MGT162 Chapter 3: Decision Making

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Questions and Answers

What is a key aspect of effective implementation of a decision?

  • Focusing solely on maximizing profits
  • Sensitivity to those who are not affected by the decision
  • Proper planning and consideration of necessary resources (correct)
  • Evaluating the decision after implementation only if it fails

Which decision-making technique primarily focuses on generating ideas without immediate evaluation?

  • Brainstorming (correct)
  • Cost-benefit analysis
  • Nominal Group Technique (NGT)
  • Consensus building

When should a manager collect information on the impact of a decision?

  • During the decision-making process exclusively
  • After a decision has been made and evaluated (correct)
  • Only before making a decision
  • After the implementation phase

What is one reason brainstorming is effective?

<p>It overcomes pressures for conformity (C)</p> Signup and view all the answers

What does the Nominal Group Technique (NGT) focus on?

<p>Stimulating creative decision-making when there's discord (A)</p> Signup and view all the answers

What is NOT a part of the decision-making process?

<p>Ignoring the impact of the decision (A)</p> Signup and view all the answers

What should a manager do if a decision appears inappropriate after evaluation?

<p>Revisit the initial stages of the decision-making process (C)</p> Signup and view all the answers

When is brainstorming most effective?

<p>When generating numerous novel ideas on a specific problem (A)</p> Signup and view all the answers

Which term describes a condition where a decision maker has neither certainty nor reasonable probabilities about outcomes?

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

In the decision-making process, what is the primary purpose of defining objectives?

<p>To provide a guideline for strategy selection (C)</p> Signup and view all the answers

What is the major difference between risk and uncertainty in decision making?

<p>Risk can be quantified, while uncertainty cannot (D)</p> Signup and view all the answers

When evaluating alternatives in the decision-making process, what should decision makers assess?

<p>The relative advantages and disadvantages of each alternative (A)</p> Signup and view all the answers

Creative decision-making often requires which of the following?

<p>A willingness to embrace new ideas and imagination (C)</p> Signup and view all the answers

What does ambiguity in decision making imply?

<p>Goals and alternatives are unclear and not well defined (C)</p> Signup and view all the answers

Which of the following best describes the group decision-making technique?

<p>It involves collaboration and input from multiple stakeholders (C)</p> Signup and view all the answers

What is the primary function of the Delphi technique in decision-making?

<p>Collecting written expert opinions to reach a consensus (D)</p> Signup and view all the answers

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

<p>Make a final choice (D)</p> Signup and view all the answers

Which of the following is a disadvantage of group decision-making?

<p>Possibility of groupthink affecting decisions (C)</p> Signup and view all the answers

Which statement about the recording of ideas in group decision-making is true?

<p>All ideas are presented simultaneously for visibility. (C)</p> Signup and view all the answers

What is a likely outcome of compromise decisions in group decision-making?

<p>Decisions may suffer from a lack of clarity and decisiveness. (B)</p> Signup and view all the answers

What advantage does group decision-making provide compared to individual decision-making?

<p>It allows for enhanced communication of decisions. (A)</p> Signup and view all the answers

What is a key factor that differentiates group decision-making from individual decision-making?

<p>Group decision-making involves sharing various viewpoints. (A)</p> Signup and view all the answers

In the context of decision-making, what does the term 'groupthink' refer to?

<p>A tendency for group members to avoid conflict by conforming (D)</p> Signup and view all the answers

What does effective implementation of a decision require?

<p>Clear communication of the decision and its rationale. (B)</p> Signup and view all the answers

Flashcards

Decision Implementation

The process of putting a decision into action, considering the impacts on those affected and necessary resources.

Monitoring & Evaluating Decisions

Assessing the effectiveness of a decision by observing its impact and taking further action if needed or if the decision is inappropriate.

Brainstorming

A group technique to generate many ideas without evaluating them, focusing on creativity and free association.

Nominal Group Technique (NGT)

A structured decision-making method to stimulate creativity when agreement is lacking or knowledge incomplete; prioritizes and collects opinions.

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Decision Making

A process involving examining facts, assessing information, and selecting the best course of action.

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Group Decision Making

Techniques for making decisions with a group of people, like brainstorming and nominal group technique.

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Effective Implementation

Putting a decision into effect successfully, considering those affected and required resources.

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Sufficient Information

Adequate information needed to make an informed decision.

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Uncertainty

A situation where the decision-maker lacks complete knowledge about the problem and cannot determine the probabilities of different outcomes.

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Risk

The decision-maker has some information about the potential outcomes, but not enough to accurately predict which outcome will occur.

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Ambiguity

A situation where the goals, alternatives, and information about outcomes are unclear, making it difficult to assess the likelihood of different outcomes.

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Identify & Diagnose

The initial stage of decision-making where managers review relevant data, both internal and external, to identify and understand the problem.

