MGMT 3013 Chapter 7

"Going with your gut," or intuition, is making a choice without the use of conscious thought or logical inference. Intuition that stems from expertise "Satisfactory is good enough" "Always strive for perfection" "Identify the problem or opportunity" "It just feels right"

"It just feels right"

The ability of decision-makers to be rational is limited by numerous constraints, such as complexity, time, money, and other resources, and their cognitive capacity, values, skills, habits, and unconscious reflexes "Satisfactory is good enough" "Always strive for perfection" "Identify the problem or opportunity" "It just feels right"

"Satisfactory is good enough"

What are the types of non-rational models? "Satisfactory is good enough" "Always strive for perfection" "Identify the problem or opportunity" "It just feels right"

"Satisfactory is good enough" and "It just feels right"

A disadvantage to group decision making, sometimes a handful of people will talk the longest and the loudest, and the rest of the group will simply give in Groupthink Goal Displacement A few people dominate or intimidate Satisficing

A few people dominate or intimidate

What are the assumptions of the Rational Decision-Making Model? Complete information, no uncertainty Logical, unemotional analysis Best Decision for the organization All of the above

All of the above

Confident of the best future course of action, you coolly choose the alternative that you believe will most benefit the organization Logical, unemotional analysis Best decision for the organization Complete information, no uncertainty

Best decision for the organization

You should obtain complete, error-free information about all alternative courses of action and the consequences that would follow from each choice Logical, unemotional analysis Best decision for the organization Complete information, no uncertainty

Complete information, no uncertainty

The process of analyzing raw data sets in order to make conclusions about the information they contain Non-Rational Decision Making Rational Decision Making Data Analytics Ethical Decision Tree

Data Analytics

An advantage to group decision making, if you've been part of the group that has brought into the final decision, you're more apt to be committed to seeing that the course of action is successfully implemented Different Perspectives Deeper commitment to the decision Greater Pool of Knowledge Intellectual stimulation

Deeper Commitment to the Decision

An advantage to group decision making, different people have different viewpoints Different Perspectives Better understanding of decision rationale Greater Pool of Knowledge Intellectual stimulation

Different Perspectives

What's wrong with rational decision making? Does not plan effectively Managers do not have complete information Does not describe how managers actually make decisions None of the above

Does not describe how managers actually make decisions

A graph of decisions and their possible consequences. It is used to create a plan to reach a goal and are used to aid making decisions, especially when there is uncertainty Non-Rational Decision Making Rational Decision Making Data Analytics Ethical Decision Tree

Ethical Decision Tree

A disadvantage to group decision making, occurs when the primary goal is subsumed by a secondary goal Groupthink Goal Displacement A few people dominate or intimidate Satisficing

Goal Displacement

An advantage to group decision making, when several people are making the decision, there is a greater pool of information from which to draw Different Perspectives Better understanding of decision rationale Greater Pool of Knowledge Intellectual stimulation

Greater pool of knowledge

A disadvantage to group decision making, occurs when group members strive to agree for the sake of unanimity and thus avoid accurately assessing the decision situation Groupthink Goal Displacement A few people dominate or intimidate Satisficing

Groupthink

Strategies that simplify the process of making decisions. There are 10 of these that include availability, representatives, confirmation, sunk cost, anchoring and adjustment, overconfidence, hindsight, framing, escalation of commitment, and categorical thinking. AKA Decision-Making Biases Ethical Decision Tree Data Analytics Heuristics Symbols

Heuristics

What are the 4 steps in making a rational decision: Identify the problem or opportunity Think up alternative solutions Include others in the implantation process Evaluate alternatives and select a solution Implement and evaluate the solution chosen

Identify the problem or opportunity Think up alternative solutions Evaluate alternatives and select a solution Implement and evaluate the solution chosen

An advantage to group decision making, a group of people can brainstorm or otherwise bring greater intellectual stimulation and creativity to the decision-making process than is usually possible with only one person Different Perspectives Better understanding of decision rationale Greater Pool of Knowledge Intellectual stimulation

