MGT Chapter 7

Conceptual

Takes a broad perspective to problem solving Likes to consider many options and future possibilities

Group Think

occurs when group members strive to agree for the sake of unanimity and thus avoid accurately assessing the decision situation

Consensus

occurs when members are able to express their opinions and reach agreement to support the final decision

In deciding to decide, a manager agrees that he or she must decide what to do about a problem or opportunity and take effective decision-making steps.

True

Research shows that most managers have characteristics that fall into two or three decision-making styles, and that decision-making styles vary across occupations, job level, and countries.

True

Satisficing is the tendency of ____

a group to settle on a decision that is "good enough"

Defensive avoidance

manager can't find a good solution and follows by procrastinating, passing the buck, or denying the risk of any negative consequences

Relaxed Avoidance

manager decides to take no action in the belief there will be no great negative consequences

Panic

manager is frantic to get rid of the problem that he can't deal with the situation realistically

Relaxed change

manager realizes that complete inaction will have negative consequences but opts for the first available alternative that involves low risk

With the community interested in eating healthy, Sue Ellen, a restaurant owner, is considering adding more vegetarian dishes to her menu. This decision is uncertain and risky, and she finally decides to go with her gut feelings. This is an example of _______.

non-rational decision making

The predisposition in which people's subjective confidence in their decision making is greater than their objective accuracy is ___

overconfidence bias

The local university is now facing some tough decisions, so they are using the decision tree, which contains individuals, web sites, and organizations that specialize in handling sensitive and difficult decisions.

False A decision tree is a graph of decisions and their possible consequences; it is used to create a plan to reach a goal.

A logic manager is someone trained about matters of ethics in the workplace.

False An ethics officer is someone trained about matters of ethics in the workplace.

Decision making is the process of identifying and choosing individuals who can assist with looking at alternative choices

False Decision making is the process of identifying and choosing alternative courses of action.

Evidence-based management is the use of facts regarding an employee, for example when theft is suspected, and using a database to assist in decision making regarding future action.

False Evidence-based management means translating principles based on best evidence into organizational practice.

Being aware of your decision-making style does not really help a person determine his or her strengths and weaknesses as a decision maker, but it can help them understand when a decision needs to be made.

False Knowledge of styles helps you to understand yourself. Awareness of your style assists you in identifying your strengths and weaknesses as a decision maker and facilitates the potential for self-improvement.

The tendency of people to view events as being more predictable than they really are known as _____.

hindsight bias

Big Data

includes not only data in corporate databases but also web-browsing data trails, social network communications, sensor data, and surveillance data

Benefits of intuition

it can speed up decision making when deadlines are tight It can be helpful when resources are limited

Non-rational models of decision making

it is descriptive rather than prescriptive; they describe how managers actually make decisions

What is wrong with the Rational model?

it is prescriptive, describing how managers ought to make decisions, not how managers actually make decisions

Intuition

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

Decision Making styles

1) Analytical 2) Conceptual 3) Directive 4) Behavioral

Decision-Making Biases

1) Availability 2) Representatives 3) Conformation 4) sunk cost 5) anchoring and adjustment 6) Escalation of commitment 7) Hindsight 8) Framing 9) escalation of commitment

Rules for Brainstorming

1) Defer Judgment 2) Build on the ideas of others 3) Encourage wild ideas 4)Go for quality over quality 5) be visual 6)stay focused 7)one conversation at a time

Advantages of Group Decision Making

1) Greater pool of knowledge 2) Different perspectives 3) Intellectual stimulation 4) Better understanding of decision rationale 5) deeper commitment to the decision

Managers Need to know about Groups

1) They are less efficient 2) Their size affects decision quality 3) They may be too confident 4) Knowledge counts

Disadvantages of Group Decision Making

1) few people dominate 2) group-think 3)Satisfying 4) goal displacement

Steps of Rational Decision Making

1) identify the problem or opportunity 2) Think up alternative solutions 3) Evaluate alternatives and select a solutions 4) Implement and evaluate the solution chosen

What makes it hard to be evidence based

1) there is too much evidence 2) not enough evidence 3) doesnt quite apply 4) people will mislead you 5)you are mislead you 6) side effects outweigh the cure 7) stories are more persuasive anyways

When something goes wrong...

1)face the hard facts 2) Learn what happened and why 3) keep using those facts to make the system better

Satisficing Model

: "satisfactory is good enough." managers seek alternatives until they find one that is satisfactory, not optimal

Patty, the CEO of an oil drilling company, and her top management team recently discovered that their facilities are damaging an Asian beach and the local wildlife. They understand that they need to decide if temporarily closing or not closing the facility is unethical. They then consider the four questions: Is not temporarily closing the facility legal? If yes, does this proposed action maximize shareholder value? If yes, is not temporarily closing the facility ethical? If no, would it be ethical not to take the proposed action? These are suggested questions according to _____.

Bagley's ethical decision tree

Stores of data that are so vast that conventional database management systems cannot handle them, and very sophisticated analysis software and supercomputing-level hardware are required, are known as ____.

Big Data

When a manager is so frantic to get rid of the problem that he or she can't deal with the situation realistically, this is known as ____

Panic

Two approaches managers may take to make decisions:

Rational, Non- rational

Donald, the owner of a popular restaurant, is a religious man, and he needs to make a decision on whether he will add beer and wine to his menu, based on the recommendations of his chefs and others. When confronted with a choice when making a decision, he tends to make his decisions based on his beliefs, even if evidence shows those beliefs are wrong. If his beliefs favor not serving alcohol in his café, according to the prior-hypothesis bias he would choose not to add beer and wine to his menu.

