Chapter Five PDF

09/12/2024, 14:06 OneNote Chapter five Thursday 5 December 2024 12:58 p.m. Content revised for exam as per the revision lecture. - look at slide pre revision P165&166...

09/12/2024, 14:06 OneNote Chapter five Thursday 5 December 2024 12:58 p.m. Content revised for exam as per the revision lecture. - look at slide pre revision P165&166 Decision making(process) 📌 Decision making; the selection of a particular course of action from among alternatives There are 2 main types of decisions making; 1. Programmed decisions Well structured Routine Info available ST Decision rules and set procedures used 2. Non-programmed decisions Poorly structured New Little info LT Judentment and creativity used Decision making conditions Certainly -> risk -> uncertainty The decision making process? (6 steps) 1. Problem identification and diagnosis 2. Identification of alternative solution 3. Evaluating alternatives 4. Choice of alternatives 5. Implementing the decision 6. Evaluating the decision Barriers to making good decisions Psychological barriers 📌 Illusion of control; belief that one can influence events even who one has no control over what will happen 📌 Discount the future; weigh short-term costs and benefits more heavily than long term ones Time pressure barriers 📌 Rationality; process that’s logical and objective, whereby managers gather information objectively, evaluate available evidence, consider all alternatives and make choices that lead to the best outcome for the organisation Approaches to decision making 1. The rational model Decisions are consistent and value-maximising and made against background of ‘perfect’ information Assumptions of rationality, manager must; Be objective and logical Carefully define a problem Have a clear ans specific goal Select the alternative that is most likely to achieve the goal Make decision in firms best economic interests 2. Bounded rationality model Managers have to apply a less than perfect form of rationality Intuition snd judgement required 3. Political model Concentrates on the impact of organisational politics sources of power in organisations Legitimate Reward Expert Coercive 4. Escalation of commitment model Why people continue to fail a failing course of action Poor decision making escalates after initial decision Self justification/preservation Group vs individual decision making? Diversity of groups facilitate better quality decisions Advantages | Disadvantages 1. Larger pool of info | one person dominates 2. More perspectives/approaches | satiaficing rather than maximising (levelling effect) 3. Intellectual stimulation | goal displacement 4. People understand decision, more likely to commit | group decisions can take longer Characteristics of groupthink 1. Overestimation of the group 2. Close-mindedness 3. Pressures toward uniformity Improving group decision making 1. Brainstorming 2. Delphi technique 3. Nominal grouping https://ulcampus-my.sharepoint.com/:o:/r/personal/24430455_studentmail_ul_ie/_layouts/15/Doc.aspx?sourcedoc=%7B159535c2-d156-49e1-b289-b4f85e2ae4e… 1/2