Decision-Making Process and Steps

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Questions and Answers

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

Developing alternatives

Implementing the selected alternative

Evaluating the decision's effectiveness

Identifying a problem and decision criteria (correct)

Which alternative demonstrates the highest battery life according to the given criteria?

HP ProBook

Toshiba Satellite

Lenovo IdeaPad

Apple Macbook (correct)

In making a decision, what does allocating weights to the criteria help determine?

The financial cost of implementation

The effectiveness of the decision

The best selling alternative alone

The importance of each criterion in evaluating alternatives (correct)

When evaluating the alternatives for new computers, which alternative appears to offer the best overall value according to the example provided?

Dell Inspiron Signup and view all the answers

Which of the following is NOT a criterion listed for evaluating the new computers?

Price Signup and view all the answers

What is the purpose of the analysis of alternatives in the decision-making process?

To appraise the strengths and weaknesses of each alternative Signup and view all the answers

Which step follows the selection of an alternative in decision-making?

Implementation of the alternative Signup and view all the answers

What is involved during the development of alternatives?

Identifying and listing viable options Signup and view all the answers

Why is it important to communicate the decision after selecting an alternative?

To gain commitment for implementation Signup and view all the answers

What does selecting an alternative depend on in the decision-making process?

The total weight of each alternative's benefits and drawbacks Signup and view all the answers

What defines a problem in the context of organizational management?

A discrepancy between an existing and desired state of affairs Signup and view all the answers

Which of the following is NOT a characteristic that makes a situation a problem for a manager?

Lack of communication with team members Signup and view all the answers

What aspect should be considered in decision criteria for problem resolution?

Outcomes that are desired Signup and view all the answers

How should decision criteria be prioritized in organizational decision-making?

By assigning a weight to each item based on its importance Signup and view all the answers

Which of the following factors is NOT identified as decision criteria for resolving problems?

Employee performance metrics Signup and view all the answers

What should be evaluated to determine the effectiveness of a decision?

The outcomes resulting from the chosen alternatives Signup and view all the answers

Which assumption about decision-makers indicates a flaw in the rational decision-making process?

They will select an alternative that maximizes personal outcomes Signup and view all the answers

In the context of effective decision-making, which aspect is NOT a concern if the problem remains unresolved?

Defining the problem with precision Signup and view all the answers

What characterizes a rational decision according to traditional models?

Maximizes outcomes under specified constraints Signup and view all the answers

Which of the following is essential for a manager to be considered a rational decision-maker?

They have a clearly defined problem and viable alternatives Signup and view all the answers

What does bounded rationality imply about decision makers?

They are limited in their ability to process information and often satisfice. Signup and view all the answers

What is escalation of commitment in decision making?

Increasing a commitment to a previous decision despite evidence to the contrary. Signup and view all the answers

What role does intuition play in decision making for managers?

It permits decisions based on accumulated experience and feelings. Signup and view all the answers

Which statement best describes 'satisficing' behavior in decision making?

Accepting the first acceptable solution instead of seeking the optimal one. Signup and view all the answers

What factor is likely to influence a manager’s decision making the most?

The manager's previous experiences and instincts. Signup and view all the answers

Study Notes

Decision-Making

A choice made from two or more alternatives
Involves identifying a problem, decision criteria, allocating weights to criteria, developing, analyzing and selecting an alternative, implementing the selected alternative and evaluating effectiveness
Decision needs are driven by problems that need resolving

Choosing New Computers: Example

Example problem: sales reps need new computers
Example decision criteria: Memory and storage, display quality, battery life, warranty, carrying weight
Example decision weights: allocate numerical values to each criteria based on their importance to the problem

Steps in Decision Making

Development of Alternatives: identify viable alternatives that can resolve the problem, list them without evaluating them
Analysis of Alternatives: understand the strengths and weaknesses of each alternative, asses how well each alternative addresses the issues raised in step 2 and 3
Selection of an Alternative: choose the best option that solves the problem, the one with the highest total weight
Implementation of the Alternative: put the chosen alternative into action, communicate the decision and gain commitment from those involved in its execution

Bounded Rationality

Decision makers are limited in their ability to process and understand information
Decision makers may not have knowledge of all alternatives, so they will not analyze all alternatives
Decision makers will satisfice - choose the first alternative that satisfactorily solves the problem rather than maximizing the outcome of their decision by considering all alternatives and choosing the best

Escalation of Commitment

Keeping or increasing a commitment to a previous decision despite clear evidence it was the wrong one

Influences on Decision Making

Role of Intuition: using experience, feelings, and accumulated judgment to make decisions

Evaluation of Decision Effectiveness

The soundness of a decision is judged by its outcomes
If a problem was not resolved, figure out why

Rationality in Decision Making

Managers make consistent, value-maximizing choices within specified constraints
Decision makers are assumed to be perfectly rational, fully objective, and logical
Decision makers are assumed to have a clear and specific goal and will select the alternative that maximizes outcomes in the organization's interests rather than in their personal interests

Identification of a Problem

A discrepancy between an existing and desired state of affairs
A problem becomes a problem when a manager becomes aware of it
There is pressure to solve the problem
The manager must have the authority, information, or resources needed to solve the problem

Identification of Decision Criteria

Factors that are important to resolving the problem
Costs that will be incurred (investments required)
Risks likely to be encountered (chance of failure)
Outcomes that are desired (growth of the firm)

Allocation of Weights to Criteria

Decision criteria are not of equal importance
Weighting each decision criteria places them in the correct priority order of importance in the decision-making process

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Description

This quiz explores the critical components of the decision-making process, including identifying problems, setting criteria, and evaluating alternatives. You will learn how to assess and select the best option to address specific needs, illustrated with a practical example involving new computer choices for sales representatives.