Decision Making: Types and Processes

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Questions and Answers

What is the primary difference between strategic and operational decisions?

Strategic decisions are made for immediate problems, while operational decisions are long-term.

Strategic decisions are made by senior managers and influence medium to long-term direction, while operational decisions are made by junior managers for day-to-day operations. (correct)

Strategic decisions are typically made informally, while operational decisions are formalized.

Operational decisions influence the long-term direction of the company, whereas strategic decisions are day-to-day.

Which type of decision is characterized by dealing with new problems that have not been encountered before?

Innovative decisions (correct)

Routine decisions

Programmed decisions

Adaptive decisions

What type of decision is made under clear conditions and has been addressed by managers multiple times before?

Informal decisions

Programmed decisions (correct)

Formal decisions

Non-programmed decisions

Which of the following best describes a rational decision-making process?

Selecting among options based on reason and facts. Signup and view all the answers

What kind of decision is based on thoughts or feelings and is influenced by personal opinion?

Subjective decision Signup and view all the answers

When would a manager typically need to make an immediate decision?

When delaying would likely cause damage or loss. Signup and view all the answers

What type of decision is based on problems that are somewhat unusual and are an extension of past decisions?

Adaptive decisions Signup and view all the answers

Which of the following statements about decision making is correct?

Decision making can involve both objective and subjective factors. Signup and view all the answers

Which model of decision making suggests that managers often make safer choices without fully evaluating all alternatives?

Bounded Rationality Model Signup and view all the answers

What characteristic of the Political Model of decision making highlights the influence of stakeholder interests?

Decision making is driven by self-interests of powerful groups. Signup and view all the answers

In which decision-making model are decisions expected to be widely accepted due to participation from many members?

Group Decision Making Model Signup and view all the answers

What is the first step in the Rational Model of decision making?

Collect all required information. Signup and view all the answers

Which of the following best describes decision makers in the Bounded Rationality Model?

They may lack the time and information to make fully rational decisions. Signup and view all the answers

How does the Political Model of decision making categorize the decision process?

Driven by personal and group interests. Signup and view all the answers

Which decision making process operates under the assumption of 'normal' conditions?

Rational Model Signup and view all the answers

What is a common outcome of group decision making?

Higher likelihood of solution acceptance. Signup and view all the answers

Signup and view all the answers

Study Notes

Decision Making

Decision: A choice between two or more alternatives.
Decision making: The process of selecting the best alternative to achieve a goal.

Types of Decisions

Instinctive: Based on gut feeling (e.g., "fight or flight").
Rational: Based on logical reasoning and analysis of available choices.
Aesthetic: Based on subjective judgment (e.g., "Which painting is better?").
Emotional: Based on feelings (e.g., "Who to vote for?").
Objective: Based on measurable facts.
Subjective: Based on personal opinions, thoughts, or feelings.
Formal: Made by a committee or group, often recorded.
Informal: Made without formal structure or documentation.
Immediate: Decisions made quickly, with possible negative consequences if delayed.
Time delayed: Decisions requiring thorough evaluation of potential opportunities.
Strategic Decisions: Made by senior managers, impacting company direction in the medium to long term.
Operational Decisions: Made by junior managers, concerning day-to-day operations.
Routine Decisions: Related to repetitive, well-understood problems.
Adaptive Decisions: Based on past decisions, addressing somewhat unusual or partially understood problems.
Innovative Decisions: Addressing new and unfamiliar problems.
Programmed Decisions: Made under clear conditions, having been made many times before.
Non-programmed Decisions: Made under unclear conditions.

Decision Making Situation

Decision making can address:
- Problems (actual actions failing to meet objectives).
- Opportunities (the chance to exceed current objectives).

Decision Influences

Experience.
Values.
Role and position in the company.
Peers, family, and colleagues.
People in authority.
Knowledge and education.
Reputation.

Decision Making Models

NASA Model: A structured model:
- Assess the situation.
- Gather facts and assess unknowns.
- Identify alternatives.
- Establish decision criteria.
- Weigh alternatives.
- Select the best alternative.
- Review the decision.
Rational Model: A logical, step-by-step approach:
- Identify a problem or opportunity.
- Gather information.
- Analyze the situation.
- Develop options.
- Evaluate options.
- Select a preferred alternative.
- Act on the decision.
Bounded Rationality Model: Recognizes limitations in time, information, and capacity
- Decision makers operate with limited rationality.
- Managers might select the first satisfactory alternative rather than the optimal one.
Political Model: Acknowledges differing preferences and potential conflicts during group decision-making
- People have differing views and use information in various ways
- Decisions may be driven by self-interests
- Disagreement over problem definition and solutions is natural
Group Decision Making Model:
- Leverages shared knowledge, skills and experience
- Less pressure on individual manager to decide
- Solutions likely widely accepted
- Potential for delays and conflicts
Vroom Jago Model: Categorizes the appropriate level of involvement for decision-making that leaders should have with staff.

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Description

Explore the various types of decision-making processes in this quiz. Understand the differences between instinctive, rational, and strategic decisions, and how they impact our choices. Test your knowledge on the factors influencing decisions.