Chapter 11

Majority rule

a decision making rule in which each member of the group is given a single vote and the option receiving the greatest number of votes is selected

Bounded rationality model

according to this model individuals knowingly limit their options to a manageable set and choose the first acceptable alternative without conducting an exhaustive search for alternatives. Refers to the tendency to satisfice

Intuitive decision making model

arriving at decisions without conscious reasoning. The model argues that in a given situation experts marking decisions scan the environment for cues to recognize patterns

Programmed decisions

decisions that occur frequently enough that we develop an automated response to them

Non-programmed decisions

decisions that requires conscious thinking, information gathering, and careful consideration of alternatives

Anchoring

refers to the tendency for individuals to rely to heavily on a single piece of information.

Framing bias

tendency to be influenced by the way that a situation or problem is presented

Hindsight bias

the opposite of overconfidence bias as it occurs when looking backward in time and mistakes seem obvious after they have already occurred

Over confidence bias

what occurs when individuals overestimate their ability to predict future events

Consensus

A decision making rule that groups may use when the goal is to gail support for an idea or plan of action. This decision making rules is inclusive, participatory, cooperative and democratic

Delphi technique

A group process that utilizes written responses to a series of questionnaires instead of physically bringing individuals together to make decisions

Creative decisions

Creativity is the generation of new, imaginative ideas. It is the first step in the innovation process, but not the same thing. Step 1) Problem recognition 2) Immersion 3) Incubation 4) Illumination 5) Verification and application

Group Decision Support Systems (GDSS)

Interactive computer based systems that are able to combine communication and decision technologies to help groups make better decisions

Rational decision-making model

A series of steps that decision makers should consider if their goals is to maximize their outcome and make the best choice: 1) Identify problem 2) Establish decision criteria 3) Weight decision criteria 4) Generate alternatives 5) Evaluate alternatives 6) Choose best decision and 7) Implement decision

Nominal group technique (NGT)

A technique designed to help with group decision making by ensuring that members participate fully

Groupthink

A tendency to avoid critical evaluation of ideas the group favors.

Levels of decisions

1) Strategic decisions: made to set the course of an organization (CEOs and Boards of Directors) 2) Tactical decisions: decisions about how things will get done (Managers) 3) Operational decisions: decisions employees make each day to make the organization function (employees throughout the organization)

Decision trees

Diagrams in which answers to yes or no questions lead decision makers to address additional questions until they reach the end of the tree

Decision making

making choices among alternative courses of action, including inaction

Escalation of commitment

occurs when individuals continue on a failing course of action after information reveals it may be a poor path to follow