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