Decision-Making Under Uncertainty Final Exam Summary

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Questions and Answers

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

  • Developing alternatives
  • Conveying the decision to others
  • Identifying the decision criteria
  • Defining the decision (correct)

What is a characteristic of a problem according to the text?

  • It becomes a problem when a manager becomes unaware of it
  • There is no pressure to solve the problem
  • The manager must have the authority, information, or resources to solve it (correct)
  • It is always easy to solve

What does allocating weights to decision criteria involve?

  • Assigning different levels of importance to criteria (correct)
  • Ignoring the importance of criteria
  • Assigning equal importance to all criteria
  • Balancing the importance of criteria

What does implementing the selected alternative involve?

<p>Putting the chosen alternative into action (A)</p> Signup and view all the answers

How is the soundness of a decision judged according to the text?

<p>By its outcomes (D)</p> Signup and view all the answers

In which management function does a manager consider the organization's long-term objectives and strategies?

<p>Planning (C)</p> Signup and view all the answers

When applying game theory, which game is mentioned in the text?

<p>Prisoner's dilemma (C)</p> Signup and view all the answers

What is one concept associated with a manager's intuitive decision-making according to the text?

<p>Bounded rationality (B)</p> Signup and view all the answers

What does controlling involve in management?

<p>Monitoring and regulating activities in the organization (B)</p> Signup and view all the answers

What are some characteristics of problems according to the text?

<p>They become a problem when a manager becomes aware of them (A)</p> Signup and view all the answers

What are the 8 steps of the decision-making process?

<p>Identify the problem, gather information, generate alternatives, evaluate alternatives, choose the best alternative, implement the decision, monitor the decision, review the decision-making process (D)</p> Signup and view all the answers

What are the three types of decision-making conditions?

<p>Certainty, risk, uncertainty (C)</p> Signup and view all the answers

What are the two types of problems and decisions?

<p>Unstructured problems and nonprogrammed decisions (B)</p> Signup and view all the answers

What are the three decision-making styles?

<p>Analytic style, directive style, conceptual style (A)</p> Signup and view all the answers

What are the 12 decision-making biases?

<p>Framing bias, hindsight bias, representative bias, recency bias (B)</p> Signup and view all the answers

What are the 6 characteristics of an effective decision-making process?

<p>Rationality, inclusiveness, flexibility, speed, accuracy, creativity (B)</p> Signup and view all the answers

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Study Notes

Decision-Making Process

  • The first step in the decision-making process is to identify the problem.

Problem Characteristics

  • A characteristic of a problem is that it is a gap between a current and desired state.

Decision Criteria

  • Allocating weights to decision criteria involves assigning importance to each criterion.

Implementing Decisions

  • Implementing the selected alternative involves putting the chosen solution into action.

Evaluating Decisions

  • The soundness of a decision is judged by its outcome, which is the result of the decision.

Management Functions

  • Planning is the management function that involves considering the organization's long-term objectives and strategies.

Game Theory

  • The game mentioned in the text when applying game theory is the zero-sum game.

Intuitive Decision-Making

  • One concept associated with a manager's intuitive decision-making is instinct.

Controlling

  • Controlling involves monitoring and correcting the implementation of a decision.

Problem Types

  • Characteristics of problems include being a gap between a current and desired state.

Decision-Making Process Steps

  • The 8 steps of the decision-making process are: identifying the problem, generating alternatives, evaluating alternatives, selecting an alternative, implementing the selected alternative, evaluating the outcome, following up, and reviewing the decision.

Decision-Making Conditions

  • The three types of decision-making conditions are certainty, risk, and uncertainty.

Problem and Decision Types

  • The two types of problems and decisions are structured and unstructured.

Decision-Making Styles

  • The three decision-making styles are rational, intuitive, and behavioral.

Decision-Making Biases

  • The 12 decision-making biases include confirmation bias, anchoring bias, and availability heuristic, among others.

Effective Decision-Making

  • The 6 characteristics of an effective decision-making process are: defining the problem, establishing criteria, weighing criteria, generating alternatives, selecting an alternative, and reviewing the decision.

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