MGT 312 CH 7

NRDM-Satisficing Model

1. A model that will find a good—but not necessarily the best—solution to a problem. 2. May outweigh any advantages gained from delaying a decision

Directive Style of Decision Making

1. Action-oriented with a focus on facts 2. used by people who prefer simple, clear-cut solutions to problems 3. Low tolerance for ambiguity 4. Oriented toward task and technical concerns 5. tend to be autocratic, exercise power & control, focus on the short run/here and now

Ways to prevent Groupthink

1. Allow criticisim 2. Allow other perspectives and encourage plan role of devil's advocate

What to do if decision/solution is not working

1. Give it more time 2. Change it slightly 3. Try another alternative 4. Start over

Rational Decision Making Model (Classical Model)

1. How Managers should make decisions 2. Assumes logical decisions that will be optimum in further ing the organizations interests 3. 4 Stages

Behavioral Style of Decision Making

1. People oriented-work well with others and enjoy social interactions w/ open exchange of opinions 2. Supportive and receptive to suggestions 3. Show warmth and prefer VERBAL over written communication 4. Like to hold meetings but may avoid conflict and overly concerned with others. 5. Can be wishy-washy and have a hard time saying no

Devil's Advocate Decision Program

1. Proposed course of action 2. Devil's advocate assigned 3. Critique presented to key decision makers 4. Additional relevant info gathered as necessary 5. Decide to adopt, modify or discontinue course of action 6. Decision Monitored

Reasons CEOs are more likely to be ousted for ethical violations in the US and Canada

1. Public is less forgiving of poor behavior 2. Regulations are stricter 3. companies are expanding operations in countries where ethical risks are higher and laws less protective 4. Digital communication increases risk of hackers/whistleblowers 5. 24/7 news cycle and proliferation of media

Project Post-Mortem

1. Review of recent decisions in order to identify possible future improvements 2. Note what could be done differently/better and record info to inform future decisions 3. Usually takes place during a meeting of the project team 4. Thorough look at how reality differed from plans and expectations

Symptoms of Groupthink

1. Sense of invulnerability 2. Rationalization 3. Illusion of unanimity and peer pressure 4. "The wisdom of crowds"

Kahneman's System 2

1. Slow, deliberate, analytical and consciously effortful mode of reasoning

2 Benefits of Intuition Model

1. Speeds up decision making when deadlines are tight 2. Helps managers with limited resources

Characteristics of Group Decision Making

1. They are less efficient 2. Their size affects decision quality 3. They may be too confident 4. Knowledge Counts

Do's & Don'ts of Achieving Consensus

1. Use active listening skills-DO 2. Involve as man members as possible-DO 3. Seek reasons behind arguments-DO 4. Dig for facts-DO 5. Avoid log rolling and horse-trading(back-scratching)-DON'T 6. Avoid agreeing to keep relationships & avoiding rocking the boat-DON'T 7. Don't try to achieve consensus by forcing a vote

3 key attributes among analytics competitors

1. Use of modeling: going beyond simple descriptive statistics 2. Multiple applications, not just one 3. Support from the top

Disadvantages of Group Decision Making

1. a few people dominate or intimidate 2. groupthink 3. satisficing 4. goal displacement

Intuition Model

1. making a choice without the use of conscious thought or logical inference 2. Stems from expertise 3. Holistic hunch-a person's explicit & tacit knowledge about a person, object or decision opportunity 4. Automated experience-based on feeling-involuntary emotional response to the same matters

Dialectic Decision Method

Action proposed Assumptions identified Counter-proposal generated on different assumptions Debate takes place Decide to adopt current position or other compromise made Decision is monitored

AI that automates basic tasks making it faster and cheaper for humans to accomplish them

Assisted Intelligence

AI that learns from human inputs in order to assist humans in making better decisions

Augmented Intelligence

AI where humans give over operational controls to the machine

Autonomous Intelligence

This reflect the combination of how an individual perceives and responds to information

Decision making style

______________is analyzing the underlying causes.

Diagnosis

Another way of saying that a member's silence interpreted as consent. If people disagree, peer pressure leads to other members questioning their loyalty

