Decision Theory and Performance Measurement Systems
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Questions and Answers

What is the purpose of the phases of planning discussed?

To guide the decision-making process in problem-solving.

Which is NOT a subphase in the phases of planning?

  • Problem formulation
  • Problem analysis
  • Problem awareness
  • Problem resolution (correct)

    • Strategic planning typically involves short-term decision-making.

    False

    Planning ranges address the ___________ between short-term and long-term planning.

    <p>dilemma</p> Signup and view all the answers

    What is the main content of decision theory?

    <p>Systematic knowledge of the decision, i.e., the selection of an alternative course of action or a set of alternative courses of action from a set of alternative strategies in conformity with the target system.</p> Signup and view all the answers

    Which of the following are considered as schools of thought in business administration?

    <p>Factor-theoretical approach</p> Signup and view all the answers

    Decision theory is concerned with describing business activities and does not provide recommendations for action.

    <p>False</p> Signup and view all the answers

    What is the focus of practical-normative business studies?

    <p>Decision-making and action</p> Signup and view all the answers

    Match the following forecasting models with their types:

    <p>Moving averages = Statistical forecasting models Network planning technique = Forecasting models Outranking methods = Utility theory Neural networks = Statistical forecasting models</p> Signup and view all the answers

    What are the three criteria mentioned in the verbal representation for Alternatives A, B, and C?

    <p>Costs, Staff satisfaction, Cleanliness and reliability</p> Signup and view all the answers

    In the Result matrix, how is the Staff satisfaction criterion rated for Alternatives A, B, and C?

    <p>bad = 3, medium = 2, good = 1</p> Signup and view all the answers

    In the Benefit fusion step, the sum of the scores for Alternatives A, B, and C are __, __, and __ respectively.

    <p>7, 5, 6</p> Signup and view all the answers

    Match the following statements with their correct definition: 1. Planning is a systematic and rational process. 2. Planning is prospective thinking for strategic competitive advantages.

    <p>1 = Definition: Planning is fundamentally systematic and rational process. 2 = Definition: Planning is thinking about future actions to achieve competitive advantages. 3 = Definition: Planning involves only data collection and systematic processes. 4 = Definition: Planning involves generating alternatives and overcoming uncertainty.</p> Signup and view all the answers

    What are the alternatives presented by the committee for decision in the example?

    <p>The leader's wife takes over the laundry on a voluntary basis</p> Signup and view all the answers

    Which alternative is preferred by the staff in the example, and why?

    <p>Alternative A is preferred by the staff because it provides a job for the half-time worker.</p> Signup and view all the answers

    Which alternative has the lowest cost in the example, and what are the concerns associated with it?

    <p>Alternative C has the lowest cost with pure material costs of 7,500 euros, but there is considerable resentment from the staff as volunteer work is perceived as competition to paid work, in addition to quality and reliability concerns.</p> Signup and view all the answers

    In the example, what are the key considerations in deciding which alternative to choose?

    <p>The key considerations involve balancing costs, quality of service, staff preferences, and perception of volunteer work as competition to paid work.</p> Signup and view all the answers

    What are the different model types based on intended use?

    <p>Descriptive, explanatory, causal, prognostic, simulation, decision-making, optimisation model</p> Signup and view all the answers

    What are the different forms of model presentation?

    <p>Verbal</p> Signup and view all the answers

    Quantitative models are described by cardinal scales, while qualitative models are described by nominal or ordinal scales.

    <p>True</p> Signup and view all the answers

    The phenomenon disappears in the zero point for a __________ scale.

    <p>ratio</p> Signup and view all the answers

    What are some typical strategies mentioned in the content?

    <p>Settlement and agriculture, well drilling, human medical care, veterinary care, hunting rodents</p> Signup and view all the answers

    Which of the following can be a consequence of overgrazing and overpopulation?

    <p>Famine</p> Signup and view all the answers

    Experts are generally successful in balancing complex systems.

    <p>False</p> Signup and view all the answers

    Model is the depiction of reality in another _______.

