Podcast
Questions and Answers
What is the main characteristic of programmed decisions?
What is the main characteristic of programmed decisions?
Which decision-making condition describes situations where managers know their goals but lack complete information about alternatives?
Which decision-making condition describes situations where managers know their goals but lack complete information about alternatives?
What should be done if the decision criteria are not equally important?
What should be done if the decision criteria are not equally important?
What type of decision-making error involves focusing on past expenditures instead of future outcomes?
What type of decision-making error involves focusing on past expenditures instead of future outcomes?
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In which type of situation do managers face ambiguity in their decision-making process?
In which type of situation do managers face ambiguity in their decision-making process?
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Which of the following best describes nonprogrammed decisions?
Which of the following best describes nonprogrammed decisions?
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How can organizations with high design maturity benefit in decision-making?
How can organizations with high design maturity benefit in decision-making?
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What type of decision is represented by a guideline forbidding discrimination?
What type of decision is represented by a guideline forbidding discrimination?
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Study Notes
Decision-Making Process
- Steps: Identify problem, define decision criteria, weigh criteria importance, develop alternatives, analyze alternatives, select alternative, implement, evaluate effectiveness.
Programmed Decisions
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Definition: Repetitive decisions with established rules/guidelines for specific situations.
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Types:
- Procedure: Sequential steps for structured problems (e.g., ordering supplies).
- Rule: Explicit statements dictating actions (e.g., late arrival policy).
- Policy: Guidelines for decision-making (e.g., anti-discrimination policy).
Nonprogrammed Decisions
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Definition: Unique, nonrecurring decisions requiring custom solutions—responding to novel opportunities/threats.
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Examples: Adopting new technology, acquiring firms, improving brand image.
Decision-Making Conditions
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Certainty: Complete information available.
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Risk: Clear goals, probability estimates available for success/failure.
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Uncertainty: Clear goals, incomplete information about alternatives/future events.
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Ambiguity: Unclear goals, problem definition, information about outcomes is unavailable.
Importance of Correct Decisions
- Organizations with mature design have clearer decision rights than those with less mature designs.
Common Decision Biases/Errors
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Sunk Cost Error: Focusing on past expenditures instead of future outcomes.
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Self-Serving Bias: Attributing success to oneself and blaming failure on external factors.
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Overconfidence Bias: Overestimating abilities and performance.
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Immediate Gratification Bias: Choosing immediate rewards over long-term gains.
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Anchoring Effect: Overreliance on initial information.
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Confirmation Bias: Seeking information supporting existing choices, discounting contradictory information.
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Hindsight Bias: Believing an outcome was foreseeable after it occurred.
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Description
Explore the essential steps in the decision-making process, including identifying problems and weighing alternatives. Understand the distinctions between programmed and nonprogrammed decisions, along with examples and types of each. This quiz will help reinforce your knowledge in effective decision-making strategies.
