and support for remaining employees are crucial during downsizing.

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Description

This quiz evaluates four key perspectives on how managers make decisions, focusing on rationality and bounded rationality. You will assess the effectiveness of decision outcomes to understand how decisions can resolve problems in organizational contexts.