Decision-Making Theories Overview
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Questions and Answers

Which of the following is NOT an assumption of rationality in decision-making?

  • The decision maker operates in the best interests of the competition. (correct)
  • The problem faced is clear and unambiguous.
  • The decision maker has full information about all possible alternatives.
  • The decision should maximize the likelihood of achieving the goal.

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

  • Eliminating all but one option through rigorous analysis.
  • Selecting the first solution that meets minimal criteria. (correct)
  • Making decisions without considering any alternatives.
  • Choosing the best alternative after thorough analysis.

Which decision-making technique involves encouraging divergent opinions to enhance decision-making quality?

  • Evidence-based decision-making
  • Rigorous debate (correct)
  • Intuitive decision-making
  • Brainstorming

What is a key characteristic of intuitive decision-making?

<p>It is shaped by accumulated experience and judgment. (D)</p> Signup and view all the answers

What is a common risk of groupthink in decision-making processes?

<p>Suppression of dissenting opinions. (D)</p> Signup and view all the answers

Which principle is NOT part of effective brainstorming sessions?

<p>Wild ideas should not be encouraged. (B)</p> Signup and view all the answers

What defines 'bounded rationality' in the context of decision-making?

<p>A rational approach limited by cognitive processing abilities. (C)</p> Signup and view all the answers

In evidence-based decision-making, what is emphasized as crucial?

<p>Commitment to making informed decisions based on facts. (C)</p> Signup and view all the answers

Flashcards

Rational Decision-Making

A decision-making approach where individuals use logic and reason to choose the best option that maximizes value.

Bounded Rationality

The idea that rational decision-making is limited by an individual's ability to process information.

Satisficing

Accepting a solution that is good enough, even if it might not be the absolute best.

Intuitive Decision-Making

Making decisions based on experience, feelings, and accumulated judgment.

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Brainstorming

A group brainstorming technique that encourages spontaneous generation of ideas with no judgment.

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Evidence-Based Decision-Making

Decisions are made using the best available evidence to ensure accuracy and informed choices.

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Groupthink

A group dynamic where members suppress dissenting viewpoints to maintain harmony.

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Rigorous Debate

Healthy debate and constructive conflict among group members to improve decision quality.

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Study Notes

Rational Decision-Making

  • Rational decision-making involves choices that are logical, consistent, and maximize value.
  • Assumes a fully objective and logical decision-maker.
  • Assumes an unambiguous problem.
  • Assumes a clear, specific goal and knowledge of all alternatives and consequences.
  • Assumes decisions consistently maximize goal achievement likelihood.
  • Assumes decisions are in the best organizational interest.

Bounded Rationality

  • Bounded rationality is a rational, yet limited, approach.
  • Information processing limits managers' ability to see all alternatives.
  • Managers often "satisfice" instead of maximizing.
  • Satisficing involves accepting a satisfactory, sufficient, or "good enough" solution.
  • Satisficing is a choice of the first solution meeting satisfactory criteria; further information pursuit isn't justified.

Intuitive Decision-Making

  • Intuitive decision-making relies on experience, feelings, and judgments.
  • Intuition is a quick apprehension based on experience without conscious thought.
  • Intuitive decision-making is not arbitrary, relying on years of practice and experience.

Innovative Decision-Making Techniques

  • Brainstorming: a face-to-face group process to generate a wide range of alternatives.
  • Evidence-based decision-making: using the best available facts and evidence.
  • Rigorous debate: employing constructive conflict based on different perspectives.
  • Avoiding groupthink: recognizing and combating groupthink (suppression of dissenting opinions).

Brainstorming Principles

  • Stay focused on the topic.
  • Encourage wild ideas.
  • Defer judgment.
  • Build on others' ideas.
  • Hold one conversation at a time.
  • Aim for quantity.
  • Use visuals.

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Description

Explore the various theories of decision-making, including rational decision-making, bounded rationality, and intuitive decision-making. This quiz delves into the assumptions and characteristics of each approach to help you understand how decisions can be made effectively in a managerial context.

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