Groupthink-illusion of unanimity

RDM Stage 1

Identify the Problem or Opportunity Determine the actual versus the desirable Diagnose the underlying causes Decide on improvements

RDM Stage 4

Implement and Evaluate the Solution Chosen

Groupthink's pressure to conform leading members with different ideas to censor themselves-the opposite of collective wisdom

The Wisdom of Crowds

RDM Stage 2

Think up alternative solutions

The purest application of evidence based management

business analytics

Braistorming

-a technique used to generate multiple ideas and alternative solutions to problems -developed by A.F. Osborn -anonymous ideas collected, written on board -critique and evaluate alternatives -take a walk to increase creativity

Electronic Brainstorming

-brainwriting -done over computer network

Uses of Big Data Analytics

1. Analyzing consumer behavior and spurring sales 2. Improving hiring and human resource management 3. Tracking movie, music, TV and reading data 4. Advancing health and medicine 5. Aiding public policy

RDM Model Assumptions

1. Assumes complete information and no uncertainty 2. Assumes logical and unemotional analysis-no prejudices or blind spots 3. Assumes best decision for the organization

Barriers to Decision Making-Biases

1. Availability Bias 2. Representativeness Bias 3. Confirmation Bias 4. Sunk Cost 5. Anchoring and Adjustment 6. Overconfidence 7. Hindsight 8. Framing 9. Escalation of Commitment

Overconfidence bias

1. Blind to our own blindness 2. People's subjective confidence in their decision making is greater than their objective accuracy

Group Problem Solving Techniques

1. Brainstorming 2. Devil's advocacy 3. Dialetic method 4. Post-mortems 5. Conscensus

RDM Successful implementation requires

1. Careful Planning 2. Sensitivity to those affected

Analytical Style of Decision Making

1. Careful decision-makers like a lot of information and alternative choices 2. Higher tolerance for ambiguity 3. Respond well to new or uncertain situations 4. Like to consider more info and alternatives than directive style 4. Careful decision-makers who take longer/tend to overanalyze

Establish a Decision Making Methodolgy

1. Create standard operating procedures to be better prepared to address regularly occurring problems 2. Reflect on past decisions 3. Analyze the situation 4. Consider what others would think about the decision 5. Seek advice or feedback before deciding 6. Conduct cost-benefit analysis 7. Determine if consistent with your values and principles 8. Make a decision, observe consequences, do post-mortem

Predictive Modeling

1. Data mining technique used to predict future behavior and anticipate the consequences of change

6 Rules of Brainstorming

1. Defer judgment-no criticizing during idea generation 2. Build on ideas-no 'buts' use 'ands' 3. go for quantity over quality 4. Be visual 5. One conversation at a time-no interruptions

Nonrational Decision Making Models

1. Descriptive rather than prescriptive=describe how managers ACTUALLY make decisions 2. 2 Models-Satisficing and Intuition

Drawbacks of Intuition Model

1. Difficult to convince others your decisions make sense 2. Subject to biases that affect rational decision making

Escalation of Commitment Bias

1. Feeling overly invested in a decision 2. Increasing commitment to a decision despite negative information about it or increasing evidence you are wrong 3. Change decision negative is embarrassing

Conceptual Style Decision Making

1. High tolerance for ambiguity 2. Tend to focus on the people and social aspects of a situation 3. Take a broad perspective on problem solving 4. Like to consider many options and future possibilities 5. Willing to take risks 5. Good at finding creative solutions to problems

Hindsight Bias

1. I knew it all along effect 2. Tendency of people to view events as more predictable than they are 3. Occurs when we look back on a decision to reconstruct why we decided to do something 4. Mentally correcting and justifying wrong decision

How to improve your intuition in decision making

1. Immerse yourself in data and facts 2. practice the 'first principles of thinking'-start over 3. Be mindful and open to insights 4. Test your intuition 5. reward your intuitions

Kahneman's System of Decision Making-System 1

1. Intuitive and largely unconscious 2. Operates automatically and quickly 3. Uses association and metaphor to produce

Decision Tree

1. Is the proposed action Legal? 2. Yes-Does the proposed action maximize shareholder Value? 3. Yes-Is the proposed action ethical? 4. No-Would it be ethical NOT to take the action?