Intellectual Stimulation

Having no prejudices or emotional blind spots, you are able to logically evaluate the alternatives, raking them from best to worst according to your personal preferences Logical, unemotional analysis Best decision for the organization Complete information, no uncertainty

Logical, unemotional analysis

The decision-making style that explain how managers make decisions. They assume that decision making is nearly always uncertain and risky, making it difficult for managers to make optimum Non-Rational Decision making Rational Decision making

Non-Rational Decision making

Explains how managers should make decisions and assumes that managers will make logical decisions that are the optimal means of furthering the organization's best interests. Non-Rational Decision making Rational Decision making

Rational Decision making

A disadvantage to group decision making, the tendency is to seek a decision that is "good enough" rather than to push on in pursuit of other possible solutions Groupthink Goal Displacement A few people dominate or intimidate Satisficing

Satisficing

They are careful decision-makers who like lots of information and alternative choices. Additionally, they have a much higher tolerance for ambiguity and respond well to new or uncertain situations. The Analytical Style The Behavioral Style The Direct Style The Conceptual Style

The Analytical Style

The tendency to make decisions based on an initial figure The Overconfidence Bias The Anchoring and Adjustment Bias The Framing Bias The Hindsight Bias

The Anchoring and Adjustment Bias

The use of information readily available from memory to make judgments The Confirmation Bias The Sunk-Cost Bias The Availability Bias The Representativeness Bias

The Availability Bias

The most people-oriented decision-makers. People with this style work well with others and enjoy social interactions in which opinions are openly exchanged. The Analytical Style The Behavioral Style The Direct Style The Conceptual Style

The Behavioral Style

The tendency of decision-makers to classify people or information based on observed or inferred characteristics The Categorical Thinking Bias The Availability Bias The Escalation of Commitment Bias The Overconfidence Bias

The Categorical Thinking Bias

The tendency of people to view events as being more predictable than they really are The Overconfidence Bias The Anchoring and Adjustment Bias The Framing Bias The Hindsight Bias

The Hindsight Bias

Bias in which people's subjective confidence in their decision-making is greater than their objective accuracy The Overconfidence Bias The Anchoring and Adjustment Bias The Framing Bias The Hindsight Bias

The Overconfidence Bias

The tendency to generalize from a small sample or a single event The Confirmation Bias The Sunk-Cost Bias The Availability Bias The Representativeness Bias

The Representativeness Bias

Way of thinking in which managers add up all the money already spent on a project and conclude it is too costly to simply abandon it The Confirmation Bias The Sunk-Cost Bias The Availability Bias The Representativeness Bias

The Sunk-Cost Bias

Decision-makers who rely on intuition and have a long-term perspective. They have a higher tolerance for ambiguity and tend to focus on the people or social aspects of a work situation. Also, they take broad perspective to problem solving and like to consider many options and future possibilities. The Analytical Style The Behavioral Style The Direct Style The Conceptual Style

The Conceptual Style

Biased way of thinking in which people seek information to support their point of view and discount data that do not support it The Confirmation Bias The Sunk-Cost Bias The Availability Bias The Representativeness Bias

The Confirmation Bias

Have a directive style with a low tolerance for ambiguity and are oriented toward task and technical concerns in making decisions. Action-oriented decision-makers who focus on facts The Analytical Style The Behavioral Style The Direct Style The Conceptual Style

The Direct Style

An advantage to group decision making, If you participate in making a decision, you are more apt to understand the reasoning behind the decision, including the pros and cons leading up to the final step Different Perspectives Better understanding of decision rationale Greater Pool of Knowledge Intellectual stimulation

Better understanding of decision rationale

What are the 4 Decision making styles? The Direct Style The Availability Style The Conceptual Style The Analytical Style The Confirmation Style The Behavioral Style

The Direct Style The Analytical Style The Conceptual Style The Behavioral Style

When decision-makers increase their commitment to a project despite negative information about it The Categorical Thinking Bias The Availability Bias The Escalation of Commitment Bias The Overconfidence Bias

The Escalation of Commitment Bias

The tendency of decision makers to be influenced by the way a situation or problem is presented to them The Overconfidence Bias The Anchoring and Adjustment Bias The Framing Bias The Hindsight Bias

The Framing Bias