mgmt 309 ch 9

recognize and define the decision situation; identify alternatives; evaluate each alternative in terms of feasibility, satisfactoriness, and consequences; select the best alternative; implement the chosen alternative; and follow up and evaluate the results of the chosen alternative

These are the steps in rational decision making

programmed and nonprogrammed

These are the two types of decisions

being aware of the pros and cons of having a group or team make a decision; setting deadlines for when decisions must be made; avoid problems with dominance by managing group membership; have each group member individually critically evaluate all alternatives; do not make the boss position known too early; appoint a group member to be a "devil's advocate"; hold a follow-up meeting to recheck the decision

These are ways managers can promote the effectiveness of group and team decision making

the process takes longer than individual decision making so it is more costly; compromise decisions resulting from indecisiveness may emerge; one person may dominate the group; groupthink may occur

These are the disadvantages to group and team decision making

bounded rationality

A concept suggesting that decision makers are limited by their values an unconscious reflexes, skills, habits; although people try to be rational decision makers, their rationality has limits

state of risk

A condition in which the availability of each alternative and its potential payoffs and costs are all associated with probability estimates

state of uncertainty

A condition in which the decision maker does not know all the alternatives, the risks associated with each, or the consequences each alternative is likely to have

state of certainty

A condition in which the decision maker knows with reasonable certainty what the alternatives are and what conditions are associated with each alternative

escalation of commitment

A decision maker staying with a decision even when it appears to be wrong

programmed decision

A decision that is a fairly structured decision or recurs with some frequency or both

nonprogrammed decision

A decision that is relatively unstructured and occurs rarely or not that often

administrative model

A decision-making model that argues that decision makers (1) use incomplete and imperfect information, (2) are constrained by bounded rationality, (3) tend to "satisfice" when making decisions

coalition

A political force in decision making which consists of an informal alliance of individuals or groups formed to achieve a goal; can be either a positive or negative force

classical decision model

A prescriptive approach that tells managers how they should make decisions; assumes that managers are logical and rational and that their decisions will be in the best interest of the organization

brainstorming

A process where criticism is not allowed, free-wheeling is welcome, quantity is encouraged, and combination and improvement are sought

group think

A situation that occurs when a group or team's desire for consensus and cohesiveness overwhelms its desire to reach the best possible decision; usually happens to avoid conflict among group members

risk of propensity

The extent to which a decision maker is willing to gamble when making a decision; risk avoidance or risk taker

base rate bias

The initial probability given no other information; occurs when people put too much weight on evidence provided, or additional information, and not enough weight on the information provided by the base rate

noisy environment

The link between outcome and actions is hard to predict due to this; ex- accident, too loud or distracting; outside influences

decision making process

The process of recognizing and defining the nature of a decision situation, identifying alternatives, choosing the "best" alternative, and putting it into practice

choice shift

The tendency for groups to make decisions that appear more extreme than the decisions group members would have made on their own (power in #s)

satisficing

The tendency to search for alternatives only until one is found that meets some minimum standard of sufficiency to resolve the problem

lack of consensus

There must be a general agreement of the definition of problems, decisions, and decision making goals at the beginning and when there is not this happens

nominal groups

These are a structured technique designed to generate creative and innovative ideas through the individual contributions of alternatives that are voted on through a series of rank-ordering of the alternatives to reach a decision; forces people to participate by having each member write down their proposed alternative and read it out loud

relationships of the firm to employees, employees to the firm, and the firm to other economic agents

These are components of managerial ethics

Delphi groups

These are sometimes used for developing a consensus of expert opinion from a panel of experts who individually contribute through a moderator; the experts usually write their comments to the moderator and are not in the same room

certainty, risk, or uncertainty

These are the decision making conditions that a decision maker faces and they range in the chances of making a bad decision fro low to high

interacting groups or teams, Delphi groups, nominal groups, brainstorming groups

These are the forms of group and team decision making in organizations

lack of consensus, unclear means-end relations, and noisy environment

These are the three factors that prevent rationality

how emotion affects the decision making process

In the Star Trek movie shown in class with the character Data given an emotion chip this was demonstrated

unclear means-end relations

It is impossible to generate an exhaustive list of alternatives and then select the most promising; this describes

problems and opportunities

Managers make decisions about both

more information and knowledge are available; more alternatives are likely to be generated; more acceptance of the final decision is likely; enhanced communication of the decision may result; better decisions usually emerge

These are the advantages of group and team decision making

decision making

The act of choosing one alternative from among a set of alternatives

profits, sales, employee welfare, and market share

An effective decision is one that optimizes some set of factors such as

intuition

An innate belief about something, without conscious consideration

playing devils advocate can avoid group think

In the movie Secret of My Success with Michael J Fox this was demonstrated

ethics and decision making

Individual ethics (personal beliefs about right and wrong) combine with the organization's ethics to create managerial ethics; this process describes

classical decision model

This decision making model is performed in these steps: when faced with a decision situation managers should obtain complete and perfect information, eliminate uncertainty, evaluate everything rationally and logically and end up with a decision that best serves the interests of the organization

multiply the odds; ex- .9 x .8 x .9 x .8= .52 or 52% not 85% by averaging

This is the base rate method for finding probability

interacting groups or teams

This is the most common form of decision making groups which consists of an existing group or newly formed team interacting and then making a decision

compliance

When group members conform to others' expectations or behaviors in the hope of acquiring rewards or avoiding punishment; ex- boss puts out idea and people respond