How to Know your Decision Making Style

1. Know yourself 2. Influence others 3. Deal with conflict

NRDM Bounded Rationality- The ability of decision makers to be rational is

1. Limited by constraints such as complexity, time, money 2. Limited by cognitive capacity, values, skills, habits and unconscious reflexes 3. Limited by information overload, different priorities, conflicting goals

Framing Bias

1. Negative and Positive Framing 2. the tendency of decision-makers to be influenced by the way a situation or problem is presented to them

challenges of EBDM

1. Too much evidence 2. Not enough good evidence 3. Evidence doesn't quite apply 4. People are trying to mislead you 5. You are trying to mislead yourself 6. Side effects outweigh the cure 7. Stories are more persuasive

7 EBDM Implementation Principles

1. Treat your organization as an unfinished prototype 2. No brag just facts about forthcoming products 3. See yourself and organization as outsiders do-avoid rampant optimism-use blunt friend, mentor or counselor to reflect 4. Evidence based management used at all levels 5. Sell it based on solid unexciting evidence avoid vivid stories 6. If all else fails, slow the spread of bad practices 7. Use the best diagnostic question What happens when people fail?

How to assess participation in group decision making

1. What is the level of minority dissent? 2. Rate group participation satisfaction of members 3. Use the 3 lowest items that measure minority dissent to answer what can you do to increase the level of dissent in a group?

3 Practical Guidelines for when group decision making can help

1. When it can increase quality 2. When it can increase acceptance 3. When it can increase development

Advantages of Group Decision Making

1. greater pool of knowledge 2. different perspectives 3. intellectual stimulation 4. better understanding of decision rationale 5. deeper commitment to the decision

Anchoring and Adjustment Bias

1. initial information received influences decision more heavily than any other information. 2. the tendency to make decisions based on an initial figure

Confirmation Bias

1. tendency to search for information that supports our preconceptions and to ignore or distort contradictory evidence 2. Snap judgments 3. Predisposed ideas

Representativeness Bias

1. the tendency to generalize from a small sample or a single event 2. based only on one's own knowledge or memory or past experience 3. Includes stereotyping and prejudice

RDM Stage 3

Evaluate Alternatives and Select a Solution-3 Steps Ethical determination Feasibility Effectiveness

Indicates the extent a person has for a need for structure or control in his or her life

Tolerance for Ambiguity

What are the aspects of critical thinking?

Using qualitative and quantitative information to solve problems creatively Using reason to analyze situations, make decisions, and solve problems

Reflect the extent a person focuses on either task and technical concerns or people and social concerns when making decisions

Value Orientation

An AI application that learns from human inputs in order to assist humans in making better decisions is known as

augmented intelligence

Decision

choice made from among available alternatives

When rivals are focused on winning an argument rather than the goal of a meeting and the topics of the meeting are not discussed, it is an example of

goal displacement

Minority Dissent

occurs when a minority in a group publicly opposes the beliefs, attitudes, ideas, procedures, or policies assumed by the majority of the group associated with innovation within groups

In Groupthink, rationalizing serves to

protect the pet assumptions underlying the group's decisions from critical questions

Value orientation reflects the extent to which a person is either a

task or people oriented when making decisions.

Groupthink

the mode of thinking that occurs when the desire for harmony in a decision-making group overrides a realistic appraisal of alternatives

Big Data Analytics

the process of examining large amounts of data of a variety of types to uncover hidden patterns, unknown correlations, and other useful information

Decision making

the process of identifying and choosing alternative courses of action

Evidence Based Decision Making EBDM

Translating principles based on best evidence into organizational practice, using rationality in decision making process

Sunk Cost Bias (Sunk-Cost Fallacy)

when managers add up all the money already spent on a project and conclude it is too costly to simply abandon it

4 Styles of Decision Making

1. Directive 2. Analytical 3. Conceptual 4. Behavioral

Availability Bias

1. Manager give more weight to recent behavior 2. the tendency for people to base their judgments on information that is readily available to them 3. Overestimating the occurrence

Group members have the illusion that nothing can go wrong, breeding excessive optimism and risk-taking Assured of the rightness of their actions that they ignore the ethical implications

Groupthink-sense of invulnerability