Podcast
Questions and Answers
What best defines programmed decisions?
What best defines programmed decisions?
Which condition best allows for certainty in decision making?
Which condition best allows for certainty in decision making?
In which situation would uncertainty most likely occur?
In which situation would uncertainty most likely occur?
Which type of decision is characterized by long-term consequences?
Which type of decision is characterized by long-term consequences?
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What is subjective probability in decision making?
What is subjective probability in decision making?
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Which aspect is NOT characteristic of management decisions?
Which aspect is NOT characteristic of management decisions?
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What is the first step in the decision-making process?
What is the first step in the decision-making process?
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What is the role of alternatives in the decision-making process?
What is the role of alternatives in the decision-making process?
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What is an essential component of the evaluation phase in decision making?
What is an essential component of the evaluation phase in decision making?
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Which approach can enhance the success of the implementation stage in decision making?
Which approach can enhance the success of the implementation stage in decision making?
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Which of the following is a common barrier to effective decision making?
Which of the following is a common barrier to effective decision making?
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What should managers avoid while making decisions?
What should managers avoid while making decisions?
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In the context of decision making, what is the 'illusion of control'?
In the context of decision making, what is the 'illusion of control'?
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Why might managers choose a risky decision when faced with two losses?
Why might managers choose a risky decision when faced with two losses?
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What does the feedback process in decision making help identify?
What does the feedback process in decision making help identify?
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What role does contingency planning play in decision making?
What role does contingency planning play in decision making?
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Study Notes
Decision Making
- Decision making is choosing a course of action from options.
- Programmed decisions are routine, repetitive, and occur regularly at lower organizational levels. They have short-term consequences and use readily available information, often applying pre-established rules (e.g., redundancy calculations).
- Non-programmed decisions are new, unstructured, and don't follow pre-existing rules. Judgment and creativity are crucial. They involve high-level management, have long-term consequences, and are complex with no established procedures (e.g., expanding to a new market).
- Management decisions often involve:
- Lack or presence of conflict
- Lack or presence of information or structure
- Uncertainty or certainty
Decision Making Conditions
- Certainty: Alternatives have known costs/benefits and lead to clear outcomes. This is rare due to factors like digital disruption, trade wars, etc.
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Risk: Outcomes are sometimes unknown, but costs and benefits are known. (e.g., rolling a die)
- Objective probability: Likelihood of an event based on hard data, usually statistical.
- Subjective probability: Likelihood of an event based on personal judgment.
- Uncertainty: All aspects (alternatives, likelihood, outcomes) are unknown. This is the most complex and often requires intuition and judgment.
Decision Making Process
- 1. Identify and Diagnose the Problem: Recognizing the need for action and clearly defining the problem. It is a difference between the current state and a desired future state. Understanding the true cause is crucial, needing relevant details.
- 2. Identify Alternatives: Expanding options by considering ready-made or custom-made solutions to broaden possibilities and potentially gain competitive advantage.
- 3. Evaluate Alternatives: Assessing advantages, disadvantages, costs, and benefits of each option for optimal decision. This can be intuitive or analytically based.
- 4. Choose an Alternative: Selecting the most suitable option; returning to step two if no suitable option is apparent.
- 5. Implementation: Ensuring those involved fully understand why the choice was made and are committed to making it a success.
- 6. Evaluate: Gathering feedback at various organizational levels to identify any needed adjustments. Feedback is continuous, not just a one-time event.
Barriers to Good Decision Making
- Framing in terms of gains and losses: Decisions may be influenced by perceived gains or losses from a reference point. There can be a tendency to choose riskier strategies when presented with two potential losses.
- Psychological biases: Feelings, emotions influence decision-making.
- Illusion of control: Managers may overestimate their impact on outcome. This leads to underestimation of consequences and reduces long-term sustainability.
- Short-term gains over long-term success: Prioritizing immediate benefits over long-term strategies.
- Time pressure: Rushed decisions may lead to inadequate research and flawed conclusions. This can be detrimental to quality.
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Description
This quiz explores the concepts of decision making, distinguishing between programmed and non-programmed decisions. It covers the conditions of certainty, risk, and uncertainty in management decision-making processes. Test your knowledge of the factors influencing decisions in organizational settings.
