Podcast
Questions and Answers
The first stage in the decision-making process is Design.
The first stage in the decision-making process is Design.
False
Quality decisions should reflect a full consideration of the facts and circumstances.
Quality decisions should reflect a full consideration of the facts and circumstances.
True
High-velocity automated decision-making does not require predefined ranges of acceptable solutions.
High-velocity automated decision-making does not require predefined ranges of acceptable solutions.
False
Repetitive and routine decisions are classified as structured decisions.
Repetitive and routine decisions are classified as structured decisions.
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Speed in decision-making refers to the efficiency with respect to time and resources.
Speed in decision-making refers to the efficiency with respect to time and resources.
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Improving numerous small decisions can significantly benefit a business.
Improving numerous small decisions can significantly benefit a business.
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Structured decisions are characterized by a defined procedure and are treated as new each time.
Structured decisions are characterized by a defined procedure and are treated as new each time.
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When a solution fails, one should always restart from the Choice stage.
When a solution fails, one should always restart from the Choice stage.
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Semi-structured decisions have clear-cut answers provided by accepted procedures.
Semi-structured decisions have clear-cut answers provided by accepted procedures.
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The CEO of Rubber Ducky Inc.'s decision to enter the market for Rubber Swans is an unstructured decision.
The CEO of Rubber Ducky Inc.'s decision to enter the market for Rubber Swans is an unstructured decision.
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Coherence in decision-making means the decision can be easily explained to others.
Coherence in decision-making means the decision can be easily explained to others.
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Unstructured decisions require the decision maker to apply judgment and are often novel.
Unstructured decisions require the decision maker to apply judgment and are often novel.
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The value of a single improved decision always outweighs the value of improving multiple small decisions.
The value of a single improved decision always outweighs the value of improving multiple small decisions.
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The decision-making process includes several stages that help guide decision makers.
The decision-making process includes several stages that help guide decision makers.
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All decisions made in a firm are of equal importance and value.
All decisions made in a firm are of equal importance and value.
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Identifying competitive bids requires a decision from senior management and occurs infrequently.
Identifying competitive bids requires a decision from senior management and occurs infrequently.
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Study Notes
Module 9: Improving Decision Making
- Module 9 is about improving decision-making.
- Key topics include different types of decisions, the decision-making process, and considerations for quality decisions.
- The value of improved decision-making can be quantified and added up for the business.
Business Value of Improved Decision Making
- The value of improved decision-making can be measured at all levels of an organization (a firm).
- Although value of improving an individual decision may be small, improving numerous decisions across the organization adds up to the overall value for the business.
Example: Business Value of Enhanced Decision Making
- These examples show how various business decisions have financial impact on a firm:
- Allocating support to most valuable customers: Financial impact - $1,200,000
- Predicting call center daily demand Financial Impact - $600,000
- Deciding parts inventory level daily Financial Impact - $1,825,000
- Identifying competitive bids Financial Impact - $2,000,000
- Scheduling production to fill orders Financial Impact - $1,500,000
Types of Decisions
- Structured decisions: Repetitive and routine, follow a definite procedure. They don't need to be treated as new.
- Semi-structured decisions: Only part of the problem has a clear-cut answer from accepted procedures.
- Unstructured decisions: Decision-makers must use judgments to solve problems; these are novel, important, non-routine. There is no well-understood or agreed-upon procedure for these kinds of decisions.
Information Requirements of Key Decision-Making Groups in a Firm
- A pyramid structure demonstrates how different levels of management (senior, middle, and operational management) have different information needs for their respective decisions:
- Senior management: Unstructured decisions (e.g., deciding market entry/exit strategies).
- Middle management: Semi-structured decisions (e.g., developing departmental budgets).
- Operational management: Structured decisions (e.g., restocking inventory).
- Individual employees and teams make structured decisions.
The Decision-Making Process Stages
- Intelligence: Discovering, identifying, and understanding problems in the organization
- Design: Identifying and exploring various solutions
- Choice: Choosing among solution alternatives
- Implementation: Making the chosen solution work, and monitoring its effectiveness.
- Stages can be repeated as the solution is evaluated.
High-Velocity Automated Decision Making
- Humans are not involved in the decision-making process.
- Computer algorithms make the decisions.
- There are predefined ranges for accepted solutions, which speeds up the process.
- Decisions made faster than managers can monitor and control (e.g., Google search).
Quality of Decisions and Decision Making
- Accuracy: Decisions reflect reality.
- Comprehensiveness: Decisions fully consider all facts and circumstances.
- Fairness: Decisions reflect concerns of affected parties.
- Speed (efficiency): Decisions efficiently use time and resources.
- Coherence: Decisions are rational, understandable, and can be explained to others.
- Due process: Decisions are made following a known process, allowing appeals to higher authorities.
Learning Objectives Covered
- Describe different types of decisions
- Explain the decision-making process
- Describe considerations for making quality decisions
Quick Review - True or False
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Repetitive and routine decisions are semi-structured.
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Entering a new market is a structured decision.
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Implementing a decision is not necessarily the last stage of the process.
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If a decision fails, one can revisit earlier steps to make changes.
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In High-Velocity Automated decision making, the range of acceptable solutions is not necessarily random.
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Google search uses High-Velocity Automated Decision Making.
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Accuracy is a key element in high-quality decision-making. Accuracy means decisions reflect a rational process that can be explained to others.
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Fairness is another key component in high-quality decisions, reflecting the interests of affected parties.
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Description
This quiz focuses on Module 9, which emphasizes enhancing decision-making skills within organizations. It covers the types of decisions, the decision-making process, and how quality decisions can add significant value to a business. Explore various examples that demonstrate the financial impact of improved decision-making.
