Managerial Decision Making Overview
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Questions and Answers

What defines programmed decisions?

  • They require extensive group discussions before making a choice.
  • They are based on well-understood criteria. (correct)
  • They lack clear guidelines for reaching a solution.
  • They are entirely new and innovative solutions.

What is a potential advantage of using groups for decision-making?

  • Groups simplify the decision-making process.
  • Groups require less time to reach a consensus.
  • Groups can offer more knowledge and diverse perspectives. (correct)
  • Groups naturally avoid conflicts.

Which of the following describes a barrier to effective managerial decision-making?

  • Limited access to comprehensive information. (correct)
  • Ability to process all available information.
  • Overwhelming support from team members.
  • Having a clear outline for decision-making.

How can managers improve the quality of nonprogrammed decisions?

<p>By following the decision-making process steps and engaging others. (C)</p> Signup and view all the answers

What is a characteristic of managerial decision-making?

<p>It often involves time constraints and incomplete information. (C)</p> Signup and view all the answers

What is groupthink, in the context of decision-making?

<p>A phenomenon where the desire for harmony in a group leads to poor decision-making. (C)</p> Signup and view all the answers

Which approach supports evidence-based decision-making?

<p>Collecting data and research to inform decisions. (D)</p> Signup and view all the answers

What role does a devil's advocate serve in group decision-making?

<p>To challenge the status quo and prevent groupthink. (B)</p> Signup and view all the answers

What is a potential consequence of failing to involve diverse stakeholders in decision-making processes?

<p>Narrower range of alternatives (A)</p> Signup and view all the answers

What psychological bias may affect a colleague's decision-making when they disregard opposing viewpoints?

<p>Confirmation bias (B)</p> Signup and view all the answers

In group decision-making, why is it beneficial to assign someone to play the devil's advocate?

<p>To challenge existing ideas (C)</p> Signup and view all the answers

Which factor is cited as contributing to the appeal of vinyl records?

<p>Nostalgia and emotional connections (C)</p> Signup and view all the answers

What might hinder the continued sales growth of vinyl records in the future?

<p>High capital investment for new presses (C)</p> Signup and view all the answers

Which types of diversity should organizations strive for beyond gender?

<p>Diversity in racial, ethnic, and knowledge perspectives (C)</p> Signup and view all the answers

In what way does group decision-making often enhance the process?

<p>It allows for more diverse input and perspectives (D)</p> Signup and view all the answers

What research should be considered before investing in new vinyl presses?

<p>Environmental impact of vinyl production (D)</p> Signup and view all the answers

What is often a significant misunderstanding regarding the appeal of vinyl records?

<p>Vinyl is attractive solely because of its physical format (C)</p> Signup and view all the answers

What is a potential negative effect of groupthink in decision-making?

<p>Increases the likelihood of poor decisions (D)</p> Signup and view all the answers

What is confirmation bias?

<p>The propension to focus on information that supports one's beliefs (C)</p> Signup and view all the answers

Which type of conflict is considered potentially beneficial for decision-making?

<p>Process conflict (C)</p> Signup and view all the answers

What is satisficing in the context of decision-making?

<p>Selecting the first acceptable solution without further investigation (B)</p> Signup and view all the answers

Which technique can help reduce groupthink in decision-making groups?

<p>Utilizing a devil's advocate (D)</p> Signup and view all the answers

Why do managers with more experience tend to make better decisions?

<p>They have developed greater expertise through learning (A)</p> Signup and view all the answers

What is one potential disadvantage of group decision-making?

<p>Conflict among group members (A)</p> Signup and view all the answers

What is the purpose of using heuristics in decision-making?

<p>To save time by using mental shortcuts (B)</p> Signup and view all the answers

What does groupthink refer to in decision-making groups?

<p>Members avoiding voicing dissent to maintain harmony (C)</p> Signup and view all the answers

Which situation requires the use of a more structured decision-making process?

<p>Nonprogrammed decisions with higher stakes (A)</p> Signup and view all the answers

What is a benefit of incorporating diverse perspectives in group decision-making?

