MGMT3200

Which is more efficient: group or individual decision making? (consider both short term & long term efficiency)

long term- Group, short term - individual. more efficient

What does the traditional economic model assume about decision-makers?

managers seeks to maximize benefits, completely rational

How does satisficing differ from maximizing?

maximizing is knowing all alternatives and selecting the best, satisficing is a heuristic and you pick the first shortcut

Under what decision-making conditions do decisions get made in the behavioral (bounded) model?

mostly risk, but also uncertainty. traditional - prescriptive (certainty), behavioral - descriptive

Which decision-making condition is most difficult?

no probabilities

What is decision-making under conditions of certainty?

Managers know all available alternatives and the outcomes associated with each; 100% probability

What is satisficing?

Managers select the 1st alternative that meets a minimally acceptable standard rather than going through and evaluating all the alternatives and selecting the best one, can lead to maximizing situation

Where do you have greater creativity: 5 individuals generating ideas alone or those same 5 individuals generating ideas as a group?

5 individuals generating ideas/working alone has the most creativity

What is the optimal size for a decision making group?

5 or 7; odd-numbered so you can break the tie, smaller groups tend to have better group dynamics, friendlier group participation increases

What is a heuristic?

A labor saving device, a short cut, a rule of thumb

What is the key to making good decisions under risk?

Accurately determining the probabilities associated with each alternative

What's the problem with synectics?

As soon as a group member generates an idea, the technical expert evaluates the idea. Stifles creativity

Rank the following in terms of decision making accuracy: group, average individual in the group, & best member in the group?

Best, group, average member

What's the problem with this heuristic?

Causes us to miss opportunities and make mistakes; we use stereotypes and categories

What are the 4 rules in brainstorming?

Criticism is prohibited, "Freewheeling" is welcomed-free association; the more off the wall idea, the better, Based upon the idea of free association of ideas- first thing that pops into your head is your subconscious is more creative, Quantity is wanted, Combination and improvement are sought

What is the basic purpose of a brainstorming session?

Designed to generate solutions, not evaluate them, Involves a group of 7-9 people who are presented with a problem and are asked to identify as many potential solutions as possible

What is decision-making under conditions of uncertainty?

Don't know alternatives, their potential outcomes, or the probability of the outcomes occurrence

What are the defining characteristics of the Delphi technique?

Experts remain anonymous to one another, Questionnaires are used

What is group decision making a function of?

Group Decision Making = Individual Efforts/Contributions + Assembly Effect - Process Losses

How is NGT different from brainstorming & synectics?

It does not rely on free association of ideas (done individually), purposely restricts verbal interaction

What is the gambler's fallacy?

It is the mistaken belief that an event that has not occurred for some time is likely to occur in the near future

Is decision-making a separate function of management?

It's a part of all functions, most closely associated with planning

What is decision-making under conditions of risk?

Lack of certainty regarding outcomes of various alternatives, but an awareness of probabilities associated with their occurrence, Alternatives are known but outcomes are in doubt, Most common condition

What are the advantages of group decision making?

More information available to help solve the problem, Evaluation is superior because have wide range of viewpoints , Individuals who participate in decisions are more satisfied with the decision and are more likely to support it, Individuals get a better understanding of the decision that is made and it is easier for them to communicate the decision to their subordinates, Fulfills need for personal growth for some employees, Helps individuals learn new skills, Perceived as being more fair than decisions made by sole individuals, Participation in decision making reduces stress by lowering role ambiguity

Are ORT applicable to all decisions that managers make?

Most applicable to risk, 1st line managers. Least applicable to decisions made under uncertainty (top managers)

What is meant by the term "confirmatory bias" in decision-making?

Most people demonstrate the tendency to look for only confirming evidence rather than dis-confirming evidence after they have made a decision, results in stereotypes

Can inhibitions be totally eliminated in brainstorming sessions?

No, It is very difficult to totally eliminate the evaluation of ideas when they are generated, non-verbal communication and power differences among members

Is it irrational?

Not traditional, but not irrational because it may be sensible due to the limits of human processing

What's the difference between programmed & non-programmed decisions?

Programmed: specific procedures developed for repetitive and routine problems; 1st line managers. Non-programmed: specific to management problems that are novel, unique, complex and unstructured; top managers

What is the representativeness heuristic?

Reflects the tendency of managers to assess the likelihood of an occurrence by matching it with a preexisting category (i.e. stereotype); where managers use stereotypes (categories) in making judgments

What are operations research techniques?

Techniques useful as an aid in evaluating alternatives by making the evaluation more systematic

How does the negatively framing of a decision affect decision-making?

[i.e. in terms of a loss] -- risk-seeking (when people start to lose they take more risk trying to recoup their losses)

What are some problems that can be encountered when using the Delphi Technique?

The design of the questionnaire can limit the results obtained, time-consuming, member interest and motivation can decline

What in NGT does one try to eliminate to improve the decision-making process?

The negative aspect (inhibiting effects) of the group process

In making decisions, people often violate the law of large numbers. What does that mean? Why does it occur?

