Decision-Making Under Uncertainty Final Exam Summary

Questions and Answers

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

Defining the decision

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

The manager must have the authority, information, or resources to solve it

What does allocating weights to decision criteria involve?

Assigning different levels of importance to criteria

What does implementing the selected alternative involve?

Putting the chosen alternative into action Signup and view all the answers

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

By its outcomes Signup and view all the answers

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

Planning Signup and view all the answers

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

Prisoner's dilemma Signup and view all the answers

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

Bounded rationality Signup and view all the answers

What does controlling involve in management?

Monitoring and regulating activities in the organization Signup and view all the answers

What are some characteristics of problems according to the text?

They become a problem when a manager becomes aware of them Signup and view all the answers

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

Identify the problem, gather information, generate alternatives, evaluate alternatives, choose the best alternative, implement the decision, monitor the decision, review the decision-making process Signup and view all the answers

What are the three types of decision-making conditions?

Certainty, risk, uncertainty Signup and view all the answers

What are the two types of problems and decisions?

Unstructured problems and nonprogrammed decisions Signup and view all the answers

What are the three decision-making styles?

Analytic style, directive style, conceptual style Signup and view all the answers

What are the 12 decision-making biases?

Framing bias, hindsight bias, representative bias, recency bias Signup and view all the answers

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

Rationality, inclusiveness, flexibility, speed, accuracy, creativity Signup and view all the answers

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.