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?

It overcomes pressures for conformity Signup and view all the answers

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

Stimulating creative decision-making when there's discord Signup and view all the answers

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

Ignoring the impact of the decision Signup and view all the answers

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

Revisit the initial stages of the decision-making process Signup and view all the answers

When is brainstorming most effective?

When generating numerous novel ideas on a specific problem Signup and view all the answers

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

Uncertainty Signup and view all the answers

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

To provide a guideline for strategy selection Signup and view all the answers

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

Risk can be quantified, while uncertainty cannot Signup and view all the answers

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

The relative advantages and disadvantages of each alternative Signup and view all the answers

Creative decision-making often requires which of the following?

A willingness to embrace new ideas and imagination Signup and view all the answers

What does ambiguity in decision making imply?

Goals and alternatives are unclear and not well defined Signup and view all the answers

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

It involves collaboration and input from multiple stakeholders Signup and view all the answers

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

Collecting written expert opinions to reach a consensus Signup and view all the answers

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

Make a final choice Signup and view all the answers

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

Possibility of groupthink affecting decisions Signup and view all the answers

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

All ideas are presented simultaneously for visibility. Signup and view all the answers

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

Decisions may suffer from a lack of clarity and decisiveness. Signup and view all the answers

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

It allows for enhanced communication of decisions. Signup and view all the answers

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

Group decision-making involves sharing various viewpoints. Signup and view all the answers

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

A tendency for group members to avoid conflict by conforming Signup and view all the answers

What does effective implementation of a decision require?

Clear communication of the decision and its rationale. Signup and view all the answers

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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Description

Explore the essential aspects of decision making in management through this quiz on Chapter 3 of MGT162. Understand different types of decisions, the characteristics that influence decision making, and the processes involved. Test your knowledge on programmed and non-programmed decisions and their implications.