The type of thinking when individuals tend to ignore the implications of sample size and tend to attribute greater stability to results obtained from small samples than is reasonable. People often ignore the judgment advice of others when choosing between 2 objects and substitute their own initial impression as the sole basis for the choice because they don't recognize the importance of large numbers

Are ORT an aid or substitute for managerial decision-making?

They're an aid for managerial decision-making; however, they cannot replace the need for managers to think independently and to make judgments, only as good as the data they're based on

What is the reasoning behind the Delphi technique?

Tries to eliminate the group processes in creative problem solving as much as possible

What 3 things bound one's rationality?

limited mental capacity, emotional state, unforseeability of future events

What is bounded rationality?

Unable to grasp the full complexity of managerial decisions

What types of decisions are made irrationally?

Uncertainty, decisions with little information, non-programmed

What is the superhero technique?

Used to stimulate creativity (part of synectics), To help individuals overcome internal inhibitions resulting from traditional ways of perceiving and thinking

What is the availability heuristic?

Used when managers assess the frequency of an event by the degree to which those instances of that event are easily recalled in memory

How does the positively framing of a decision affect decision-making?

[i.e. in terms of a gain] -- risk-averse (avoidant)

Key element in decision making under conditions of risk is

accurately determining the probabilities associated with each alternative

What are the advantages of & disadvantages of heuristics?

advantages: time saving, they may produce more good decisions than bad. disadvantages: unaware we're adopting them, implicitly guide our judgement, biases

In synectics, what is the job of the technical support?

aid the group in the evaluation of the feasibility of ideas

What does the behavioral model assume about decision-makers?

bounded rationality, satisfice

Under what decision-making condition do decisions get made in the traditional economic model?

certainty

Which decision-making condition is least common?

certainty 100%

Leveling effect

compromise that takes place in GDM, lower the quality of decision but increase the acceptability of the decision. BOTH

What factors cause you to overestimate the frequency of an event?

easily imagined, vivid, emotional, specific

What are the steps in NGT?

familiarized with a problem, Working silently and alone, each group member is asked to prepare a list of ideas in response to the problem, members share their ideas one at a time, in a round-robin manner, openly discuss and evaluate each recorded idea, votes privately by ranking the recorded ideas in order of assessed importance. Following a brief discussion of the vote's outcome, a final secret ballot is conducted. The group's preference is the alternative that receives the highest votes.

What 2 creativity techniques does synectics use in helping the group to generate better ideas?

fantasy and analogy

In synectics, what is the job of the facilitator?

generate ideas, structure the problem and helps lead the discussion away from the traditional ways of thinking (uses fantasy and analogy)

What does the irrational/implicit favorite model of decision-making say about decision-making?

goes through the motions of generating and evaluating more alternatives as a way to justify their initial choice (favorite), the manager wants his/her decision making process to appear rational while in reality it's far from it, decisions made under uncertainty

Which leads to greater acceptance of the decision & better implementation of the decision: individual or group decision making?

group decision making

What are operations research techniques designed to do?

help in evaluating RISK

In making decisions, do people pay more attention to descriptive, qualitative information or statistical, quantitative information?

often ignore statistical/relevant data (logical base-rate reasoning) and make their judgments using qualitative and descriptive data (i.e. vivid case data or personal experience data)

What are the disadvantages of group decision making?

process losses, Takes longer than individual decision making, costlier, indecisiveness, Domination by a few powerful members or by a leader, Leveling effect may occur, disagreements often lead to bad feelings, Escalation of demands, Social motives may prevail over hard-headed task orientation.

Do managers make more programmed or non-programmed decisions, in general?

programmed to make us more effeicent

How do programmed/non-programmed decisions & the different decision-making conditions relate?

programmed: certainty and risk, non-programmed: risk and uncertainty.

What kind of data do ORT usually require?

quantitative data

Which decision-making condition is most common?

risk, probabilities, 0 - 100%

What research is NGT based on? (Nominal Group Techniques)

several persons working alone/separately than by the same persons working in an interacting group; thus, NGT is a group "in name only"

What is the stepladder technique designed to prevent?

social loafing -- more people you have the efficiency goes down (the less people do)

What is the stepladder technique designed to promote?

the group to reconsider its solution multiple times

Process loss?

the negative consequences of bringing a group together such as interpersonal conflict, domination by a few, more time and expense

What is an assembly effect?

the positive consequences of bringing a group together such as synergy, more information, diverse viewpoints, checking errors

When does a manager (under what conditions) use individual decision making rather than group decision making?

time is limited/short, has all relevant knowledge and expertise to solve problem, subordinate acceptance of the decision is not an issue, subordinates that would make up the group do not get along well, subordinates do not share the organization's goals

Why do we make decisions as managers?

to accomplish goals efficiently, organizational mechanisms through an attempt is made to achieve operative goals and overall organizational goals

What factors cause you to underestimate the frequency of an event?

unemotional, bland, in the distant past, difficult to imagine, vague