Chapter 7 - BA335

Big Data

Stores of data so vast that conventional database management systems cannot handle them (web-browsing data, social network communications, sensor data, surveillance data)

heuristic

Strategies that simplify the process of making decisions

1. The Availability Bias: Using Only the Information Available 2. The Representativeness Bias: Faulty Generalizing from a Small Sample or a Single Event 3. The Confirmation Bias: Seeking Information to Support One's Point of View 4. The Sunk-Cost Bias: Money Already Spent Seems to Justify Continuing 5. The Anchoring and Adjustment Bias: Being Influenced by an Initial Figure 6. The Overconfidence Bias: Blind to One's Own Blindness 7. The Hindsight Bias: The I-Knew-It-All-Along Effect 8. The Framing Bias: Shaping How a Problem Is Presented 9. The Escalation of Commitment Bias: Feeling Overly Invested in a Decision

There are nine common decision making biases. Give me three. (p 224)

Moneyball Oakland Athletics

What 2012 movie featured the use of data analytics to avoid the use of traditional baseball statistics and find better indicators of player success to make the most of the team's limited payroll resources. Title: (movie name) Team: (city name) (team name) (p 215)

Analytical Conceptual Directive Behavioral

What are the four styles of decision making? (fig 7.4)

(1) It can speed up decision making, useful when deadlines are tight (2) It can be helpful to managers when resources are limited.

What are two benefits of using intuition when making decisions (209)

evidence-based management

the translation of principles based on best evidence into organizational practice, bringing rationality to the decision-making process, routinely trump the competition

business intelligence

Gathering data from a wide range of sources in a way that can be interpreted by humans and used to support better business decision making

consensus

General agreement; group solidarity

Groupthink

A cohesive group's blind unwillingness to consider alternatives. This occurs when group members strive for agreement among themselves for the sake of unanimity and avoid accurately assessing the decision situation

evidence-based decision making

After a year of research, statisticians produced eight rules for becoming an effective manager at G0ogle. What did they say was the most important rule? (Hint: 4 words) (p 212)

rational model of decision making

Also called the classical model; the style of decision making that explains how managers should make decisions; it assumes that managers will make logical decisions that will be the optimum in furthering the organization's best interests

1. Relaxed avoidance 2. Relaxed change 3. Defensive avoidance 4. Panic

Be able to recognize the four ineffective responses to problem solving. (p222)

1. Defer judgment. 2. Build on the ideas of others 3. Encourage wild ideas 4. Go for quantity over quality 5. Be visual 6. One conversation at a time

Be able to recognize the six rules given for brainstorming (fig 7.4)

1. Complete information, no uncertainty 2. Logical, unemotional analysis 3. Best decision for the organization

Be able to recognize the three assumptions of the rational model (Table 7.1)

1. Importance - "How High Priority Is This Situation?" 2. Credibility - "How Believable Is the Information about the Situation?" 3. Urgency - "How Quickly Must I Act on the Information about the Situation?"

Be able to recognize the three effective reactions to deciding to decide? (p224)

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

Be able to recognize the three practical guidelines for when a group can help in decision making (table 7.3)

predictive modeling

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

minority dissent

Dissent that occurs when a minority in a group publicly opposes the beliefs, attitudes, ideas, procedures, or policies assumed by the majority of the group

ethics officer

Individuals trained in matters of ethics in the workplace, particularly about resolving ethical dilemmas

expertise feelings

Intuition can stem from ________, or intuition can be based on ____________. (p 209)

1. Complexity 2. Time and Money Constraints 3. Different cognitive capacity, values, skills, habits, and unconscious reflexes 4. Imperfect information 5. Information overload 6. Different priorities 7. Conflict goals

Lists seven hindrances to perfectly rational decision making. Give me two (figure 7.2)

intuition

Making a choice without the use of conscious thought or logical inference

non-rational models of decision making

Models of 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 decisions

bounded rationality

One type of nonrational decision making; the ability of decision makers to be rational is limited by numerous constraints

satisficing

One type of nonrational decision-making model; managers seek alternatives until they find one that is satisfactory, not optimal

brainstorming

Technique used to help groups generate multiple ideas and alternatives for solving problems; individuals in a group meet and review a problem to be solved, then silently generate ideas, which are collected and later analyzed

analytics

Term used for sophisticated forms of business data analysis, such as portfolio analysis or time-series forecast

descriptive

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.

goal displacement

The primary goal is subsumed to a secondary goal

prescriptive

The rational model is prescriptive, describing how managers ought to make decisions.