mgmt 309 ch 9
recognize and define the decision situation; identify alternatives; evaluate each alternative in terms of feasibility, satisfactoriness, and consequences; select the best alternative; implement the chosen alternative; and follow up and evaluate the results of the chosen alternative
These are the steps in rational decision making
programmed and nonprogrammed
These are the two types of decisions
being aware of the pros and cons of having a group or team make a decision; setting deadlines for when decisions must be made; avoid problems with dominance by managing group membership; have each group member individually critically evaluate all alternatives; do not make the boss position known too early; appoint a group member to be a "devil's advocate"; hold a follow-up meeting to recheck the decision
These are ways managers can promote the effectiveness of group and team decision making
the process takes longer than individual decision making so it is more costly; compromise decisions resulting from indecisiveness may emerge; one person may dominate the group; groupthink may occur
These are the disadvantages to group and team decision making
bounded rationality
A concept suggesting that decision makers are limited by their values an unconscious reflexes, skills, habits; although people try to be rational decision makers, their rationality has limits
state of risk
A condition in which the availability of each alternative and its potential payoffs and costs are all associated with probability estimates
state of uncertainty
A condition in which the decision maker does not know all the alternatives, the risks associated with each, or the consequences each alternative is likely to have
state of certainty
A condition in which the decision maker knows with reasonable certainty what the alternatives are and what conditions are associated with each alternative
escalation of commitment
A decision maker staying with a decision even when it appears to be wrong
programmed decision
A decision that is a fairly structured decision or recurs with some frequency or both
nonprogrammed decision
A decision that is relatively unstructured and occurs rarely or not that often
administrative model
A decision-making model that argues that decision makers (1) use incomplete and imperfect information, (2) are constrained by bounded rationality, (3) tend to "satisfice" when making decisions
coalition
A political force in decision making which consists of an informal alliance of individuals or groups formed to achieve a goal; can be either a positive or negative force
classical decision model
A prescriptive approach that tells managers how they should make decisions; assumes that managers are logical and rational and that their decisions will be in the best interest of the organization
brainstorming
A process where criticism is not allowed, free-wheeling is welcome, quantity is encouraged, and combination and improvement are sought
group think
A situation that occurs when a group or team's desire for consensus and cohesiveness overwhelms its desire to reach the best possible decision; usually happens to avoid conflict among group members
risk of propensity
The extent to which a decision maker is willing to gamble when making a decision; risk avoidance or risk taker
base rate bias
The initial probability given no other information; occurs when people put too much weight on evidence provided, or additional information, and not enough weight on the information provided by the base rate
noisy environment
The link between outcome and actions is hard to predict due to this; ex- accident, too loud or distracting; outside influences
decision making process
The process of recognizing and defining the nature of a decision situation, identifying alternatives, choosing the "best" alternative, and putting it into practice
choice shift
The tendency for groups to make decisions that appear more extreme than the decisions group members would have made on their own (power in #s)
satisficing
The tendency to search for alternatives only until one is found that meets some minimum standard of sufficiency to resolve the problem
lack of consensus
There must be a general agreement of the definition of problems, decisions, and decision making goals at the beginning and when there is not this happens
nominal groups
These are a structured technique designed to generate creative and innovative ideas through the individual contributions of alternatives that are voted on through a series of rank-ordering of the alternatives to reach a decision; forces people to participate by having each member write down their proposed alternative and read it out loud
relationships of the firm to employees, employees to the firm, and the firm to other economic agents
These are components of managerial ethics
Delphi groups
These are sometimes used for developing a consensus of expert opinion from a panel of experts who individually contribute through a moderator; the experts usually write their comments to the moderator and are not in the same room
certainty, risk, or uncertainty
These are the decision making conditions that a decision maker faces and they range in the chances of making a bad decision fro low to high
interacting groups or teams, Delphi groups, nominal groups, brainstorming groups
These are the forms of group and team decision making in organizations
lack of consensus, unclear means-end relations, and noisy environment
These are the three factors that prevent rationality
how emotion affects the decision making process
In the Star Trek movie shown in class with the character Data given an emotion chip this was demonstrated
unclear means-end relations
It is impossible to generate an exhaustive list of alternatives and then select the most promising; this describes
problems and opportunities
Managers make decisions about both
more information and knowledge are available; more alternatives are likely to be generated; more acceptance of the final decision is likely; enhanced communication of the decision may result; better decisions usually emerge
These are the advantages of group and team decision making
decision making
The act of choosing one alternative from among a set of alternatives
profits, sales, employee welfare, and market share
An effective decision is one that optimizes some set of factors such as
intuition
An innate belief about something, without conscious consideration
playing devils advocate can avoid group think
In the movie Secret of My Success with Michael J Fox this was demonstrated
ethics and decision making
Individual ethics (personal beliefs about right and wrong) combine with the organization's ethics to create managerial ethics; this process describes
classical decision model
This decision making model is performed in these steps: when faced with a decision situation managers should obtain complete and perfect information, eliminate uncertainty, evaluate everything rationally and logically and end up with a decision that best serves the interests of the organization
multiply the odds; ex- .9 x .8 x .9 x .8= .52 or 52% not 85% by averaging
This is the base rate method for finding probability
interacting groups or teams
This is the most common form of decision making groups which consists of an existing group or newly formed team interacting and then making a decision
compliance
When group members conform to others' expectations or behaviors in the hope of acquiring rewards or avoiding punishment; ex- boss puts out idea and people respond