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Establish Objectives

Defining the desired results or outcomes for the decision, including both the quantity and quality of the desired results.

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Generate Alternatives

Coming up with different possible courses of action or strategies to solve the identified problem.

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Evaluate Alternatives

Assessing the advantages and disadvantages of each potential alternative, considering their consequences and impact.

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Make the Choice

Selecting the most appropriate alternative based on the evaluation and analysis of the options.

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Delphi Technique

A method using experts to make predictions without face-to-face meetings. It involves gathering written opinions through surveys, providing feedback, and refining predictions through multiple rounds.

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Delphi Technique: Goal

To reach a consensus among experts on a particular topic by iteratively gathering their opinions and providing feedback.

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Delphi Technique: Process

  1. Experts provide initial opinions through surveys. 2. Feedback is provided to experts based on collective responses. 3. Experts refine their opinions based on feedback. 4. This process continues until a consensus emerges.
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Delphi Technique: Advantages

It leverages expertise and diverse perspectives without groupthink or dominance by individuals. It aids in reaching a consensus and is more objective than individual predictions.

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Delphi Technique: Disadvantages

It's time-consuming and requires commitment from experts. It may not be suitable for complex issues requiring immediate decisions.

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Groupthink

A phenomenon where group members prioritize harmony over critical thinking, leading to poor decisions. Individuals may suppress dissenting opinions to maintain unity.

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Groupthink: Consequences

Groups prone to groupthink may make flawed decisions, miss crucial information, and fail to challenge assumptions due to suppression of dissenting opinions.

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Preventing Groupthink

Encourages a culture of open communication, encourages dissent, assigns devil's advocate roles, and focuses on critical evaluation of ideas, not simply agreement.

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Study Notes

Chapter 3: The Nature of Decision Making (MGT162)

  • Decision making is the process through which managers identify and resolve problems, and capitalize on opportunities.
  • It's also the process of selecting a course of action to address a specific issue.

Topic Outlines

  • Definition of decision making
  • Types of decision making
    • Programmed decisions: Structured decisions with past patterns, rules, or guidelines. Usually repetitive and routine (e.g., rules & regulations).
    • Non-programmed decisions: Unstructured, requiring higher-level management. Deal with unique, unusual or exceptional problems (e.g., Government response to a pandemic).
  • Characteristics of decision making
  • Decision making process
  • Group decision making

Definition of Decision Making

  • Decision making is a process through which managers identify and resolve problems, and capitalize on opportunities.
  • A course of action is selected as the way to deal with a specific problem.

Types of Decision Making

  • Programmed decisions are structured, based on past experience, and use rules or guidelines when a situation repeats.
  • Non-programmed decisions are unstructured and require higher-level management. They handle unusual, unpredictable situations and unique problems.

Types of Condition under Decision

  • Certainty: Enough information to predict the outcome precisely. Decision-makers know alternatives, conditions and outcomes.
  • Uncertainty: Lack of complete knowledge of the problem or probabilities of alternative outcomes. Decision-makers cannot estimate outcomes.
  • Risk: Future conditions are unknown, but estimates of likelihood can be made based on experience or secondary information.
  • Ambiguity: Goals and problem definition are unclear, alternatives are hard to define, and outcome information is unavailable making probability estimates highly subjective.

Decision Making Process

  • Managers review data related to their responsibilities (internal and external).
  • They recognize problems needing solutions.
  • Objectives, both quantity and quality, need to be specified.
  • Managers consider strategic options (alternatives).
  • Creativity and imagination are employed.
  • Input from others who have worked on similar problems is sought.
  • The value and relative advantages/disadvantages of each alternative are assessed and the resulting effects of each option are predicted.
  • Making a final decision—choices based on careful judgments of facts and availability of information; the best alternatives are chosen.

Implementing Decisions

  • When decisions involve taking actions or making changes, ways to enact these changes are essential.
  • Key implementation factors: sensitivity to those affected, proper planning, and resources.
  • Monitoring and evaluating how well the chosen option is performing to adapt to changing conditions.

Group Decision Making Techniques

  • Brainstorming: Group generates many ideas without immediate evaluation.
  • Nominal Group Technique (NGT): Structured process to stimulate creative decisions; ideas are presented individually before discussion and evaluation to limit biases.
  • Delphi Technique: Experts provide opinions about future events in written form, allowing collective insights without face-to-face meetings, and creating a consensus.

Group Decision Making Advantages

  • More information and knowledge
  • More alternatives
  • More acceptance of decisions
  • Enhanced communication and feedback
  • Better decisions

Group Decision Making Disadvantages

  • The process is longer and costlier than individual decision making.
  • Compromise decisions can result.
  • One person can dominate the discussion.
  • Groupthink can occur.

Leadership and Decision-Making

  • Inability to make decisions is a major reason for executive failure.
  • Superior decision-making skills are a significant indicator of strong leadership.

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