Management Chapter 7: Data & Decision-Making

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Questions and Answers

What does the term 'framing error' refer to in managerial decision-making?

Analyzing problems based on positive or negative perceptions (correct)

Focusing solely on positive feedback from past decisions

Considering all possible information before making a choice

Continuing a decision despite failing results

Which type of creativity is characterized by exceptional individuals creating extraordinary outcomes?

Incremental creativity

Big-C creativity (correct)

Situational creativity

Little-C creativity

What is the main characteristic of 'confirmation error' in decision-making?

Evaluating all possible options before making a choice

Seeking diverse perspectives before finalizing a decision

Ignoring evidence that contradicts an assumption (correct)

Reassessing decisions with new information

What describes 'escalating commitment' in the context of decision-making?

Doubling down on decisions when the initial outcomes are disappointing Signup and view all the answers

Which of the following best explains the concept of creativity in decision-making?

Generating novel ideas to solve problems or seize opportunities Signup and view all the answers

What is the distinction between data and information?

Data is raw facts, whereas information is data made meaningful for decision-making. Signup and view all the answers

Which of the following describes a characteristic of useful information?

Timely and relevant Signup and view all the answers

What competency involves evaluating and analyzing information for decision-making?

Analytical competency Signup and view all the answers

What is a primary challenge when dealing with 'big data'?

Difficulty in processing without advanced techniques Signup and view all the answers

Which managerial competency is concerned with the utilization of new technologies?

Technological competency Signup and view all the answers

What does data mining specifically focus on?

Analyzing data to generate useful information for decision-making Signup and view all the answers

What is the role of a Management Information System?

To collect, organize, and distribute data using technology Signup and view all the answers

Which of the following is NOT a potential pitfall in managerial decision-making?

Utilizing analytical reports Signup and view all the answers

What is the primary objective of the implementation step in the decision-making process?

To make the chosen solution a reality Signup and view all the answers

Which of the following biases involves making decisions based on recent information or events?

Availability Bias Signup and view all the answers

In evaluating the results of a decision, what should a manager do if actual results do not meet desired results?

Return to earlier steps to reassess the process Signup and view all the answers

Which ethical question pertains to the rights and duties of everyone involved in the decision-making process?

Rights Signup and view all the answers

The process of adjusting decisions based on previous points is referred to as which type of bias?

Anchoring and Adjustment Bias Signup and view all the answers

What is a common mistake in defining a problem?

Choosing too many problems to focus on Signup and view all the answers

What inconsistency is a decision maker trying to avoid according to the content provided?

Lack-of-participation error Signup and view all the answers

Which ethical spotlight question assesses if decisions benefit all parties involved?

Utility Signup and view all the answers

Which of the following is NOT a criterion for evaluating alternatives during decision-making?

Turnaround time Signup and view all the answers

What distinguishes the classical model from the behavioral model in decision-making?

Classical model emphasizes data over intuition Signup and view all the answers

What common reasoning mistake might lead a manager to base decisions on unusual but memorable events?

Availability Bias Signup and view all the answers

What should be prioritized when generating alternative courses of action?

Potential side effects and their implications Signup and view all the answers

Which mistake is commonly made during the search for alternatives?

Abandoning the search too quickly Signup and view all the answers

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

Identifying and defining the problem Signup and view all the answers

Which of the following approaches is associated with optimizing decisions?

Classical model Signup and view all the answers

What should NOT be considered when evaluating the advantages and disadvantages of a solution?

The popularity of the solution within the organization Signup and view all the answers

What characterizes structured problems?

They are familiar, straightforward, and have clear information needs. Signup and view all the answers

In which type of environment do managers lack complete information but can assess probabilities of outcomes?

Risk environment Signup and view all the answers

What is a defining characteristic of non-programmed decisions?

They meet the demands of unique and unstructured problems. Signup and view all the answers

Which rule is NOT listed as part of effective crisis management?

Identify the best long-term solution immediately. Signup and view all the answers

What distinguishes unstructured problems from structured problems?

Unstructured problems are full of ambiguities and information deficiencies. Signup and view all the answers

Which statement best describes a crisis in management?

It is an unexpected problem that can lead to disaster if not addressed quickly. Signup and view all the answers

What is the main challenge in an uncertain environment for decision-making?

There is insufficient information to assign probabilities to outcomes. Signup and view all the answers

Which type of problems are typically solved using programmed decisions?

Structured problems with established solutions from past experiences. Signup and view all the answers

What characterizes a performance opportunity in decision-making?

