Chapter 7

behavioral style

Most people oriented.

classical decision making

An approach to decision making that tells managers how they should make decisions. Approach assumes that managers are logical and rational. Approach assumes that managers' decisions will be in the best interests of the organization.

analytical style

Careful Decision Makers Who Like Lots of Information & Alternative Choices Managers with an analytical style have a much higher tolerance for ambiguity and are characterized by the tendency to overanalyze a situation. People with this style like to consider more information and alternatives than those following the directive style.

rational decision making

Rational decision making is a multi-step process for making choices between alternatives. The process of rational decision making favors logic, objectivity, and analysis over subjectivity and insigh

consensus

general agreement

bounded rationality

the concept suggests that the ability of decision makers to be rational is limited by numerous constraints, such as complexity, time and money, and their cognitive capacity, values, skills, habits, and unconscious reflexes.

tolerance for ambiguity

the degree to which an individual is comfortable with uncertainty, unpredictability, conflicting directions, and multiple demands. In essence, tolerance for ambiguity is manifest in a person's ability to operate effectively in an uncertain environment.

group think

occurs when group members strive to agree for the sake of unanimity and thus avoid accurately assessing the decision situation. Here the positive team spirit of the group actually works against sound judgment.119

decision making

the process of identifying and choosing alternative courses of action.

decision making style steps

1. identify problem/opportunity 2. think up alternative solutions 3. evaluate alternatives and select a solution 4. implement & evaluate the solution chosen

directive style

Action oriented decision makers who rely on facts. People with a directive style have a low tolerance for ambiguity and are oriented toward task and technical concerns in making decisions. They are efficient, logical, practical, and systematic in their approach to solving problems.

nine common decision-making biases

Among those that tend to bias how decision makers process information are (1) availability, (2) representativeness, (3) confirmation, (4) sunk cost, (5) anchoring and adjustment, (6) overconfidence, (7) hindsight, (8) framing, and (9) escalation of commitment.

conceptual style

Decision Makers Who Rely on Intuition & Have a Long-Term Perspective People with a conceptual style have a high tolerance for ambiguity and tend to focus on the people or social aspects of a work situation. They take a broad perspective to problem solving and like to consider many options and future possibilities.

brainstorming delphi technique

Delphi technique is a group process that uses physically dispersed experts who fill out questionnaires to anonymously generate ideas; the judgments are combined and in effect averaged to achieve a consensus of expert opinion.

non rational/administrative decision making

Nonrational models of decision making explain how managers make decisions; they assume that decision making is nearly always uncertain and risky, making it difficult for managers to make optimal decisions. The nonrational models are descriptive rather than prescriptive: They describe how managers actually make decisions rather than how they should. Two nonrational models are (1) satisficing and (2) intuition.

guidelines for developing intuitive awareness

Open up the closet. To what extent do you experience intuition; trust your feelings; count on intuitive judgments; suppress hunches; covertly rely upon gut feel. 2. Don't mix up your I's. Instinct, Insight, and Intuition are not synonymous; practice distinguishing between your instincts, your insights, and your intuitions. 3. Elicit good feedback. Seek feedback on your intuitive judgments; build confidence in your gut feel; create a learning environment in which you can develop better intuitive awareness. 4. Get a feel for your batting average. Benchmark your intuitions; get a sense of how reliable hunches are; ask yourself how your intuitive judgment might be improved. 5. Use imagery. Use imagery rather than words; literally visualize potential future scenarios that take your gut feelings into account. 6. Play devil's advocate. Test out intuitive judgments; raise objections to them; generate counterarguments; probe how robust gut feel is when challenged. 7. Capture and validate your intuitions. Create the inner state to give your intuitive mind the freedom to roam; capture your creative intuitions; log them before they are censored by rational analysis.

hindrances to rational decision-making

System 1—intuitive and largely unconscious: System 1 operates automatically and quickly; it is our fast, automatic, intuitive, and largely unconscious mode, as when we detect hostility in a voice or detect that one object is more distant than another. System 2—analytical and conscious: System 2 is our slow, deliberate, analytical, and consciously effortful mode of reasoning, which swings into action when we have to fill out a tax form or park a car in a narrow space.

satisficing

accept an available option as satisfactory.

adv/disadv. of group decision making

adv- 1) more knowledge 2)different perspectives 3) intellectual stimulation dis- 1) a few ppl dominate or intimidate 2) satisficting

analytics

business analytics, the term used for sophisticated forms of business data analysis. One example of analytics is portfolio analysis, in which an investment adviser evaluates the risks of various stocks. Another example is the time-series forecast, which predicts future data based on patterns of historical data.

intuition

instinctive feeling

decision support system

is a computer-based information system that provides a flexible tool for analysis and helps managers focus on the future.

predictive modeling

is a data-mining technique used to predict future behavior and anticipate the consequences of change.

ethical decision making/decision making tree

is a graph of decisions and their possible consequences; it is used to create a plan to reach a goal. http://textflow.mheducation.com/figures/1259304213/kin20555_0703.png

decision making style

reflects the combination of how an individual perceives and responds to information. A team of researchers developed a model of decision-making styles based on the idea that styles vary along two different dimensions: value orientation and tolerance for ambiguity

value orientation

reflects the extent to which a person focuses on either task and technical concerns or people and social concerns when making decisions.