Chapter 11: Making Decisions

Creativity

the generation of new ideas that are original, fluent, and flexible

Majority rule

the principle that the greater number should exercise greater power

Sampling misunderstanding bias

When individuals draw broad conclusions from small sets of observations instead of more reliable sources of information derived from large, randomly drawn samples

Non-programmed decisions

unique, non-routine, and important. these decisions require conscious thinking, information gathering, and careful consideration of alternatives

Escalation of commitment bias

when individuals continue on a failing course of action after information reveals this may be a poor path to follow

Overconfidence bias

when individuals overestimate their ability to predict future events.

Satisficing

when individuals settle for the first acceptable alternative instead of seeking the best possible solution

Programmed decisions

choices that occur frequently enough that we develop an automated response to them

Tactical decisions

decisions about how things will get done

Operational decisions

decisions employees make each day to make the organization function

Strategic decisions

decisions that are made to set the course of an organization

Decision making

making choices among alternative course of action, including inaction

Alternatives

other possible solutions to a problem in the decision making process

Crowd-sourcing

outsourcing a problem to a large group

Bounded rationality model

According to this model, individuals knowingly limit their options to a manageable set and choose the first acceptable alternative without conducting an exhaustive search for alternatives

Correlation and causality

Confusing correlation with causation

SCAMPER

a checklist tool that helps you think of changes can to an existing marketplace to make something new

Analysis paralysis

a decision making process in which more and more time is spent on gathering information and thinking about it, but no decisions actually get made

Decision Trees

a decision support tool that uses a tree-like graph or model of decisions and their possible consequences, including chance event outcomes, resource costs, and utility. It is one way to display an algorithm

Nominal Group Technique (NGT)

a group process involving problem identification, solution generation, and decision making

"premortem"

a managerial strategy in which a manager imagines that a project or organization has failed, and then works backward to determine what potentially could lead to the failure of the project or organization

Delphi Technique

a method of group decision-making and forecasting that involves successively collating the judgments of experts

Brainstorming

a process of generating ideas that follows at set of guidelines, including not criticizing ideas during the process, the idea that no suggestion is too crazy, and building on other ideas (piggybacking)

Rational decision making-model

a series of steps decision makers should consider if their goal is to maximize their outcome and make the best choice

Idea quotas

a set number of ideas a group must reach before they are done with brainstorming

Decision criteria

a set of parameters against which all of the potential options in decision making will be evaluated

Fundamental attribution error

a situation in which good outcome are attributed to personal characteristics, such as intelligence, but undesirable outcomes are attributed to external circumstances, such as the weather

Availability bias

a situation in which information that is more readily available is viewed at more likely to occur

Group think

a tendency to avoid a critical evaluation of ideas the group favors

Wild-storming

a variation of brainstorming in which the group focuses on ideas that are impossible and then imagines what would need to happen to make them possible

Group Decision Support Systems (GDSS)

an interactive, computer-based system that helps a team of decision-makers solve problems and make choices. GDSS are targeted to supporting groups in analyzing problem situations and in performing group decision-making tasks (cf., DeSanctis and Gallupe, 1987; Huber, 1984).

knowledge management systems

any kind of IT system that stores and retrieves knowledge, improves collaboration, locates knowledge sources, mines repositories for hidden knowledge, captures and uses knowledge, or in some other way enhances the KM process.

Intuitive decision-making model

arriving at decisions without conscious reasoning. the model argues that in a given situation, experts making decisions scan the environment for cues to recognize patterns

Decision rule

automate response to problems that occur routinely

Consensus

general agreement

Flexibility

how different the ideas are from each other. if individuals are able to generate several unique solutions to a problem, they are high on flexibility

Originality

how unique a person's ideas are

Devil's advocate

someone who is assigned the role of challenging and questioning the group. this person may prevent the group from premature agreement

Fluency

the number of ideas a person is able to generate

Hindsight bias

the opposite of overconfidence bias as it occurs when a person, looking at the past, judges that a mistake that was made should have been recognized as a mistake at the time

Anchoring and adjustment bias

the tendency for individuals to rely too heavily on a single piece of information

Framing bias

the tendency of decision makers to be influenced by the way that problems are framed

Satisfice

to accept the first alternative that meets minimum criteria