Management Decision Making Chapter 5

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What is the primary issue addressed by production blocking in brainstorming sessions?

Increased participation

Improved group dynamics

Loss of productivity (correct)

Enhanced creativity

Which decision-making technique involves group members providing written responses without meeting face-to-face?

Production Blocking

Nominal Group Technique

Skunkworks

Delphi Technique (correct)

What is the role of a product champion within a project?

To hinder project progress

To take ownership and provide leadership (correct)

To monitor team performance without involvement

To execute tasks without leadership

What is the purpose of skunkworks in an organization?

To encourage innovative product development Signup and view all the answers

Which of the following is NOT a characteristic of the nominal group technique?

Team members meet face-to-face to brainstorm openly Signup and view all the answers

What best describes programmed decision making?

It follows established rules and has been made repeatedly. Signup and view all the answers

Which process is typically associated with nonprogrammed decision making?

Deciding to enter a new and unpredictable market. Signup and view all the answers

What is the first step managers should take in the decision-making process?

Identify the decision-making conditions. Signup and view all the answers

How can cognitive biases affect managerial decision making?

They can lead to poor judgments and flawed decisions. Signup and view all the answers

What is a significant disadvantage of group decision making?

It can lead to groupthink and stifle individual input. Signup and view all the answers

What role does organizational learning play in decision making?

It enhances the ability to adapt to changing circumstances. Signup and view all the answers

Which option is NOT a characteristic of reasoned judgment?

It relies heavily on feelings and hunches. Signup and view all the answers

What is a common behavior during programmed decision making?

Relying on established guidelines. Signup and view all the answers

What is a primary reason managers fail to gather complete information when making decisions?

They face time constraints and information costs. Signup and view all the answers

What does the term 'satisficing' refer to in decision making?

Choosing a satisfactory solution rather than the best possible option. Signup and view all the answers

What is an advantage of group decision making?

It combines the skills and knowledge of various group members. Signup and view all the answers

What is groupthink?

An approach where group members prioritize consensus over critical analysis. Signup and view all the answers

What step should be taken to learn from feedback after a decision has been made?

Compare actual outcomes with expected outcomes. Signup and view all the answers

What role do heuristics play in decision making?

They provide rules based on personal experience to simplify decisions. Signup and view all the answers

Which of the following is a cognitive bias that affects decision making?

Sunk cost fallacy. Signup and view all the answers

How can group members prevent groupthink?

By encouraging open dialogue and dissenting views. Signup and view all the answers

What does the Classical Decision-Making Model assume about the decision maker's capabilities?

They can identify and evaluate all possible consequences. Signup and view all the answers

What is the role of a devil’s advocate in group decision making?

To challenge preferred alternatives and defend unpopular options Signup and view all the answers

What is meant by 'bounded rationality' within the Administrative Model?

Limitations in cognitive processing of information. Signup and view all the answers

How does diversity among decision makers affect groupthink?

It decreases the likelihood of groupthink Signup and view all the answers

What characterizes the uncertainty faced by decision makers in the Administrative Model?

The full range of decision-making alternatives is unknown. Signup and view all the answers

Why do decision makers often settle for satisfactory rather than optimum decisions according to the Administrative Model?

Complexities in real-world decision-making create challenges. Signup and view all the answers

What describes organizational learning?

The continuous process of enhancing understanding of the organization Signup and view all the answers

What does 'ambiguous information' imply in decision-making?

Information interpreted in conflicting ways. Signup and view all the answers

What does a learning organization aim to maximize?

Creativity and organizational learning Signup and view all the answers

What type of information deficiency occurs when the outcomes of a decision cannot be determined?

Uncertainty Signup and view all the answers

Which condition primarily promotes individual creativity?

Opportunity to experiment and learn from mistakes Signup and view all the answers

In the context of decision-making, what is a consequence of incomplete information?

It can result in unpredictable outcomes. Signup and view all the answers

What is a key characteristic of brainstorming in group creativity?

All alternatives must be listed before evaluating them Signup and view all the answers

What aspect of creativity is emphasized in decision making?

The ability to discover original and novel ideas Signup and view all the answers

What is the key difference between the Classical and Administrative models of decision making?

One assumes optimal decisions while the other accepts satisfactory ones. Signup and view all the answers

How should feedback be given to promote creativity?

By providing constructive feedback Signup and view all the answers

Study Notes

Chapter 5: Decision Making, Learning, and Creativity

Decision Making: Managers respond to opportunities and threats by analyzing options and determining organizational goals and courses of action.

