Management chapter 7
Bounded rationality
- Ability to make rational decisions(limited by constraints, having to make a decision quickly)
Decision making
- choosing alternative courses of action
Group problem solving techniques
- consensus- making sure everyone agrees - brainstorming- to generate many ideas
Rational decision making
- explains how managers should make decisions - assumes managers will make logical decisions that will further the organization's interest
Intuition (when dealing with uncertainty)
- going with your gut feeling - making choice without use of conscious thought
When should we use a group decision?
- increase acceptance -increase development (learning)
What do managers need to know about groups and decision making?
- less efficient -their size affects decision quality - they may be too confident - knowledge counts
Satisficing Model
- making the best choice we can based on the info. we have
Evidence- based decision making
- treat org as an unfinished prototype - see your org as outsiders do -Not just for senior execs -you need to sell it - if all else fails, slow the speed of bad practice -diagnostic Q: what happens when people fail?
Non rational decision making
-Decision making is uncertain and risky, making it tough for managers to make optimal decisions
Group think
-group members strive to agree for the sake of unanimity and thus avoid accurately assessing the decision situation (almost like peer pressure)
Decision tree
A graph of decisions and possible consequences
Group decision making (advantages/disadvantages)
ADVANTAGES -greater pool of knowledge -Different perspectives -Better understanding of decision rationale - intellectual stimulation DISADVANTAGES - A few people dominate or intimidate -Groupthink
Three effective reactions
Importance - how high of a priority is this situation? Credibility - How believable is the information about the situation? Urgency - How quickly do I need to act on this situation?
Ethical dilemma tree
ineffective responses to a decision situation
7 rules for brainstorming
1. Defer judgement 2. Build on ideas of others 3. encourage wild ideas 4. Go for quantity over quality 5. Be visual 6. Stay focused on topic 7. One conversation at a time
Why is it hard to be evidence based?
1. there is too much evidence 2. not enough good evidence 3. evidence doesn't apply 4. people trying to mislead you 5. the side effects outweigh the cure 6. stories more persuasive
Defensive avoidance
manager can't find a good solution and follows by procrastinating, passing the buck, or denying the risk of any negative consequences
Relaxed avoidance
manager decides to take no action in the belief there will be no great negative consequences
Panic
manager is frantic to get rid of the problem that he can't deal with the situation realistically
Relaxed change
manager realizes that complete inaction will have negative consequences but opts for the first available alternative that involves low risk
Stages of rational decision making (classical model)
stage 1: identify the opportunity stage 2: think of alternatives stage 3: evaluate alternatives stage 4: implement what you think is the best choice