Podcast
Questions and Answers
What is the initial step in the decision-making process?
What is the initial step in the decision-making process?
- Selection of an alternative
- Analysis of alternatives
- Identification of a problem (correct)
- Allocation of weights to criteria
Which of the following best describes a 'problem' in the context of decision making?
Which of the following best describes a 'problem' in the context of decision making?
- A discrepancy between an existing and a desired state of affairs. (correct)
- A situation where information is readily available.
- A scenario with multiple equally attractive solutions.
- A condition where all objectives are being met.
During which stage of the decision-making process would a manager assign numerical values to different criteria?
During which stage of the decision-making process would a manager assign numerical values to different criteria?
- Analyzing alternatives
- Developing alternatives
- Allocating weights to criteria (correct)
- Identifying decision criteria
What does the 'implementing an alternative' step involve in the decision-making process?
What does the 'implementing an alternative' step involve in the decision-making process?
What is the primary purpose of evaluating decision effectiveness?
What is the primary purpose of evaluating decision effectiveness?
Which of the following describes the 'anchoring effect' in decision making?
Which of the following describes the 'anchoring effect' in decision making?
What is the 'hindsight bias' in the context of decision-making errors?
What is the 'hindsight bias' in the context of decision-making errors?
Which bias is most evident when a manager favors information that reaffirms their prior beliefs, even when presented with contradictory evidence?
Which bias is most evident when a manager favors information that reaffirms their prior beliefs, even when presented with contradictory evidence?
A manager continues to invest in a failing project, even after repeated setbacks. Which decision-making error does this exemplify?
A manager continues to invest in a failing project, even after repeated setbacks. Which decision-making error does this exemplify?
A manager consistently attributes successes to their own skills while blaming failures on external factors. Which bias is most likely at play?
A manager consistently attributes successes to their own skills while blaming failures on external factors. Which bias is most likely at play?
Which approach to decision making relies on choices that are consistent and maximize value within specific constraints?
Which approach to decision making relies on choices that are consistent and maximize value within specific constraints?
What is the central idea behind 'bounded rationality' in decision making?
What is the central idea behind 'bounded rationality' in decision making?
What does 'satisfice' mean in the context of bounded rationality?
What does 'satisfice' mean in the context of bounded rationality?
What is 'escalation of commitment' in the context of decision-making?
What is 'escalation of commitment' in the context of decision-making?
Which decision-making approach relies on feelings, past experiences, and accumulated judgment?
Which decision-making approach relies on feelings, past experiences, and accumulated judgment?
A manager makes a quick decision based on a gut feeling developed from years of experience. Which type of decision-making is this?
A manager makes a quick decision based on a gut feeling developed from years of experience. Which type of decision-making is this?
What is a 'structured problem' in managerial decision-making?
What is a 'structured problem' in managerial decision-making?
Which type of problem is characterized by being new, unusual, and having ambiguous or incomplete information?
Which type of problem is characterized by being new, unusual, and having ambiguous or incomplete information?
Which type of decision can be handled using a routine approach?
Which type of decision can be handled using a routine approach?
A company facing a completely new market disruption needs a custom-made solution. What type of decision is required?
A company facing a completely new market disruption needs a custom-made solution. What type of decision is required?
In what type of decision-making condition is the decision maker most able to predict the outcome of their choice?
In what type of decision-making condition is the decision maker most able to predict the outcome of their choice?
Which decision-making condition involves a situation in which the probabilities of various outcomes are known?
Which decision-making condition involves a situation in which the probabilities of various outcomes are known?
What characterizes decision-making under conditions of 'uncertainty'?
What characterizes decision-making under conditions of 'uncertainty'?
Which of the following is an advantage of group decision making?
Which of the following is an advantage of group decision making?
What is a potential disadvantage of group decision making?
What is a potential disadvantage of group decision making?
What is 'groupthink'?
What is 'groupthink'?
Under what circumstances are groups generally most effective in decision-making?
Under what circumstances are groups generally most effective in decision-making?
Which technique is used to foster more creative group decision-making?
Which technique is used to foster more creative group decision-making?
How might national culture impact decision-making processes in organizations?
How might national culture impact decision-making processes in organizations?
What is the benefit of creativity in decision-making?
What is the benefit of creativity in decision-making?
What does 'design thinking' entail in the context of management?
What does 'design thinking' entail in the context of management?
How is 'Big Data' changing how managers make decisions?
How is 'Big Data' changing how managers make decisions?
Which of these actions are least likely to reduce groupthink and foster more objective decision making?
Which of these actions are least likely to reduce groupthink and foster more objective decision making?
A company is considering entering a completely new market that is geographically distant and culturally different from any they have experience with. Which of the following decision-making approaches is most suitable in this situation?
A company is considering entering a completely new market that is geographically distant and culturally different from any they have experience with. Which of the following decision-making approaches is most suitable in this situation?
An organization has long prided itself on rational decision-making. However, recent performance suggests decisions are consistently being made that yield poor results despite all objective criteria used to arrive at there decisions being logically valid. Which initiative are you least likely to introduce to help remedy this situation?
An organization has long prided itself on rational decision-making. However, recent performance suggests decisions are consistently being made that yield poor results despite all objective criteria used to arrive at there decisions being logically valid. Which initiative are you least likely to introduce to help remedy this situation?
What is the relationship, if any, between national culture and ethics in decision making?
What is the relationship, if any, between national culture and ethics in decision making?
Three project teams in parallel have produced the same analytical report on the same problem, all offering data-informed justification for different courses of action. What follow-up action is most likely to ensure the best decision is ultimately made?