<p>Increased chances of finding unique solutions (C)</p> Signup and view all the answers

What should managers consider when making nonprogrammed decisions?

<p>The ethical implications of their actions (B)</p> Signup and view all the answers

What often occurs when one individual has more power in a group decision-making scenario?

<p>Suppression of dissenting opinions (A)</p> Signup and view all the answers

What does relationship conflict involve?

<p>Attacks on individuals rather than ideas (A)</p> Signup and view all the answers

What characterizes managerial decision-making?

<p>Complexity, incomplete information, and time constraints (B)</p> Signup and view all the answers

What is an example of programmed decisions?

<p>Choosing a vendor from a pre-established list of preferred suppliers (B)</p> Signup and view all the answers

What is a common barrier to effective decision-making faced by managers?

<p>Cognitive overload and data processing limitations (A)</p> Signup and view all the answers

Which system is primarily associated with quick decision-making?

<p>Reactive decision-making system (C)</p> Signup and view all the answers

What does the term 'confirmation bias' refer to?

<p>Selective attention to information that supports pre-existing beliefs (C)</p> Signup and view all the answers

How can managers improve the quality of group decision-making?

<p>Assigning a devil's advocate to challenge group consensus (D)</p> Signup and view all the answers

What is satisficing in decision-making?

<p>Selecting the first acceptable option rather than the best one (B)</p> Signup and view all the answers

Why might a manager face challenges in making nonprogrammed decisions?

<p>They often require additional research and information gathering (D)</p> Signup and view all the answers

What can lead to ineffective group decision-making?

<p>Groupthink and suppressed dissent (D)</p> Signup and view all the answers

When are reflective decision-making processes most beneficial?

<p>For significant, important decisions that require careful thought (D)</p> Signup and view all the answers

Which of the following enhances a manager's decision-making skills over time?

<p>Building expertise through time and experience (C)</p> Signup and view all the answers

What is a potential negative outcome of poor decision-making?

<p>Adverse effects on the organization and stakeholders (A)</p> Signup and view all the answers

What is a key characteristic of nonprogrammed decisions?

<p>They are novel and lack clear guidelines for solutions (A)</p> Signup and view all the answers

What characterizes the reflective decision-making system?

<p>It is logical and analytical. (A)</p> Signup and view all the answers

When are programmed decisions most appropriate?

<p>When the decisions are repeated over time. (A)</p> Signup and view all the answers

Which of the following barriers to effective decision-making involves a reluctance to change course once a decision has been made?

<p>Escalation of commitment (D)</p> Signup and view all the answers

What does emotional intelligence in decision-making help recognize and manage?

<p>The emotions of oneself and others (B)</p> Signup and view all the answers

Which type of decision requires thoughtful judgment due to ambiguous or incomplete information?

<p>Nonprogrammed decisions (A)</p> Signup and view all the answers

Which step of the decision-making process comes after generating multiple alternatives?

<p>Select an alternative (C)</p> Signup and view all the answers

What is the primary drawback of bounded rationality in decision-making?

<p>It prevents full understanding of all alternatives (C)</p> Signup and view all the answers

Which of the following is a characteristic of reactive decision-making?

<p>It is often based on impulse and intuition. (C)</p> Signup and view all the answers

How does uncertainty affect decision-making for managers?

<p>It can lead to indecision due to unknown outcomes. (D)</p> Signup and view all the answers

What can result from maximizing shareholder wealth at the expense of others?

<p>Short-sighted decision-making (C)</p> Signup and view all the answers

Which of the following is an aspect of effective decision-making?

<p>Balancing logic with emotional insight (B)</p> Signup and view all the answers

What type of decisions often utilizes heuristics?

<p>Programmed decisions (A)</p> Signup and view all the answers

Which aspect is most influenced by personal biases in decision-making?

<p>Familiarity with decision alternatives (C)</p> Signup and view all the answers

Flashcards

Managerial Decision-Making

Managerial decision-making involves the process of choosing among alternatives to solve problems or achieve organizational goals.

