Ch. 6

Quasi Rationality

combining intuitive and analytical thought

Devil's advocate

has the role of challenging the assumptions and assertions made by the group

Administrative model

includes the concepts of bounded rationality and satisficing and describes how managers make decisions in situations that are characterized by uncertainty and ambiguity

Programmed decisions

involve situations that have occurred often enough to enable decision rules to be developed and applied in the future

Implementation

involves using managerial, administrative, and persuasive abilities to translate the chosen alternative into action

Nonprogrammed decisions

made in response to situations that are unique, are poorly defined and largely unstructured, and have important consequences for the organization

Classical model

model of social movements based on a concept of structural weakness in society that results in the psychological disruption of individuals

Larry's company has decided to no longer lease office space and instead have all employees work from home. Larry needs to make a _______ as he figures out how the newly dispersed workforce can cost-effectively order office supplies.

nonprogrammed decision

Behavioral styles

-Deep concern for others as individuals -Talk to people one on one -Understand feelings and effect -Concerned with personal development of others.

Kyle prefers to base decisions on lots of data, both objective data from information systems and qualitative data from people.

An example of conceptual style

Coalition

An informal alliance among managers who support a specific goal or solution (coalition building)

wicked decision problem

Conflicts over goals and decision alternatives, rapidly changing circumstances, fuzzy information unclear links among decision elements, and the inability to evaluate whether a proposed solution will work.

Group think

The tendency of people in groups to suppress contrary opinions in a desire for harmony.

Sunk cost effect

The tendency to continue investing in a failing project in the hope of turning it around.

Confirmation bias

The tendency to put too much value on evidence that is consistent with a flavored belief or view-point and too little on evidence that contracts it.

Conceptual styles

-Consider a broad amount of information -Socially oriented and like to talk to others about the problem and possible alternatives for solving it. -Solve problems creatively

Analytical styles

-Consider complex solutions based on much data -Consider alternatives, base their decisions on objective, rational data from management control systems and other sources.

As you advance in your career, you are aware that the way you approach decisions will probably evolve. Senior-level managers who make good decisions typically:

-Identify all the stakeholders who should be involved in making the decision -Seek out different perspectives on the situation -Take the time needed to reason through the decision in a systematic way -Do not engage others in discussion of possibilities because doing so causes confusion

Which of the following is not an assumption of the classical model of decision making? -Managers determine all possible alternatives and the potential outcomes of each choice they could make. -Managers will use intuition rather than rational analysis to make sound decisions when information is incomplete. -Managers use logic to evaluate options and maximize the attainment of organizational goals. -Managers seek to achieve agreed-upon goals and solve precisely defined problems.

-Managers will use intuition rather than rational analysis to make sound decisions when information is incomplete.

directive style

-Simple, clear-cut solutions to problems -Make decisions quickly -Efficient, rational, prefer to rely on existing rules or procedures for making decisions.

What are 6 biases that managers have?

1. Being influenced by initial impressions 2. Justifying past decisions 3. Seeing what you want to see 4. Perpetuating the status group 5. Being influenced by emotions 6. Being overconfident

What are the Decision-Making steps?

1. Recognition of Decision Requirements 2. Diagnosis and Analysis of Causes 3. Development of Alternatives 4. Selection of Desired Alternative 5. Implementation of chosen alternative 6. Evaluation and feedback

Risk

A decision has clear-cut goals and that good information is available, but the future outcomes associated with each alternative are subject to some chance of loss or failure.

After-Action review

A disciplined procedure whereby managers review the results of decisions to evaluate what worked, what didn't, and how to do things better.

The political model

A model of decision making that acknowledges that most organizational decisions involve many managers who have different goals and who have to share information to reach an agreement. Nonprogrammed decisions.

5 whys

A technique in which you repeatedly ask the question "Why?" to help peel away the layers of symptoms that can lead to the root cause of a problem

Bill prefers simple, clear-cut solutions to problems.

An example of Directive style

When making a decision, Josie likes to talk to people one on one to find out how the decision will affect them.

Behavioral style

Proposed by Herbert A. Simon, ________________means that managers are limited in the extent to which they can use the classical model of decision making, because they only have so much time and ability to process information.

