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