Podcast
Questions and Answers
Which of the following is NOT typically considered a direct element in the framework of decision-making situations?
Which of the following is NOT typically considered a direct element in the framework of decision-making situations?
- Organizing
- Planning
- Marketing (correct)
- Controlling
What is the primary difference between decisions that managers make?
What is the primary difference between decisions that managers make?
- The amount of time it takes to implement each decision.
- All decisions are equally important, regardless of their potential consequences.
- Some decisions are inconsequential, while others have significant impact. (correct)
- The types of resources affected by each decision.
Which level of management is most likely involved in making strategic decisions that have long-term implications for the company?
Which level of management is most likely involved in making strategic decisions that have long-term implications for the company?
- Middle Managers
- Top Managers (correct)
- First-Line Managers
- Non-managerial Employees
When is a high-involvement decision-making process most appropriate?
When is a high-involvement decision-making process most appropriate?
What role does domain-specific knowledge play in decision making?
What role does domain-specific knowledge play in decision making?
Under what circumstances are managers most likely to rely on intuitive decision making?
Under what circumstances are managers most likely to rely on intuitive decision making?
Which of the following best describes a decision based on heuristics?
Which of the following best describes a decision based on heuristics?
Which aspect of decision making is most closely related to ethical values?
Which aspect of decision making is most closely related to ethical values?
What is a critical consideration when implementing a group decision-making process?
What is a critical consideration when implementing a group decision-making process?
What is the initial step in the general approach to decision making, especially in high-involvement situations?
What is the initial step in the general approach to decision making, especially in high-involvement situations?
What is the primary distinction between decisions made under certainty and those made under uncertainty?
What is the primary distinction between decisions made under certainty and those made under uncertainty?
Which of the descriptions accurately defines a structured decision?
Which of the descriptions accurately defines a structured decision?
What is a key characteristic of unstructured decisions?
What is a key characteristic of unstructured decisions?
What is one key reason why biases are studied in the context of managerial decision making?
What is one key reason why biases are studied in the context of managerial decision making?
Which of the following best describes evidence-based management?
Which of the following best describes evidence-based management?
In the context of decision making, what does 'bounded rationality' refer to?
In the context of decision making, what does 'bounded rationality' refer to?
What role do emotions play in rational decision making?
What role do emotions play in rational decision making?
What is the primary aim of forecasting in the context of managerial decision-making?
What is the primary aim of forecasting in the context of managerial decision-making?
What is the primary goal of scenario planning in decision making?
What is the primary goal of scenario planning in decision making?
In the context of decision trees, how is uncertainty reflected?
In the context of decision trees, how is uncertainty reflected?
What is a potential advantage of group decision making?
What is a potential advantage of group decision making?
What is confirmation bias?
What is confirmation bias?
What is framing bias?
What is framing bias?
Which of the following is the correct order for a general approach to decision making?
Which of the following is the correct order for a general approach to decision making?
What is anchoring effect?
What is anchoring effect?
What is sunk costs bias?
What is sunk costs bias?
What is immediate gratification bias?
What is immediate gratification bias?
What is self-serving bias?
What is self-serving bias?
What is hindsight bias?
What is hindsight bias?
What is overconfidence bias?
What is overconfidence bias?
What is selective perception bias?
What is selective perception bias?
What is representation bias?
What is representation bias?
What is availability bias?
What is availability bias?
What is randomness bias?
What is randomness bias?
Flashcards
Consequences of Decisions
Consequences of Decisions
The consideration of the outcomes that may result from different choices.
Structured Decision
Structured Decision
A decision where there is a rule or policy in place to deal with a recurring issue.
Unstructured Decision
Unstructured Decision
A decision made in a situation with no established rules or procedures.
Bias
Bias
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Evidence-Based Management
Evidence-Based Management
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Forecasting
Forecasting
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Scenario Planning
Scenario Planning
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Decision Trees
Decision Trees
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Bounded Rationality
Bounded Rationality
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Advantages of Group Decision Making
Advantages of Group Decision Making
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Disadvantages of Group Decision Making
Disadvantages of Group Decision Making
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Study Notes
Decision Making in Management
- Managers must make various decisions and it's important to understand how these decisions are made and what affects them.
