Questions and Answers
What type of decisions are made based on pre-established rules, procedures, and policies of an organization?
Routine Decisions
Who formulated the key steps in the decision-making process?
Terry
Which type of decision deals with organizational objectives and policy matters?
Strategic Decisions
What is the third activity in Simon & March's decision-making process?
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Which decision-making model presupposes that there is one best outcome?
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What is the last step in Terry's decision-making process?
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What is the main characteristic of a Rational Decision Model?
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Which type of decision is made for unprecedented situations?
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What is a key assumption of the Rational Decision Model?
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What is a limitation of the Rational Decision Model?
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What is the name of the model that Herbert Simon proposed as an alternative to the Rational Decision Model?
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What type of rationality is concerned with the selection of preferred behavior alternatives in terms of some system of values?
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What type of rationality is oriented towards organizational goals?
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What did Herbert Simon reject as being based on unrealistic assumptions?
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What is a characteristic of the Consciously rational type of rationality?
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What is a difference between Objectively rational and Subjectively rational?
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What type of decisions are made to deal with novel and unstructured affairs?
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Which of the following is a characteristic of Programmed Decisions?
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What is the technique used in Modern Decision Making for Programmed Decisions?
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Who classified decisions into Organizational and Personal Decisions?
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What type of decisions can be delegated to others?
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What type of decisions involve reflections on past situations and repeating past decisions?
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Who enumerated the classifications of decision as Generic and Unique Decisions?
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What is the main difference between Programmed and Non-programmed Decisions?
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Study Notes
Types of Decisions
- Unique decisions: new decisions made to resolve unprecedented situations
- Routine decisions: made for day-to-day operations, based on pre-established rules and procedures, decision-making power delegated to middle and lower levels
- Strategic decisions: made for organizational objectives and policy matters, non-routine, made by top-level management
Decision-Making Process
- Defining the problem
- Finding alternatives
- Selecting alternatives and getting feedback
- Finalizing one alternative
- Terry's (1956) steps:
- Determine the problem
- Acquire general background information and viewpoints
- State the best course of action
- Investigate and evaluate alternatives
- Make the decision and implement it
- Institute follow-up and modify if necessary
- Simon & March's (1960) four activities:
- Intelligence Activity
- Design Activity
- Choice Activity
- Evaluating Activity
Decision-Making Models
Rational Decision Model
- Assumes one best outcome, optimizing decision-making model
- Factors in objectivity and logic instead of subjectivity and intuition
- Goal: identify a problem, pick a solution, and find an answer
- Assumptions:
- Consider every option
- Know future consequences of each decision
- Utility (value) associated with each outcome
Limitations of the Rational Model
- Requires a great deal of time and information
- Assumes rational, measurable criteria are available and agreed upon
- Assumes accurate, stable, and complete knowledge of alternatives, preferences, goals, and consequences
- Personal factors (beliefs, values, education, and intellectual capacity) influence decision-making
Simon's Bounded Rationality Model
- Herbert Simon's work on "Administrative Behavior" (1947) rejected the rationality model
- Rationality is concerned with selecting preferred behavior alternatives in terms of a system of values
- Types of rationality:
- Objectively rational
- Subjectively rational
- Consciously rational
- Deliberately rational
- Organizationally rational
- Personally rational
Types of Decisions
- Programmed decisions: repetitive and routine, made using standard procedures
- Non-programmed decisions: novel and unstructured, require judgement and creativity
- Organizational decisions: can often be delegated, made for the organization's goals
- Personal decisions: cannot be delegated, made for individual goals
- Generic decisions: repeat past decisions based on past experiences
- Unique decisions: made for unprecedented situations
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Description
This quiz covers the different types of decisions in management, including unique, routine, and strategic decisions. Learn about the characteristics and importance of each type.
