MGT2530 chapter 11
Judgemental Heuristics
cognitive shortcuts or biases that are used to simplify the process of making decisions
consensus
is reached when all members can say they agree with the decision or have had their day in court and were unable to convince the others of their viewpoint. in final analysis, everyone agrees to support the outcome
creativity
process of producing "new and useful ideas concerning products and services and processes and procedures"
questions on a decision tree look like:
1. is the proposed action legal 2. if yes, does the proposed action maximize shareholder value 3. if the decision maximized the shareholder value, the decision maker then considers whether or not the` action is ethical
2 reasons why groups are cohesive
1. they like and enjoy each others company 2. they need each other to achieve a common goal
it is suspected that judgmental heuristics are partly to blame for inaccurate diagnoses and treatment by physicians and other health care professionals because they don't have the time to consider all of a patients symptoms
true
often decision makers select the most readily available ideas or solutions. therefore, they are advised to evaluate a broader set of alternatives
true
the sources or creative behaviors are both person and situation factors
true
to reduce groupthink, someone should be given the role of devils advocate
true
evidence based decision making
type of decision that can help in the use of "big data" to market and sell products and services
system 1 of decision making
unconscious thoughts; automatic, instinctive and emotional mode of decision making
when does group think happen?
when a member fails to exercise sufficient reality testing and moral judgement due to pressures from the group
2. to inform a decision example
when applying to a job, they will search your background to be aware of who you are
what did aritstotle conclude
"when there are many who contribute to the process of deliberation, each can bring his share of goodness and more prudence, some appreciate one part and some other, and all together appreciate all
4 styles of decision making
1. Directive 2. Analytical 3. Conceptual 4. Behavioral
four stages of rational decision making
1. Identify the problem or opportunity 2. Generate alternative solutions 3. Evaluate alternatives and select a solution 4. Implement and evaluate the solution chosen
three ways artificial intelligence help managers enhance business operations
1. automating business processes 2. gaining insight through data analysis 3. engaging with customers and employees
advantages in decision making
1. greater pool of knowledge 2. different approaches to a problem 3. greater commitment to a decision 4. better understanding of decisions rationale 5. more visible role modeling
explicit knowledge
information that can be easily out into words
in making a decision
evidence forms the basis of the decision
example of satisficing
choosing a good radio station
Decision Support System (DSS)
Computer-based interactive systems that help decision makers use data and models to solve unstructured problems
framing bias
Relates to the manner in which a question is posed or framed. leads us to change the way we interpret alternatives
what helps to help managers make ethical decisions?
a decision tree
Delphi Technique
a group process that generates anonymous ideas or judgements from physically dispersed experts in multiple rounds of brainstorming
electronic brainstorming; brainwriting
allows participants to submit their ideas and alternatives over a computer network
invulnerability; a type of groupthink
an illusion that the group cannot make a mistake breeds excessive optimism and risk taking
expertise
an individuals combined explicit knowledge and tacit knowledge
inherent morality
assuming the group is highly moral encourages members to ignore ethical implications
what is the least smart for artificial intelligence
back office administrative and financial activities
peer pressure
be careful when the loyalty of dissenters is questioned
an individual who enjoys working with others and enjoys social interactions in which opinions are openly exchanged exhibits which decision making?
behavioral
availability heuristic
decision makers tendency to base decisions on information readily available in memory
how is bounded rationality caused?
by any personal characteristic and internal and external resources that reduce rational decision making
how do brainstorming sessions begin?
by asking participants to silently generate ideas or solutions
julie takes a broad perspective to problem solving and likes to consider many options and future possibilities. she has a long term perspective and relies heavily on intuition and discussions with others, and is good at finding creative solutions to problems. julie has a _ style
conceptual
in the _ bias, a decision maker subconsciously decides something even before investigating, and then seeks information that supports the decision
confirmation
system 2 of decision making
conscious thought; slow, logical, deliberate mode of decision making
satisficing
consists of choosing a solution that meets some minimum qualifications, one that is "good enough"
intuition
consists of judgements, insights, or decisions "that come to mind on their own without awareness"
a _ tree is a graphical representation of the process underlying decisions
decision
managers use _ in three different ways. to make a decision, to inform a decision, and to support a decision
evidence or data
nonrational decision making
explains how managers actually make decisions
rational decision making
explains how managers should make decisions
evidence should never be used to make a decision, only to inform or support one
false
experiencing boredom inhibits creativity process
false
in the anchoring bias, the decision maker tends to assess the likelihood of an event based on impressions of similar events
false, anchoring bias occurs when decision makers are influenced
the degree to which people focus on either task and technical concerns or people and social concerns when making decisions is known as their analytical preference.
false, it is value orientation
the rational model of decision making explains how managers actually make decisions
false, its the nonrational
the last step in bagleys decision tree is, "does the proposed action maximize shareholder value?"
false, the last step is "would it be ethical to take the proposed action?