    <p>medium</p> Signup and view all the answers

    Match the model types with their descriptions:

    <p>Descriptive model = Representation of elements and relationships in real systems Forecast model = For predicting future environmental developments and estimating effects of alternative actions Explanatory model = Modelling cause-effect relationships between variables</p> Signup and view all the answers

    What step involves developing appropriate models for each stage?

    <p>Principle: Develop appropriate models for each step</p> Signup and view all the answers

    What is the main problem with different model types in the structuring process?

    <p>Difficult to convert into each other</p> Signup and view all the answers

    The structured process includes the following steps: Delimitation, Impact determination, Evaluation, Goal setting, and ________.

    <p>Solution defect</p> Signup and view all the answers

    What are some creativity techniques for generating alternative courses of action?

    <p>Brainstorming</p> Signup and view all the answers

    What is the written form of brainstorming where group members write down proposed solutions on a form within five minutes?

    <p>Method 635</p> Signup and view all the answers

    In problem situations, techniques like brainstorming, brainwriting, morphological box, and synectics are used for generating _ _ _ _ _ _ _ _ _ _ _ _ _ courses of action.

    <p>alternative</p> Signup and view all the answers

    Match the following analysis techniques with their descriptions:

    <p>Obtaining excitation information = Technique for gathering initial data and insights System and problem analysis = Analyzing the overall system and identifying issues Turnover analysis = Evaluation of financial performance Benchmarking = Comparing performance against industry standards</p> Signup and view all the answers

    Is it known whether the type and number of variables are determined?

    <p>No</p> Signup and view all the answers

    Are data and impact correlations known?

    <p>No</p> Signup and view all the answers

    Is it possible to evaluate alternative courses of action?

    <p>Yes</p> Signup and view all the answers

    Does a clear and operational objective function exist?

    <p>Yes</p> Signup and view all the answers

    Is there an efficient resolution process?

    <p>Yes</p> Signup and view all the answers

    Study Notes

    Planning Methods

    • Analysis techniques:
      • Obtaining excitation information
      • System and problem analysis
      • Examples: indicator systems, SWOT analysis, portfolio analysis, turnover analysis, benchmarking
    • Creativity techniques:
      • Techniques for generating alternative courses of action
      • Especially in complex and novel problem situations
      • Examples: brainstorming, brainwriting, morphological box, synectics

    Overview of Methods

    • Analysis techniques:
      • Obtaining excitation information
      • System and problem analysis
      • Examples: indicator systems, SWOT analysis, portfolio analysis, turnover analysis, benchmarking
    • Creativity techniques:
      • Techniques for generating alternative courses of action
      • Especially in complex and novel problem situations
      • Examples: brainstorming, brainwriting, morphological box, synectics

    Phases of Planning

    • Ideal typical process:
      • Problem determination
      • Determination of alternatives
      • Evaluation and selection
    • Subphases:
      • Problem awareness
      • Problem analysis
      • Problem formulation
      • Search for suitable measures
      • Alternative search
      • Alternative analysis
      • Determination of alternatives
      • Final evaluation and decision

    Alternative Courses of Action

    • Quantity of resource-conforming alternatives
    • Quantity of environmentally compliant alternatives
    • Set of alternatives that conform to the target system

    Planning Dilemma

    • Short-term planning:
      • Low uncertainty, high level of detail
      • Low resource commitment
    • Long-term planning:
      • Large amount of alternative actions
    • Solution: Different planning ranges (long-term, medium-term, short-term)

    Strategic, Tactical and Operational Planning

    • Strategic planning:
      • Defines the corporate strategy at the highest level
      • Usually long-term
    • Tactical planning:
      • In corporate medium construction
      • Usually medium-term
    • Operational planning:
      • At the implementing base
      • Usually short-term

    Security and Insecurity

    • Security situation:
      • The situation that will occur is known
      • Deterministic decision model
    • Uncertainty situation:
      • The situation that occurs is not fully known
      • Certain environmental conditions are not known or occur with probabilities

    Types of Uncertainty

    • Risk situation:
      • Probabilities of occurrence for environmental states are known
      • Stochastic decision model
    • Uncertainty situation:
      • Environmental conditions are known
      • Probabilities of occurrence are not known
    • Game situation:
      • Uncertainty results from a rationally acting adversary (e.g. competition)

    Models and Modelling

    • Principle: A model is the representation of reality through another medium
    • Example: Stone house is depicted by paper model

    Example: Tanaland

    • Source: Dörner, The Logic of Failure

    • Content: Choosing the optimal strategy for the development of Tanaland in East Africa### Decision Theory and Performance Measurement

    • Decision Theory is a component of Business Administration, which is the science of economic activities of companies.