- A framework to analyze decision-making considers planning, controlling, organizing, and leading aspects.
Types of Decisions
- Considering the consequences of decisions is important.
- Some managerial decisions may not be consequential, while others can be very impactful.
One Decision Typology
- Decisions can be categorized under:
- Planning
- Controlling
- Organizing
- Leading
Decisions and Roles
- Different types of managers make different types of decisions.
Decision Classifications
- Decisions are also classified by level of involvement:
- High involvement
- Low involvement (routine decision making)
Experience and Knowledge
- Decision-making relies on both knowledge and experience.
- Using domain-specific knowledge and experience is useful.
Intuitive vs. Evidence-Based Decisions
- Intuitive decision-making uses heuristics
- Heuristics are based on rules or past experiences, suitable for routine decisions.
- Intuitive decisions are made under time constraints.
Influences on Intuition
- Intuition is influenced by:
- Past experiences.
- Ethical values and culture.
- Feelings or emotions.
- Data processed subconsciously.
- Cognitive skills, knowledge, and training.
Decision Approval and Collaboration
- Decisions may need approval, particularly for long-term or strategic matters.
- Discussions in meetings occur, often with emails, reports, and presentations.
- Group decision-making occurs when other departments are affected or have relevant experience.
- Diverse perspectives should be valued in decision making.
- Decision-makers may need convincing to gain support for new initiatives.
Influences on Decision Making
- Decision-making is influence by:
- Decision-maker characteristics
- The decision-making problem
General Approach to Decisions
- A general approach to decision-making, especially for high-involvement situations involves:
- Identifying the problem.
- Identifying relevant criteria
- Determining what factors are important.
- Generating alternatives.
- Narrowing alternatives.
- Evaluating alternatives carefully.
- Selecting an alternative.
- Implementing the selected alternative.
Decision Characteristics
- Key characteristics include:
- Degree of certainty versus uncertainty.
- Level of risk involved.
Structured vs. Unstructured Decisions
- Structured decisions involve familiar problems with established rules in place
- Algorithms or standard procedures can address them.
- Company policies, laws, or regulations guide these decisions.
- Unstructured decisions are the opposite of structured decisions.
- Involve new situations without precedents or rules.
- Require training employees to handle such situations.
The Role of Bias
- Bias needs consideration in decision-making for managers.
Evidence-Based Data
- Evidence-based management requires specific decisions.
- Evidence-based management involves collecting data or information to support decision-making.
- Researching options and gathering qualitative information is part of the process.
- Young employees typically collect data for these decisions, especially for new or strategic situations.
Forecasting
- Demand forecasting affects production decisions to avoid over or underproduction.
- Adjusting production to demand takes time or lead time.
- Forecasting involves:
- Predicting demand for new products or upgrades.
- Considering short-term versus long-term perspectives.
Planning and Decision Trees
- Scenario planning involves:
- Forecasting different potential scenarios.
- Evaluating strategies under each scenario to determine suitability or feasibility.
- In decision trees:
- Uncertainty is reflected in terms of probability.
- Changing probabilities identifies robust options.
Rationality and Consideration of Emotions
- Rationality integrates the emotions decision-makers and stakeholders.
- Rationality may involve considering how people feel, especially stakeholders affected by the decision.
Barriers to Effective Decision-Making:
- Bounded Rationality: Limited understanding of all options and information.
- Commitment: Reluctance to abandon a failing decision midway.
- Time Constraints: Limited time available for decision-making.
- Uncertainty and personal biases.
- Conflict: Personal or group conflicts during group decision-making.
Group Decision-Making:
- Advantages:
- Diverse opinions and brainstorming.
- Wider implications and feasibility consideration.
- Understanding resource commitments.
- Disadvantages:
- Conflicts of interest.
- Protection of personal projects.
- Ensuring everyone's views are heard.
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