It is a situation that can lead to improvement if proper actions are taken. Signup and view all the answers

Which type of problem solver is primarily reactive in their approach?

Problem solvers Signup and view all the answers

How does systematic thinking differ from intuitive thinking?

Systematic thinking is characterized by a rational, step-by-step approach, while intuitive thinking is flexible. Signup and view all the answers

What is an essential quality of effective multi-dimensional thinking?

It necessitates skill at strategic opportunism while being flexible to resolve short-term problems. Signup and view all the answers

What behavior distinguishes problem seekers from problem avoiders?

Problem seekers are proactive in anticipating problems and opportunities. Signup and view all the answers

Which cognitive style tends to approach problems in a flexible manner?

Intuitive thinkers Signup and view all the answers

What is the key to managing a performance threat?

Proactively gathering information and making informed decisions. Signup and view all the answers

Which of the following best describes the term 'strategic opportunism'?

A blend of long-term focus while being adaptable to immediate challenges. Signup and view all the answers

Study Notes

Management - Chapter 7: Data and Decision-Making

This chapter focuses on the role of information, data, and analytics in management, managerial approaches to problem-solving, the decision-making process, and creativity in managerial decision-making.

Learning Objectives

Discuss the role of information, data, and analytics in management
Identify and analyze different ways managers approach and deal with problems
Explain the six steps in the decision-making process
Describe the potential pitfalls and sources of creativity in managerial decision-making

Managerial Competencies

Technological competency: Understanding and utilizing new technologies effectively.
Information competency: Locating, gathering, organizing, and presenting information for decision-making and problem-solving.
Analytical competency: Evaluating and analyzing information to make informed decisions and solve problems.

Information, Technology, & Management (1 of 6)

Data: Raw facts and observations
Information: Useful data made meaningful for decision-making
Information is crucial for effective management decision making

Information, Technology, & Management (2 of 6)

Useful information’s characteristics: Timely, high quality, complete, relevant, and understandable
Management Information System (MIS): Uses technology for collecting, organizing, and distributing data

Information, Technology, & Management (3 of 6)

Data Mining: Analyzing data to extract useful information for decision-makers
Big Data: Huge quantities of data, needing sophisticated analysis techniques
Management analytics: Conducting systematic evaluations and analysis of data for better decision-making

Information, Technology, & Management (4 of 6)

Business Intelligence: Using information systems to extract and report useful data for decision-makers
Data Visualization: Using visuals to update and display key performance metrics in real-time via executive dashboards

Information, Technology, & Management (5 of 6)

Information needs in organizations: Include gathering intelligence information, providing public information, and information exchanges within the organization to facilitate decision-making and problem-solving

Information, Technology, & Management (6 of 6)

Internal and external flows of information are vital for organizational decision-making and problem-solving.

Problem Solving and Managerial Decisions (1 of 16)

Managers are continuous processors of information, gathering, sharing, and receiving information electronically and in person for informed decisions.

Problem Solving and Managerial Decisions (2 of 16)

Managers use information in various roles
Analytical, technological and information competencies are crucial

Problem Solving and Managerial Decisions (3 of 16)

Problem solving: The process of identifying gaps between desired and actual performance and acting to achieve the desired performance.

Problem Solving and Managerial Decisions (4 of 16)

Decision: A choice among possible courses of action
Performance threat: A situation where problems exist or are likely to occur
Performance opportunity: A chance for improvement.

Problem Solving and Managerial Decisions (5 of 16)

Problem solvers: React to problems while gathering information to fix them.
Problem avoiders: Don't gather information or work to resolve problems.

Problem Solving and Managerial Decisions (6 of 16)

Problem seekers: Anticipate problems and opportunities as well as act appropriately to develop and maintain advantages.

Problem Solving and Managerial Decisions (7 of 16)

Systematic thinking: Rational and step-by-step approach to problem-solving.
Intuitive thinking: Flexible and spontaneous approach to problem-solving.

Problem Solving and Managerial Decisions (8 of 16)

Multi-dimensional thinking: A combination of intuitive and systematic thinking; crucial for effective decision making.
Strategic opportunism: Remaining focused on long-term objectives and adaptable in response to short-term circumstances.

Problem Solving and Managerial Decisions (9 of 16)

Different cognitive styles exist amongst managers (sensation thinkers, intuitive thinkers, sensation feelers, intuitive feelers)
Understanding these helps appreciate decision-making methods.

Problem Solving and Managerial Decisions (10 of 16)

Structured problems: Familiar, straightforward, and clear information needs.
Programmed decisions: Pre-existing solutions applied to structured problems.

