Module 9: Improving Decision Making

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Questions and Answers

What is the primary purpose of the 'Intelligence' stage in the decision-making process?

To design various potential solutions

To understand and identify problems within the organization (correct)

To implement the chosen solution

To evaluate the effectiveness of a previously chosen solution

Which stage involves choosing among different solution alternatives?

Implementation

Design

Choice (correct)

Intelligence

What characterizes high-velocity automated decision making?

Decision-making processes are controlled entirely by computer algorithms (correct)

Decisions are made by humans after extensive discussion

Solutions are limited to predefined ranges of options

Decisions are evaluated in real-time by managers

Which of the following best defines 'accuracy' in decision making?

The decision accurately reflects the reality of the situation Signup and view all the answers

What does 'coherence' mean in the context of quality decision making?

Decisions made can be explained through a rational process Signup and view all the answers

In decision-making, what does comprehensiveness refer to?

A decision that considers a full range of facts and circumstances Signup and view all the answers

What determines whether the decision-making process can be appealed to a higher authority?

Due process Signup and view all the answers

Which of the following is NOT a characteristic of quality decision making?

Over-reliance on gut feelings without data Signup and view all the answers

What type of decisions are characterized by having a definite procedure for handling them?

Structured decisions Signup and view all the answers

What is typically true about semi-structured decisions?

They involve only part of the problem having a clear-cut answer. Signup and view all the answers

Which decision type requires the most judgment from the decision maker?

Unstructured decisions Signup and view all the answers

Which of the following is NOT a characteristic of structured decisions?

Require substantial judgment Signup and view all the answers

What impact does improving hundreds of thousands of small decisions have on a business?

It can add up to a significant annual value. Signup and view all the answers

In a situation where competitive bids from major suppliers need identifying, which decision level is most likely involved?

Strategic level Signup and view all the answers

Which of the following decision types would most likely involve significant uncertainty for the decision maker?

Unstructured decisions Signup and view all the answers

What is the primary consideration for making quality decisions?

The decision-making process stages Signup and view all the answers

Study Notes

Module 9: Improving Decision Making

Module 9 focuses on improving decision-making processes.
Key questions include: different types of decisions, how decisions are made, and considerations for quality decisions.
Improved decision-making has measurable business value.
Decisions at all levels, even seemingly small ones, add up to significant annual value.

Business Value of Improved Decision Making

The value of improved decision-making is measurable.
Decisions are made at all levels of the organization.
While individual decisions might have a small impact, collectively, they generate substantial annual value.

Example: Business Value of Enhanced Decision Making

Various examples showcase the financial impact of improved decision-making.
Different roles, such as accounts manager, call center management, inventory managers, and senior management, make decisions with different frequencies and impacts on the company.
Specific examples include allocating support, predicting call center demand, deciding inventory levels, identifying competitive bids, and scheduling production.
Values are given for each decision.

Types of Decisions

Structured: Repetitive and routine, with defined procedures.
Semi-structured: Parts of the problem have clear-cut answers using procedures.
Unstructured: Novel, important, non-routine, and require judgment.

Information Requirements of Key Decision-Making Groups in a Firm

A hierarchy illustrates the decision-making authority levels within an organization.
Groups with higher responsibility face increasingly unstructured decision-making challenges.
Senior management handles unstructured, complex decisions affecting budgets and market entry, while operational management deals mostly with more structured actions and routine decisions.

The Decision-Making Process Stages

The decision-making process has four key stages:
- Intelligence: Discovering, identifying, and understanding organizational problems.
- Design: Identifying and exploring various solutions.
- Choice: Choosing among solution alternatives.
- Implementation: Making the chosen alternative work, monitoring effectiveness, and adjusting as needed.

Stages in Decision Making (additional info from the diagram)

The process is cyclical, allowing for revisiting stages to fix issues
Includes problem/solution discovery and analysis, choosing a solution, testing the solution, and making further improvements.

High-Velocity Automated Decision Making

In high-velocity environments, humans are increasingly eliminated from the decision-making process.
Computer algorithms handle the process, offering quick, predefined solutions.
Decisions are made faster than humans can monitor and control.

Quality of Decisions and Decision Making

Accuracy: Decisions reflect reality.
Comprehensiveness: Decisions consider all relevant facts.
Fairness: Decisions account for the concerns of all parties.
Speed/Efficiency: Decisions are made quickly and efficiently.
Coherence: Decisions are based on rational processes and can be explained.
Due Process: Decisions are made through a known process and can be challenged.

Learning Objectives Covered

The objectives for understanding decision-making include describing different decision types, explaining the decision-making process, and detailing considerations for quality decisions.

Quick Review – True or False (Information from the last two slide images)

Repetitive/routine are semi-structured, not structured.
Entering a new market can involve a structured decision for the company in the example given.
Decision process has stages, which are revisited when necessary.
High-velocity automated decision-making solutions don't need a random selection process; predefined acceptable choices exist, and accuracy/fairness are critical for quality decisions.

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Description

This quiz covers Module 9, focusing on the processes involved in improving decision-making within an organization. It discusses the different types of decisions, methodical approaches to making quality decisions, and highlights the measurable business value gained from effective decision-making practices. Explore how decisions at all organizational levels contribute to significant outcomes.