Management: Decision-Making Process - Chapter 6
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Questions and Answers

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

  • Defining the decision
  • Selecting an alternative
  • Identifying the problem (correct)
  • Evaluating the decision

    • When does a problem become a problem for a manager?

  • When the manager has authority
  • When there is pressure to solve it (correct)
  • When it is economical to resolve
  • When the company's policy allows it

    • In the context provided, what is the final step in the decision-making process?

  • Defining the problem
  • Implementing the decision (correct)
  • Identifying the criteria
  • Selecting an alternative

    • What defines a problem in the decision-making context?

    <p>A lack of desired state of affairs</p> Signup and view all the answers

    What is the primary action in step 2 of the decision-making process?

    <p>Developing alternatives</p> Signup and view all the answers

    In the scenario provided, why does Sarah need new laptops for her sales reps?

    <p>Old laptops are outdated and inadequate</p> Signup and view all the answers

    What type of decision-making condition involves limited information that prevents estimation of outcome probabilities?

    <p>Uncertainty</p> Signup and view all the answers

    In decision-making, a situation in which the manager can make an accurate decision because the outcome of every alternative choice is known is referred to as:

    <p>Certainty</p> Signup and view all the answers

    What type of decision-making condition involves the manager being able to estimate the likelihood (probability) of outcomes?

    <p>Risk</p> Signup and view all the answers

    What is a common situation in decision-making where limited information forces managers to rely on intuition and gut feelings?

    <p>Uncertainty</p> Signup and view all the answers

    Which term refers to a situation in decision-making where the decision maker can estimate the likelihood of certain outcomes?

    <p>Risk</p> Signup and view all the answers

    In decision-making, what is the guideline that helps in making decisions?

    <p>Policy</p> Signup and view all the answers

    What are decision criteria?

    <p>Factors important to resolving the problem</p> Signup and view all the answers

    Why is assigning weights to decision criteria important?

    <p>To place the items in the correct priority order of their importance</p> Signup and view all the answers

    What is the purpose of developing alternatives in decision making?

    <p>To list without evaluation options that can resolve the problem</p> Signup and view all the answers

    How is an alternative appraised in the decision-making process?

    <p>Based on its ability to simplify the issues identified in previous steps</p> Signup and view all the answers

    In the selection of an alternative, what is the primary deciding factor?

    <p>The alternative with the highest total weight</p> Signup and view all the answers

    Why do decision criteria receive different weights?

    <p>To align them in order of relevance for the decision-making process</p> Signup and view all the answers

    What is the main difference between a rule and a policy?

    <p>Rules specifically state what should be done, while policies establish general parameters.</p> Signup and view all the answers

    When it comes to decision-making, what do unstructured problems entail?

    <p>Unstructured problems are new or unusual, with ambiguous or incomplete information.</p> Signup and view all the answers

    In the context of decision-making, what do nonprogrammed decisions refer to?

    <p>Decisions that are unique and nonrecurring.</p> Signup and view all the answers

    Why do policies require interpretation compared to rules?

    <p>Policies establish general parameters, while rules specifically state what to do.</p> Signup and view all the answers

    What does a policy aim to achieve in decision-making?

    <p>General guidelines for making decisions about structured problems.</p> Signup and view all the answers

    How do rules contribute to rapid decision-making in an organization?

    <p>By specifically stating what can or cannot be done, enabling supervisors to act swiftly.</p> Signup and view all the answers

    What is the term used to describe a situation in which the decision maker is able to estimate the likelihood of certain outcomes?

    <p>Risk</p> Signup and view all the answers

    Which decision-making style involves a person's preference for using external data and facts and processing information through rational, logical thinking?

    <p>Linear thinking style</p> Signup and view all the answers

    What bias involves fixating on initial information and ignoring subsequent data in decision-making?

    <p>Anchoring effect</p> Signup and view all the answers

    Which bias involves holding unrealistically positive views of oneself and one's performance?

    <p>Overconfidence bias</p> Signup and view all the answers

    In decision-making, what is the term used for choosing alternatives that offer immediate rewards and avoid immediate costs?

    <p>Immediate Gratification Bias</p> Signup and view all the answers

    Which style of decision-making involves a person's preference for internal sources of information and processing that information with internal insights, feelings, and hunches?

    <p>Nonlinear thinking style</p> Signup and view all the answers

    Study Notes

    Decision-Making Process

    • The first step in the decision-making process is recognizing a need for a decision.
    • A problem becomes significant for a manager when it disrupts operations or requires immediate action to avoid negative consequences.
    • The final step in the decision-making process is evaluating the effectiveness of the chosen alternative and making necessary adjustments.

    Defining Problems and Decision-Making Conditions

    • A problem in decision-making is defined as a discrepancy between the current situation and a desired state.
    • Limited information that restricts the estimation of outcome probabilities indicates a state of uncertainty.
    • Certain decision-making conditions allow for accuracy in decisions since the outcome of each alternative choice is known, classified as certainty.
    • Conditions where a manager can estimate the likelihood of various outcomes are categorized as risk.
    • A common decision-making situation where limited information is available often leads managers to rely on intuition or gut feelings.

    Decision Criteria and Alternatives

    • Decision criteria are the specific factors used to evaluate alternatives during the decision-making process.
    • Assigning weights to decision criteria is critical as it prioritizes the importance of each factor, guiding better decision-making.
    • Developing alternatives serves the purpose of exploring different solutions and enhancing the chances of making the best choice.
    • Alternatives are appraised based on how well they meet established decision criteria and their potential effectiveness.

    Factors in Selection and Weighting

    • The primary deciding factor in selecting an alternative is how well it aligns with the weighted decision criteria.
    • Decision criteria receive different weights due to varying levels of impact on the overall decision or organizational goals.
    • A rule is a specific guideline for behavior or action, while a policy is a broader directive that requires interpretation to apply appropriately.

    Problem Types and Decision-Making Styles

    • Unstructured problems entail unique, complex situations that do not have clear solutions or established guidelines.
    • Nonprogrammed decisions refer to choices made in response to novel situations, often requiring tailored approaches.
    • Policies necessitate interpretation because they are more general than rules, which outline specific actions.
    • Policies aim to achieve consistent decision-making aligned with organizational objectives.

    Decision-Making Efficiency

    • Rules facilitate rapid decision-making by providing clear guidelines that eliminate ambiguity in common scenarios.
    • A situation where the decision maker can estimate the likelihood of outcomes is termed risk.
    • The analytical decision-making style favors external data, facts, and rational, logical processing of information.
    • Anchoring bias involves fixating on initial information while disregarding later data that could alter perception.
    • Self-serving bias refers to an unrealistic, overly positive self-assessment or view of performance.

    Immediate Rewards and Intuitive Decision-Making

    • Choosing alternatives that provide immediate rewards while avoiding immediate costs is known as opting for instant gratification.
    • The intuitive decision-making style relies on personal insights, feelings, and hunches, emphasizing internal sources of information.

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    Description

    Test your knowledge on the eight steps in the decision-making process as described in Chapter 6 of 'Management: Second Arab World Edition' by Robbins, Coulter, Sidani, and Jamali. This quiz covers the definition of decision-making and the detailed process involving identifying problems, criteria, and making choices.

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