Characteristics of Managerial Decisions

Decision-making in organizations often involves complex situations with incomplete information and time pressures. Usually there isn't one perfect solution.

Decision-Making Systems

The brain uses two main systems for decision-making: a logical, reflective system for careful analysis, and a quick, reactive system for instinctual responses.

Programmed vs. Nonprogrammed Decisions

Programmed decisions are based on well-defined criteria and past experience, while nonprogrammed decisions deal with new and unclear situations.

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Barriers to Effective Decision-Making

Barriers to good decision-making include limited information, cognitive biases, and organizational politics.

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Heuristics and Satisficing

Heuristics are mental shortcuts that simplify complex decisions, while satisficing involves choosing a satisfactory solution rather than searching for the optimal one.

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Group Decision-Making Benefits and Challenges

Groups can bring more knowledge, diverse perspectives, and a wider range of options to decision-making, but they can also be affected by groupthink, conflict, or dissent.

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Improving Group Decision-Making

Managers can improve group decision-making by promoting diversity, assigning a devil's advocate, and addressing personality conflicts.

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Decision-making

The act of considering possible choices and selecting one. It involves analyzing options, weighing consequences, and ultimately making a choice.

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Reflective decision-making

This system is logical, thoughtful, and takes time. It is best for significant and crucial decisions.

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Reactive decision-making

This system is fast, instinctive, and reacts quickly to situations. It's useful for quick decisions or when expertise and experience are key.

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Programmed decisions

Decisions based on established criteria and procedures. Solutions are predictable because there's a clear pattern.

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Nonprogrammed decisions

Decisions that require unique solutions because there are no established procedures or clear guidelines. These decisions demand critical thinking and analysis.

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Confirmation Bias

The tendency to pay attention to information that confirms pre-existing beliefs and disregard contradictory information.

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Heuristics

Using experience to make decisions quickly, often based on prior knowledge and patterns.

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Satisficing

Choosing the first acceptable option rather than searching for the optimal solution.

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Advantages of group decision-making

Groups have more knowledge, diverse perspectives, and generate more options, improving decision quality.

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Disadvantages of group decision-making

Groupthink, conflict, and suppression of dissent can hinder group decision-making effectiveness.

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Evidence-based decision-making

Actively gathering information and evidence to support a decision.

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Critical evaluation of decision outcomes

Considering the long-term effects and ethical implications of a decision.

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Devil's advocate

A person in a group assigned to challenge the dominant viewpoint and encourage critical thinking.

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Creating a diverse group

Ensuring diverse group members with different backgrounds and expertise are included in decision-making.

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Decision-Making with Good Options

Making decisions when there are multiple good options, where the best choice isn't clear.

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Decision-Making with Bad Options

Making decisions when all options are bad, but you have to choose the least harmful one.

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Ethical Decision-Making

Decisions that involve potential harm to others, raising ethical questions about what's right and wrong.

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Maximizing Shareholder Wealth

A common justification for prioritizing short-term profits over the well-being of others, often overlooking long-term consequences.

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Bounded Rationality

The idea that our ability to be fully rational in decision-making is limited by factors like complexity and incomplete information.

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Escalation of Commitment

The tendency to stick with a bad decision even when it's clear it's not working, often leading to worse outcomes.

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Emotional Intelligence

The ability to understand and manage your own emotions and the emotions of others effectively.

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Personal Bias

A bias where we tend to favor things, ideas, or people that are similar to us or that we are familiar with.

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Recognizing the Need for a Decision

The first step in the decision-making process, recognizing that there is a problem or opportunity.

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Generating Alternatives

An important step in making a good decision, where various options are explored.

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Process Conflict

A type of conflict that focuses on finding the best way to accomplish a task, often leading to positive outcomes as diverse perspectives are considered.

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Relationship Conflict

A type of conflict involving personal attacks and hostility, detrimental to a group's effectiveness.