Three project teams in parallel have produced the same analytical report on the same problem, all offering data-informed justification for different courses of action. What follow-up action is most likely to ensure the best decision is ultimately made?
Flashcards
What is a problem?
What is a problem?
A discrepancy between an existing and a desired condition.
Decision Criteria
Decision Criteria
Factors relevant in a decision; examples include price, model, size, manufacturer, options and repair record.
Weighting Criteria
Weighting Criteria
Assigning values to decision criteria based on importance.
Developing Alternatives
Developing Alternatives
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Analyzing Alternatives
Analyzing Alternatives
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Decision Implementation
Decision Implementation
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Evaluating the Decision
Evaluating the Decision
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Rational Decision Making
Rational Decision Making
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Satisfice
Satisfice
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Escalation of Commitment
Escalation of Commitment
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Intuitive Decision-Making
Intuitive Decision-Making
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Structured Problems
Structured Problems
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Unstructured Problems
Unstructured Problems
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Programmed Decisions
Programmed Decisions
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Non-programmed Decisions
Non-programmed Decisions
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Certainty
Certainty
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Risk
Risk
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Uncertainty
Uncertainty
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Groupthink
Groupthink
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Design Thinking
Design Thinking
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Big Data
Big Data
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Study Notes
The Decision-Making Process
- The decision-making process involves several steps including Identification of a Problem, Identification of Decision Criteria, Allocation of Weights to Criteria, Development of Alternatives, Analysis of Alternatives, Selection of an Alternative, Implementation of the Alternative, and Evaluation of Decision Effectiveness
Identifying a Decision Problem
- A problem is a discrepancy between an existing and a desired state of affairs
Identifying Decision Criteria
- Relevant factors include price, model, size, manufacturer, options and repair record
Weighting Criteria
- The most important criterion is assigned a weight of 10
- Other weights are assigned against this standard
Developing Alternatives
- Alternatives include Jeep Compass, Ford Focus, Hyundai Elantra, Ford Fiesta SES, Volkswagen Golf, Toyota Prius, Mazda 3 MT, Kia Soul, BMW i3, Nissan Cube, Toyota Camry, Honda Fit Sport MT
Analyzing Alternatives
- Alternatives are analyzed by evaluating their initial price, interior comfort, durability, repair record, performance and handling leading to a total score
Selecting the Best Alternative
- The best alternative is based on the assessment criteria (initial price, interior comfort, durability, repair record, performance, handling) multiplied by a criteria weight
Implementing the Decision
- Putting a decision into action is what decision implementation entails
Evaluating the Decision
- Decision evaluation consists of appraising the outcome of the decision
- It should be determined if the problem was resolved
Common Decision-Making Errors and Biases
- Examples include overconfidence, hindsight, self-serving bias, immediate gratification, anchoring effect, selective perception, sunk costs, confirmation bias, randomness, framing, representation, availability and revision
Decisions Managers Make
- Planning decisions involve determining long-term objectives, strategies to achieve them, short-term objectives and the difficulty of individual goals
- Leading decisions involve handling unmotivated employees, determining the most effective leadership style, assessing the impact of change on worker productivity and deciding when to stimulate conflict
- Organizing decisions involve determining the number of employees reporting to a manager, how much centralization should be in an organization, job design and when to implement a different structure
- Controlling decisions involve deciding what activities need controlling in the organization, determining how activities should be controlled, establishing when a performance deviation is significant and determining the best type of management information system
Rational Model
- Rational decision-making is based on consistent, value-maximizing choices within specified constraints
- Rationality is not a very realistic approach
Bounded Rationality
- Bounded rationality includes satisficing and escalation of commitment
- Offers a more realistic approach to decision-making
Intuitive Decision Making
- Intuition is based on values or ethics, past experiences, feelings or emotions, cognitive based skills, knowledge/training and subconscious mental processing
Types of Problems
- A structured problem is straightforward, familiar and easily defined
- An unstructured problem is new or unusual, with ambiguous/incomplete information
Types of Decisions
- Programmed decisions are repetitive and handled through a routine approach
- Nonprogrammed decisions are unique and nonrecurring, requiring a custom made solution
Problems, Decision Types, and Organizational Levels
- Unstructured problems are typically linked to nonprogrammed decisions and top organizational levels
- Structured problems are related to programmed decisions and lower organizational levels
Decision-Making Conditions
- These can be divided into Certainty, Risk and Uncertainty
How Do Groups Make Decisions?
- Groups make decisions through committees, task forces, review panels, and work teams
Advantages of Group Decision Making
- Diversity of experiences/perspectives
- More complete information
- More alternatives generated
- Increased acceptance of solution
- Increased legitimacy
Disadvantages of Group Decision Making
- Time-consuming
- Minority domination
- Ambiguous responsibility
- Pressures to conform
Groupthink
- Extensive pressure is exerted on an individual to withhold differing views
When Are Groups Most Effective?
- Individual decision-making means faster decision making and more efficient use of work hours
- Group decision-making entails more accurate, creative decisions, more heterogeneous representation and greater acceptance of the final solution
Improving Group Decision Making
- Brainstorming
- The nominal group technique
- Electronic meetings
Contemporary Issues
- National culture influences how decisions are made and the degree of risk involved
- Creativity lets a decision maker understand problems more fully, see problems others cannot and identify viable alternatives
- Design thinking is approaching management problems like design problems
- Big Data is vast amounts of quantifiable information analyzed through sophisticated data processing, changing how managers make decisions
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