Questions and Answers
What is a devil's advocate?
A person who argues against a position to encourage critical thinking and debate.
Which innovative decision-making technique involves breaking people into subgroups to express competing points of view regarding the decision?
Point-Counterpoint
Which innovative decision-making technique refers to avoiding the suppression of contrary opinions in a desire for harmony?
Avoid Groupthink
Which innovative decision-making technique refers to knowing when to stop investing time and money in a failing decision?
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Which innovative decision-making technique is a disciplined procedure for managers to review the results of decisions?
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What is the definition of 'choice made from available alternatives'?
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What is the process of identifying problems and opportunities and then resolving them?
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What are the two categories of management decisions?
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What decision category does the decision to reorder supplies fall into?
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What decision category do new product developments and entering new markets fall into?
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Every decision situation can be organized on a scale according to the availability of information and the possibility of failure. The four positions on the scale are __________.
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What does 'certainty' mean in decision making?
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What is the definition of 'risk' in decision making?
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What is 'uncertainty' in decision making?
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What does 'ambiguity' refer to in decision making?
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What is a 'wicked decision problem'?
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What decision-making model is based on rational economic assumptions?
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What are the four assumptions of the Classical Model?
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How is the Classical Model of decision making described?
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Which decision-making model describes how managers actually make decisions?
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What concepts did Herbert A. Simon propose that shaped the administrative model?
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What does 'bounded rationality' mean?
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Managers must ________, meaning they choose the first alternative that satisfies minimal decision criteria.
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What is the definition of intuitive decision making?
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What is the political model of decision making?
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What is the primary focus of the decision-making process?
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What are the six steps of the Decision-Making Process?
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What decision style is characterized by preference for simple, clear-cut solutions?
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What are the four main decision styles?
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What decision style involves considering complex solutions based on data?
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What decision style involves a broad analysis but is socially oriented?
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What decision style is used by managers with a deep concern for others?
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List reasons why managers make bad decisions.
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What is 'anchoring bias'?
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What is the 'sunk cost effect'?
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What is 'confirmation bias'?
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What innovative decision-making technique involves spontaneous suggestion of alternatives?
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What is 'electronic brainstorming'?
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What does 'evidence-based decision making' involve?
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Who challenges the assumptions made by the group during decision making?
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Study Notes
Decision Making Fundamentals
- A decision is a choice made from available alternatives.
- Decision making is the process of identifying problems and opportunities and resolving them, requiring effort before and after the choice.
Categories of Decisions
- Management decisions fall into two main categories: programmed and nonprogrammed.
- Programmed decisions deal with recurring organizational problems, such as reordering supplies when inventories drop to a specific level.
- Nonprogrammed decisions respond to unique, poorly defined situations with significant consequences, like developing new products or entering new markets.
Decision Conditions
- Decision situations can range from certainty, risk, uncertainty, to ambiguity.
- Certainty involves complete information: programmed decisions can be made.
- Risk features known goals, but with uncertain outcomes: information is available to estimate probabilities.
- Uncertainty lacks complete information: reliance on creativity, judgment, and experience is necessary.
- Ambiguity presents unclear goals, undefined alternatives, and unavailable outcome information, leading to wicked decision problems.
Decision Making Models
- The Classical Model is prescriptive, based on rational economic assumptions guiding ideal decision-making.
- Four assumptions of the Classical Model include well-defined problems, certainty in decision-making, known criteria for evaluating alternatives, and rational decision-making to maximize organizational goals.
- The Administrative Model describes how managers actually make decisions under complex situations, acknowledging human limitations.
- Herbert A. Simon's concepts of bounded rationality and satisficing emphasize limits on rationality and choosing the first satisfactory solution.
Decision-Making Process
- Steps include recognizing the need for a decision, diagnosing and analyzing causes, developing alternatives, selecting the desired alternative, implementing it, and conducting evaluation and feedback post-decision.
Decision Styles
- Directive Style focuses on clear-cut solutions with quick decisions based on existing rules.
- Analytical Style bases decisions on thorough data analysis and objective reasoning.
- Conceptual Style involves broad information consideration and creative problem-solving.
- Behavioral Style emphasizes social interaction and understanding individuals' feelings about decisions.
Common Decision-Making Pitfalls
- Initial impressions can lead to anchoring bias, where prior information disproportionately influences future judgments.
- Justifying past decisions may create a sunk cost effect where further resources are committed to failing projects.
- Confirmation bias occurs when managers favor information that aligns with their existing beliefs, ignoring contradictory evidence.
- Emotional influences and overconfidence can impair judgment and lead to poor decision outcomes.
Innovative Decision-Making Techniques
- Brainstorming encourages a broad range of alternatives in a group setting.
- Electronic brainstorming uses technology for group problem-solving.
- Evidence-based decision making commits to examining biases and rigorously analyzing available evidence.
- A devil's advocate challenges group assumptions to prevent premature consensus.
- Point-counterpoint introduces rigorous debate by breaking the group into subgroups with opposing views.
Post-Decision Strategies
- Avoiding groupthink encourages open discussion without suppressing contrary views.
- Escalating commitment highlights the need to recognize when to cease investing in unproductive decisions.
- Conducting after-action reviews allows managers to evaluate decisions and improve future processes.
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Description
Test your knowledge on decision making concepts in Chapter 9. This quiz covers key terms such as decisions, decision making processes, and types of management decisions. Ideal for students looking to reinforce their understanding of management principles.