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Decision-Making Process

A systematic process for making nonprogrammed decisions, involving identifying the problem, gathering information, considering alternatives, and evaluating outcomes.

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Decision Tree

Visual representation of possible decision paths and their consequences, useful for considering ethical implications.

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Diverse Perspectives

The positive outcome of having a group of diverse individuals participate in the decision-making process, leading to richer insights.

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Brainstorming

A technique used in group decision-making where individuals freely generate ideas without criticism or evaluation.

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Groupthink

A phenomenon where group members suppress their doubts or disagreement for the sake of harmony, leading to poor decision-making.

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Groupthink

A psychological tendency in groups that leads to conformity, where members suppress dissenting opinions to maintain group harmony.

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Divergent Thinking

The process of considering different perspectives, ideas, and approaches, even when those views are different from one's own.

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Suppression of Dissent

The suppression of dissent, where those with differing views are discouraged from expressing them, leading to a skewed decision-making process.

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Decision Implementation

The stage in decision-making where the chosen option is put into action, involving planning, resource allocation, and implementation.

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Ethical Implications

The ability to make decisions that consider the ethical implications and impact on individuals and society.

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Decision Evaluation

Assessing the effectiveness of a chosen decision after implementation, evaluating its outcomes and identifying areas for improvement.

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Critical Thinking

The process of systematically analyzing and evaluating information to reach a well-informed decision based on evidence and logical reasoning.

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Diversity of Thought

Including a diverse range of individuals with varying backgrounds, skills, experiences, and perspectives in decision-making processes.

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Study Notes

Managerial Decision Making

  • Managerial decisions significantly impact organizations and stakeholders
  • Decisions often involve complexity, incomplete information, and time constraints
  • No single "right" answer is usual; sometimes, multiple good(or bad) options exist
  • Managers must weigh consequences and consider multiple stakeholder needs
  • Ethical considerations are crucial in decision-making

Decision-Making Systems

  • Brain processes information using two systems
    • Reflective system (logical, rational) for significant decisions
    • Reactive system (quick, intuitive) for urgent situations
    • Experience often enhances reactive system speed
  • Emotional intelligence fosters effective decision-making

Decision Types

  • Programmed decisions: Based on well-understood criteria, rules, and guidelines
    • Often quicker to make due to established procedures and heuristics
  • Nonprogrammed decisions: Novel situations, lack clear solutions
    • Require more time, research, and creative/analytical approaches

Barriers to Effective Decision-Making

  • Bounded rationality: Limited information processing capacity
  • Incomplete information: Inability to gather all relevant data
  • Time constraints: Limited time to collect and process information
  • Uncertainty: Difficulty predicting outcomes before implementing decisions
  • Escalation of commitment: Persistence with ineffective decisions
  • Personal bias: Preconceived notions influencing decision-making
    • Confirmation bias: Focusing on confirming beliefs
  • Conflict: Challenges to reaching consensus through process or relationship conflict

Improving Individual Decision-Making

  • Expertise increases with time and experience
  • Use heuristics and satisficing for programmed decisions
  • Employ systematic process for nonprogrammed decisions
  • Evidence-based decision-making: Research-driven decisions
  • Ethical consideration and long-term outcomes are paramount

Group Decision-Making

  • Groups can leverage diverse perspectives and knowledge
  • Groups often generate more solutions and options
  • Groupthink and dissent suppression can hinder quality decisions
  • Diverse group composition for enhanced decision quality
  • Devil's advocate can counteract groupthink biases
  • Conflict management necessary, particularly personal or relationship conflict

Decision-Making Process

  • Recognize the need for decision
  • Generate alternatives
  • Analyze alternatives
  • Select alternative
  • Implement the decision
  • Evaluate effectiveness

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Description

Explore the complex landscape of managerial decision-making, where decisions impact organizations and stakeholders. This quiz covers the two distinct decision-making systems, types of decisions, and the importance of ethical considerations. Test your knowledge on both programmed and nonprogrammed decision types.

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