    • The object of experience is the company as a problem-solving unit, and the object of knowledge is efficiency and economic action.

    • Decision Theory is the "core" of Business Administration, and without a decision, no Business Administration is possible.

    Planning and Decision-Making

    • Planning is a cross-sectional task that involves the development of measures to achieve a desired state.
    • The task of planning is triggered by the deviation of desired and actual variables, and the preconditions are the perception of the deviation as a problem.
    • Planning involves future orientation, design orientation, subjective process, information process, systematic process, and preparation of decisions and actions.

    Decision Problem

    • A decision problem involves an initial situation, alternatives for action, interdependencies, objectives, and action results.
    • The initial situation is the circumstances that cannot be influenced by the planner, and alternatives for action are the design options for achieving the objective.
    • Interdependencies are the relations between data and variables, and the objective is the goal to be achieved by the alternative courses of action.

    Features of Planning

    • Planning is a future-oriented process that involves the selection of alternatives.
    • It is a subjective process that depends on personal preferences and is based on imperfect information.
    • Planning requires the collection of information and is a systematic process that prepares decisions and actions.

    Definition of Planning

    • Planning is a fundamentally systematic and rational process carried out by planners to solve decision-making problems while taking subjective goals into account.
    • Planning is prospective thinking in the form of mental anticipation of future action with the aim of achieving strategic competitive advantages.

    Systematics and Intuition

    • Systematics involves the planning process, data collection, and other systematic aspects of planning.
    • Intuition involves generating alternatives and overcoming uncertainty, and it is not contradictory to systematics.

    Phases of Planning

    • The phases of planning include planning, implementation, and control.
    • Planning is the starting point of all operational action in a static conversion system.
    • Control is feedback control and serves to verify plan fulfillment.

    Basic Terms

    • Planning range refers to the scope of planning, including the areas of the company that are affected by the plan.
    • Phases of planning refer to the stages of planning, including planning, implementation, and control.

    Value and Target Systems

    • A value system is a set of values that guide decision-making, and it is developed through a process of goal-setting and prioritization.

    • A target system is a set of specific, measurable goals that are derived from the value system.

    • The development of a target system involves the identification of objectives, the specification of targets, and the allocation of resources.### Decision Theory

    • Descriptive decision theory focuses on describing and explaining people's decision-making behavior.

    Models and Concepts

    • Control loop model: includes disturbance, size, rule, leadership, and control.
    • Steering, management, and leadership: involves fulfillment of function, meaning, vision, and mission.
    • Functional view of management: includes planning, organization, personnel management, and control.
    • Ideal-typical management cycle: consists of planning, implementation, control, and feedback.

    Corporate Management

    • Management concepts: include scheduled, control-determined, organization-oriented, and corporate management as coaching.
    • Corporate management involves performance and financial management, including planning, implementation, and control.

    Dynaxity

    • Dynaxity zones: range from static to turbulent, with increasing complexity and dynamic relationships.
    • Dynaxity and system regime: relate to complexity, chaos, and time.

    Side Effects and Consequences

    • Side effects, repercussions, and consequences: involve primary effects, retroactivity, and consequential effects.

    Decision Making

    • Decision making involves considering alternatives, evaluating costs, and assessing quality and reliability.
    • Example: choosing between alternatives A, B, and C for laundry services at a youth center, considering factors such as costs, job security, and quality.

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    Decision Theory and Performance Measurement Systems Lecture Notes PDF

    Description

    This quiz covers decision theory and the development of evaluation and performance measurement systems, specifically focused on the lecture notes from the Bavarian Business School's Sommersemester 2024 course with Prof. Dr. Markus Kleinschwärzer.

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