ethical behavior
is related to inputs such as personality, values, locus of control, and a culture and climate for ethics
escalation of commitment bias
is the tendency to hold to an ineffective course of action even when it is unlikely the bad situation can be reversed
holistic hunch
judgment that is based on a subconscious integration of information stored in memory
self-censorship
keeping ideas and questions to yourself stifles critical debate
example of decision making constraint
lack of information
respresentativeness bias
leads us to look for information that supports previously formed stereotypes
which of the following is not an advantage of group decision making
less pressure to conform
personal characteristic example
males tend to make riskier decisions than females
Rationalization
members protect their personal or "pet" ideas and assumptions
illusion of unanimity
members' silence can be interpreted to mean consent
anchoring bias
occurs when decision makers are influenced by the first information received about a decision, even if it is irrelevant
minority dissent
occurs when group members feel comfortable disagreeing with other group members
hindsight bias
occurs when knowledge of an outcome influences our belief about the probability that we could have predicted the outcome earlier
goal displacement
occurs when the primary goal is subsumed by a secondary goal
external resources example
organizations cannot directly control, employment levels in community, capital availability, government policies
internal resources example
organizations humans and social capital, plant and equipment, time available
high commitment work system
rely on selective hiring, comprehensive training, comparatively high pay, pay contingent on performance and good benefits
automated experience
represents a choice based on a familiar situation and a partially subconscious application of learned information related to it
bounded rationality
represents the notion that decision makers are "bounded" or restricted by a variety of constraints when making decisions
Mindguards
self-appointed protectors against adverse information
cohesiveness
sense of "we-ness" that overrides individual differences and motives
opportunity
situation in which results that exceed goals and expectations are possible
optimizing
solving problems by producing the best possible solution; complete information, leaving emotions out
what system do you use for alternatives and potential solutions?
system 2
tolerance of ambiguity
the extent to which a person needs structure or control in their lives
value orientation
the extent to which an individual focuses on either task and technical concerns or people and social concerns when making decisions
stereotyped views of opposition
the group may underestimate opponents
three ways to use evidence or data
1. make a decision 2. to inform a decision 3. support a decision
drivers of c.p.b
1. person factors 2. situation factors
creative performance behavior steps
1. problem formulation/definition 2. preparation /information gathering 3. idea generation 4. idea evaluation /validation
3 practical considerations in decision making
1. routine and frequency 2. time constraints 3. information and communication
4 disadvantages in decision making
1. social pressure 2. a few dominant participants 3. goal displacement 4. group think
3 benefits of following rational process
1.quality 2. transparency 3. responsibility
creativity performance behaviors
4 key behaviors that drive the production of creative outcomes
artificial intelligence
form of computing that allows machines to perform cognitive functions
decision tree
graphical representation of the process underlying decisions and it shows the resulting consequences of making various choices
Brainstorming
helps group generate multiple ideas and alternatives for solving problems
the making of new mental connections regarding the creative task or problem at hand is represented in the _ stage of the creative performance process
idea generation
decision making
identifying and choosing from among alternate solutions that lead to a desired state of affairs
stage 4
if effective, it should eliminate or reduce problem state and desired outcome. if not effective, the problem was incorrectly identified
tacit knowledge
information we gain through experience that is difficult to express and formalize
can decision trees answer every ethical question
no. they are also made to increase awareness about cross cultural issues when the work engages people with mixed cultured backgrounds
overconfidence bias
overestimating our skills relative to those of others and overestimating the accuracy of our predictions
which of the following is not a symptom of group think
overestimation of opponents
Conceptual Style of Decision Making
people have a high tolerance for ambiguity and tend to focus on the people or social aspects of work situation; broad perspective on problem solving and like to consider many options and future possibilities
Analytical style of decision making
people have a higher tolerance for ambiguity and tend to overanalyze a situation; consider for information and alternatives than directive style
Directive Style of Decision Making
people have low tolerance of ambiguity and are oriented toward task and technical concerns when making decisions; efficient, practical, and systematic
confirmation bias
pertains to how we selectively gather information
3. support a decision
positive: evidence can be used after the fact negative: can stifle an employee involvement and input
problem with big data
private or sensitive information is more likely to be obtained
evidence based decision making
process of conscientiously using the best available data and evidence when making managerial decisions
stage 3: evaluate alternatives
question yourself with: 1. is it feasible 2. is it ethical 3.will it remove the causes and solve the problem
which of the following is one of the assumptions underlying nonrational models of decision making?
rational decision making is a struggle
big data
reflects the vast quantity of data available for decision making
creative outcome effectiveness
the joint novelty and usefulness (quality) of a product or service as judged by others
groupthink
the mode of thinking that occurs when the desire for harmony in a decision-making group overrides a realistic appraisal of alternatives
behavioral style of decision making
the most people-oriented decision makers; supportive, receptive to suggestions, show warmth, prefer verbal to written information
decision making style
the way an individual perceives and comprehends stimuli and the general manner in which he or she chooses to respond to such information
1. make a decision example
to choose a car that is used and is looking for the same color and toyota
goal
to make improvements that change conditions from their current state to a more desirable one