Bounded rationality

Electronic brainstorming

Brainstorming that takes place in an interactive group over a computer network, rather than meeting face to face.

Across different situations, the most effective managers ___________ decision style.

Change their

Programmed decision alternatives

Easy to identify Usually are already available within the organization's rules and procedures.

If you work in a complex organization in which you see the political model of decision making at work, which of the following is likely true about your organization?

Managers have different interests and are pursuing different goals

Uncertainty

Managers know how goals they wish to achieve, but information about alternatives and future events is incomplete.

Certainty

Means that all the information the decision maker needs is fully available.

You have a budget of $50,000, and you want to remodel your kitchen. Fortunately, you know a number of different contractors, but all of them have different ideas about the best way to remodel a kitchen. Your decision about which contractor to use is a:

Nonprogrammed Decision

Bob is a student at Fresno State University who recently got his first F. Now he has to make a decision about how to get his grades back up. Having recently taken a class on decision making, Bob decides to follow the six-step process for deciding what to do. What problem is Bob most likely to face during the recognition of decision requirement step in the decision-making process?

Not being aware enough of things going on around him to see where problems and opportunities exist

Problem

Organizational accomplishments have failed to meet established goals

The front office staff at Marriott Hotels has a preshift meeting at 7:00 AM every morning. As general manager, you are expected to attend these meetings. The decision you make every day about what time you will arrive at work is a:

Programmed Decision

Escalating commitment

Refers to continuing to invest time and money in a decision despite evidence that it is failing.

Intuition

Represents a quick apprehension of a decision situation based on past experience but without conscious thought.

Nonprogrammed decision alternatives

Require developing new courses of action that will meet the company's needs.

Discriptive

The administrative model, it describes how managers actually make decisions in complex situations rather than dictating how they should make decisions according to a theoretical ideal.

Normative

The classical model defines how a decision maker should make decisions. Managers should make logical decisions and provides guidelines for reaching an ideal outcome.

What is an example of programmed decisions?

The decision to reorder paper and other office supplies when inventories drop to a certain level.

Ambiquity

The goals to be achieved or the problem to be solved is unclear, alternatives are difficult to define, and information about outcomes is unavailable.

Decision making

The process of identifying problems and opportunities and then resolving them.

Diagnosis

The step in which managers analyze underlying causal factors associated with the decision situation.

Selim is a sales manager for the Bratney Companies, a company that manufactures equipment used in the processing of grains and other produce. Every year, Selim must submit a request for the number of new sales representatives to be hired in the next year. Selim's goal is clear—he must have enough sales reps to service all of Bratney's customers—but it is often difficult to predict how many customers the company will have. Sales are dependent on the economy, weather, farming trends, and a large number of other environmental factors. Selim's decision about how many sales reps to hire is being made under conditions of________, because:

Uncertainty; The goal is clear, but there is no clear solution to the problem

Brainstorming

Uses a face-to-face group to spontaneously suggest a broad range of alternatives for making a decision.

Anchoring bias

When a manager allows initial impressions, statistics, or estimates to act as anchors to subsequent thoughts and decisions

Evidence-based decision making

a commitment to make more informed and intelligent decisions based on the best available facts and evidence

Opportunity

a situation in which managers see potential organizational accomplishments that exceed current goals

The most difficult decision-making situation is __________, because the problem to be solved is unclear, alternatives are difficult to define, and information about outcomes is unavailable.

ambiguity

When managers meet to analyze the results of decisions, this is _______________, and the purpose is to ____________ the decisions and their outcomes.

an after-action review; learn from

Point-counterpoint

breaks a decision-making group into two subgroups and assigns them different, often competing, responsibilities

Decision

choice made from among available alternatives

Constructive conflict

conflict that helps build new insights and establishes new patterns in a relationship

Satisficing

decision makers choose the first solution that satisfies minimal decision criteria

Classical Model

decision making is based on rational economic assumptions and manager beliefs about what ideal decision making should be

Decision styles

differences among people with respect to how they perceive problems and make choices

Managers who use evidence-based decision making rely on ________ rather than on ___________.

facts; rules of thumb

Bounded rationality

people have limits or boundaries on how rational they can be

Risk propensity

willingness to undertake risk with the opportunity of gaining an increased payoff