Questions and Answers
What does a Management Snapshot illustrate?
What is Decision Making?
The process by which managers respond to opportunities and threats by analyzing options and making determinations.
What characterizes Programmed Decision Making?
It is a routine, virtually automatic process where rules or guidelines are applied to familiar situations.
What is Non-programmed Decision Making?
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Intuition is based on __________.
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The Classical Model specifies how decisions should be made.
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What is an Optimum Decision?
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What does the Administrative Model explain?
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Which of the following is a reason why information is incomplete?
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What is satisficing?
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The first step in the six-step decision-making process is to __________.
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What role do entrepreneurs play?
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Define Social Entrepreneur.
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What is Organizational Learning?
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Which of the following refers to improving the ability of individuals and groups to think creatively?
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The final step in the six-step decision-making process is to __________.
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What is the Delphi technique?
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The Classical Model assumes decision makers have access to all information needed for optimum decisions.
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What is the pattern of faulty decision making due to team agreement known as?
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Managers should emphasize common mental models to create a learning organization.
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What are skunkworks?
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Study Notes
Management Overview
- Management Snapshot reflects the ongoing challenges in decision making and learning for managers, impacting organizational effectiveness.
Decision Making
- Decision making involves analyzing options to respond to organizational goals, improving performance for stakeholders.
Programmed and Non-programmed Decisions
- Programmed Decision Making consists of routine, automatic processes based on established rules for repetitive situations, e.g., ordering office supplies.
- Non-programmed Decision Making is required for unique situations where no pre-existing rules apply.
Intuition and Decision Models
- Intuition refers to quick decisions based on feelings and beliefs, requiring minimal effort or analysis.
- Classical Model provides a theoretical framework for optimal decision making, based on simplifying assumptions about processes.
Optimal Decision
- An optimum decision is the best choice considering the most favorable outcomes for the organization.
Administrative Model
- The Administrative Model acknowledges uncertainty in decision making, explaining why managers often settle for satisfactory decisions rather than optimal ones, based on:
- Bounded rationality
- Incomplete information
- Satisficing
Bounded Rationality
- Bounded rationality reflects cognitive limitations affecting information processing and decision-making ability.
Incomplete Information
- Incomplete information arises from:
- Unknown alternatives
- Uncertain consequences
- Time restrictions and costs associated with information gathering
Risk and Uncertainty
- Risk involves known possible outcomes with assignable probabilities, while uncertainty refers to unpredictability in decision contexts.
Ambiguous Information
- Ambiguous Information can be interpreted in conflicting ways, complicating decision making.
Constraints in Decision Making
- Time Constraints and Information Costs hinder thorough analysis, limiting the ability to evaluate all possible solutions.
Satisficing
- Satisficing is the practice of seeking a satisfactory solution rather than the ideal one.
Decision-Making Process Steps
- Recognizing the decision need and generating alternatives are foundational steps in structured decision-making.
Entrepreneurial Roles
- Entrepreneurs identify opportunities and mobilize resources for innovation, while social entrepreneurs focus on addressing social issues.
- Intrapreneurs innovate within existing organizations, enhancing products and processes.
Organizational Learning
- Organizational Learning aims to enhance employees' abilities to understand and manage their environment effectively, thus improving performance.
Learning Organization
- A Learning Organization encourages creativity to maximize individual and group potential, fostering a culture of continuous learning.
Senge's Principles
- Five principles for cultivating a Learning Organization:
- Develop personal mastery
- Build complex mental models
- Promote team learning
- Create a shared vision
- Encourage systems thinking
Decision-Making Techniques
- The Delphi technique involves anonymous written responses to questions, facilitating structured decision making.
Groupthink
- Groupthink is a faulty decision-making pattern where team members prioritize consensus over accurate analysis of information.
Skunkworks
- Skunkworks are groups of intrapreneurs separated from standard operations to focus on innovative product development.
Importance of Mental Models
- Managers must highlight the use of a common mental model to effectively frame problems and drive organizational learning.
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Description
This quiz explores the fundamental concepts in management decision making. It covers programmed and non-programmed decisions, as well as the role of intuition and decision models in achieving organizational effectiveness. Test your understanding of these essential management principles.