Problem Solving and Managerial Decisions (11 of 16)

Unstructured problems: Complex, ambiguous problems requiring unique solutions.
Non-programmed decisions: Solutions created to meet the demands of a unique and complex problem, commonly needed by higher-level management.

Problem Solving and Managerial Decisions (12 of 16)

Crisis decision-making: Handling sudden and unexpected problems demanding fast and appropriate resolution.

Problem Solving and Managerial Decisions (13 of 16)

Rules for crisis management: Determine the situation, prioritize speed, acknowledge the unfamiliar, trust skeptics, be prepared to address the problem.

Problem Solving and Managerial Decisions (14 of 16)

Certain environment: Complete information on possible actions and consequences.
Risk environment: Partial information with probabilities of outcomes.

Problem Solving and Managerial Decisions (15 of 16)

Uncertain environment: Limited information and difficult to estimate probabilities of outcomes.

Problem Solving and Managerial Decisions (16 of 16)

Three environments for problem solving and decision-making: Certain, risk, and uncertain.

The Decision-Making Process (1 of 11)

The decision making process involves 5 steps.

The Decision-Making Process (2 of 11)

Step 1: Identifying and defining the problem – Focusing on gathering information, processing it, and establishing decision objectives. Common mistakes include: Defining too broadly or narrowly; Focusing on symptoms instead of causes; Choosing the wrong problem.

The Decision-Making Process (3 of 11)

Step 2: Generating and evaluating alternative courses of action – Formulating solutions, gathering more information, and analyzing the advantages and disadvantages of each solution and consideration of different approaches to evaluating alternatives, including stakeholder analysis and cost-benefit analysis.

The Decision-Making Process (4 of 11)

Criteria for evaluating alternatives (in Step 2): Benefits, costs, timeliness, acceptability, and ethical soundness.

The Decision-Making Process (5 of 11)

Common mistakes during Step 2: Abandoning the search for alternatives too quickly; lack of self-confidence and commitment; unanticipated positive and negative side effects.

The Decision-Making Process (6 of 11)

Step 3: Deciding on a preferred course of action – Classical model (optimization) and behavioral model (satisficing); both are important to consider.

The Decision-Making Process (7 of 11)

Differences in classical and behavioral models regarding rationality, the perfect world, bounded rationality, and optimizing versus satisficing decisions.

The Decision-Making Process (8 of 11)

Step 4: Implementing the decision – Involves taking action to ensure the chosen solution is put into practice, requiring willingness and ability from managers to construct proper plans, and preventing the lack-of-participation error.

The Decision-Making Process (9 of 11)

Step 5: Evaluating results – Comparing the actual results with the desired ones, examining positive and negative consequences; If objectives were not met, returning to the earlier steps in the process.

The Decision-Making Process (10 of 11)

Spotlight questions for ethical reasoning at each step: Utility (satisfy stakeholders), Rights (respect everyone’s rights and duties), Justice (consistent with justice), and Caring (consistent with care).

Issues in Managerial Decision-Making (1 of 6)

Issues discussed include why decision errors occur, how problems are framed, and how simplifying strategies (heuristics) aid decision-making.

Issues in Managerial Decision-Making (2 of 6)

Availability bias: Decisions based on easily available information, especially recent information.
Representativeness bias: Decisions based on similarities to other situations.
Anchoring and adjustment bias: Decisions biased by earlier information or decisions (use of anchoring points).

Issues in Managerial Decision-Making (3 of 6)

Framing error: Interpreting problems based on perception (positive or negative).
Confirmation error: Focusing only on information supporting prior decisions.
Escalating commitment: Continuing a poor course of action despite evidence of failure.

Issues in Managerial Decision-Making (4 of 6)

Creativity (Big-C and Little-C): Big-C: Extraordinary ideas by exceptional people; Little-C: Unique ideas by individuals in daily tasks and situations.

Issues in Managerial Decision-Making (5 of 6)

Task Expertise, Task Motivation, and Creativity Skills: Drivers of creativity in managerial decision-making. These skills are important to achieve creativity.

Issues in Managerial Decision-Making (6 of 6)

Team Creativity Skills, Management Support, and Organizational Culture: Drivers of situational creativity within organizations. These factors encourage a productive environment for creativity.

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Description

Explore the essential role of information, data, and analytics in management with this quiz based on Chapter 7. Learn about different managerial approaches to problem-solving, the decision-making process, and the importance of creativity in these processes. Test your understanding of the competencies required for effective management decisions.