Learning Objectives

Understand managerial decision-making, distinguishing between programmed and non-programmed decisions. Non-programmed decisions are complex and uncertain.
Managers consider six steps for optimal decision-making
Recognize how cognitive biases can lead managers to poor decisions.
Identify the advantages and disadvantages of group decision-making and techniques to improve it.
Understand the roles of organizational learning and creativity in enhancing decision quality.

Programmed Decisions

Routine, automatic decisions following established rules or guidelines.
Managers have made similar decisions repeatedly.
Rules and guidelines based on past decisions are followed.

Non-programmed Decisions

Nonroutine decisions for unusual and unpredictable opportunities/threats, e.g. developing new technology, starting a new business, entering a new market.

Decision Making: Intuition vs. Reasoned Judgment

Intuition: A quick decision based on feelings, beliefs, and hunches, requiring minimal effort and information gathering.
Reasoned judgment: A thoughtful decision that takes time and careful information gathering, alternative generation, and evaluation.

The Classical Model

A prescriptive model assuming the decision-maker can identify and evaluate all possible choices and their consequences
Decision-makers should choose the option leading to the best outcome for the organization

The Administrative Model

Practical approach explaining why decision-making may be uncertain and risky
Managers often opt for satisfactory instead of optimum decisions
Bounded rationality and incomplete information are influential factors.
Satisficing is a term that reflects making a satisfactory decision instead of an optimal one.

Incomplete Information

Uncertainty and Risk: Uncertainty involves unknown probabilities of future outcomes, while Risk involves known probabilities.
Ambiguous Information: Information that can be interpreted in multiple and conflicting ways.
Time Constraints and Information Costs: Time and money limitations hinder comprehensive information gathering.

Satisficing

Choosing an acceptable, satisfactory solution rather than an optimal one.

Steps in the Decision-Making Process

Recognizing the need for a decision.
Generating alternatives.
Assessing alternatives.
Choosing among alternatives.
Implementing the chosen alternative.
Learning from feedback

Evaluation Criteria

Practical considerations.
Economic feasibility.
Ethical considerations

Learning from Feedback

Comparing actual results to expected outcomes.
Understanding unmet expectations.
Developing future decision-making guidelines.

Cognitive Biases

Heuristics: Rules of thumb based on experience, simplifying decision-making.
Systematic Errors: Repeated errors leading to poor decisions.
Examples of biases (e.g. confirmation bias, representativeness heuristic).

Group Decision Making

Advantages: Superior to individual decision-making as it can minimize biases, leverage combined skills, improve alternative generation, and allow for more information processing.
Disadvantages: Groupthink can occur, resulting in an overemphasis on achieving consensus and ignoring dissenting viewpoints or information.

Groupthink

A pattern of faulty and biased decision-making in groups.
Group members strive for consensus and ignore alternative viewpoints.

Techniques for Avoiding Groupthink

Devil's advocacy: Critical analysis of the favored option.
Encouraging diversity: Diverse teams are less susceptible to groupthink.

Organizational Learning

The process of improving employee understanding and ability to manage the organization and its environment.
It involves creativity and learning in a context of an organization.

Learning Organizations

Maximizing individual and group creativity and potential for organizational learning improvement.

Senge's Principles for a Learning Organization

Develop of personal mastery
Build complex and challenging mental models
Promote team learning
Build shared visions
Encourage system thinking

Creativity

A decision-maker's ability to develop original and novel ideas for feasible alternative courses of action.

Promoting Individual Creativity

Opportunity for new idea generation
Opportunity to learn from errors
No punishment for radical ideas
Constructive feedback

Promoting Group Creativity

Brainstorming: generating many alternatives without evaluation.
Nominal Group Technique: individuals generate ideas in silence, are then discussed and rank ordered.
Delphi Technique: group members respond in writing to questions.

Product Champions and Skunkworks

Product Champion: Manager who takes ownership and provides leadership for a project from idea to customer.
Skunkworks: A separate group dedicated to developing new products to encourage innovative thinking.

Studying That Suits You

Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

Description

Explore key concepts of decision making, learning, and creativity in managerial contexts from Chapter 5. Understand the distinctions between programmed and non-programmed decisions, the steps for effective decision-making, and the impact of cognitive biases on outcomes. Learn to enhance decision quality through organizational learning and creativity.