True

During a management workshop, Tony, the HR manager, spoke about making decisions related to firing an employee. He said "I have several rules of thumb in which I use to make a decision. First, I ask if it's legal and then if it's ethical." He then laid out several other steps he uses in the decision-making process related to firing. Tony's rules of thumb are a strategy that he uses in this decision-making process, also known as heuristics.

True

Technology Specialists is an organization specializing in highly specialized technology software, but they found that their original business idea is not working. Rather than failing as a company, they chose a new direction and rewrote their business plan. Technology Specialists is an example of how managers need to think and act as if their organization is an unfinished prototype that won't be ruined by dangerous new ideas or it is impossible to change.

True

Decision Tree

a graph of decisions and their possible consequences used to create a plan to reach a goal

Doug, a new manager, commented to a friend, "I am excited about different aspects of my new job. The company computers have entered the field of decision making. The network not only collects information more quickly, but the system also reduces the roadblocks when I need a group consensus." Doug is referring to _____.

a computer-aided decision-making system

Decision support system

a computer-based information system that provides a flexible tool for analysis and helps managers focus on the future Business intelligence

Sal has been in the landscaping business for over 40 years, and when Donovan, his business partner, suggested adding snow removal as an extra service, Sal responded with "My gut feeling is to say yes because of my experience in the past and what I have seen other companies do over the years, both successfully and not." Sal's response to Donovan is known as _____.

a knowledge dilemma

To help with hiring decisions during peak seasons and holidays, Touching Cards uses time-series forecasts, like sales from last Valentine's Day and Christmas, to predict future sales based on patterns of historical data. This defines ___.

analytics

Diagnosis

analyzing the underlying causes

Readily available information may not present a complete picture of a situation due to ____.

availability bias

Susanne, the CEO of national IT manufacturer, was approached by Simple Phones, a new company that is marketing a new type of phone, to partner with the company on a project. The partnership is uncertain since the company and technology are new. Susanne is uncertain what to do because she is limited by numerous constraints, such as the uncertainty and complexity of the technology, the management success of Simple Phones, and time, since other companies are interested in the partnership. This is an example of _____.

bounded rationality

The rational model of decision making is also called the ____ model.

classical

Marie is a small-business owner who loves to take risks. She also enjoys going out and meeting customers and potential clients—the social aspect of her job. Marie relies on intuition and discussions with others to acquire information. As an interior decorator, Marie utilizes her imaginative strengths, taking a broad perspective to problem solving, and she likes to consider many options and future possibilities. Marie represents a person with a(n) _____ style

conceptual

Analytical

considers more information and alternatives

The prospect theory suggests that ____.

decision makers find the notion of an actual loss more painful than giving up the possibility of a gain

A computer-based information system that provides a flexible tool for analysis and helps managers focus on the future is known as a(n) _____.

decision support system

A graph of decisions and their possible consequences is a ______.

decision tree

The combination of how an individual perceives and responds to information is a reflection of their ____.

decision-making style

Ace Manufacturing has high turnover continually due to issues with the corporate office. Paul, the plant manager, is frustrated and cannot find a solution to stop it. At first he offered raises to many of the good employees who were leaving, but after a while, Paul started blaming those who were leaving, saying, "they are poor-quality employees and they are to blame for leaving." Paul is engaged in ____.

defensive avoidance

Analyzing the underlying causes is the process of ____.

diagnosis

Problems

difficulties that inhibit the achievement of goals

Pat, the human resources manager, has significant experience handling ethical issues in the workplace. Over the years he has received extensive training in matters of workplace ethics, and with a legal background, the management of his company rely on Pat to assist them with legal issues, especially with ethical dilemmas. Pat is a good example of a(n) _____.

ethics officer

Rational model of decision making (Classical Model)

explains how managers should make decisions assumes managers will make logical decisions that will be optimum in furthering the organization's best interests

In the political ads for Representative Joe Smith, the Democratic candidate, he is portrayed by the Republican-sponsored ads as being dishonest and poor at his job. Yet, the ads for Joe Smith, which are paid for by the Democratic supporters, describe him as being caring, honest, and a hard worker. The sponsors of these advertisements know that ads can affect whom voters choose on Election Day. This tendency of decision makers, the voters in this case, to be influenced by how a situation or problem is presented to them is known as ____.

framing bias

Doug is using rational decision making, and the chosen alternative that was implemented does not appear to be working. To correct the situation, the possibilities Doug should consider include _____.

giving it more time, changing it slightly, trying another alternative, or starting over

Salvador, who works as a waiter in a top restaurant in Manhattan, likes the fast pace of his work and the fact that things are always changing there. Salvador can be said to _____.

have a high tolerance for ambiguity

When it comes to decision making, it is accurate to say that groups _____.

have higher decision-making accuracy when group members know a good deal about the relevant issues

Directive

people are efficient, logical, practical, and systematic in their approach to solving problems action oriented, decisive, and like to focus on facts

Difficulties that inhibit the achievement of goals are known as _____.

problems

With defensive avoidance, a manager can't find a good solution and follows by ____.

procrastinating, passing the buck, or denying the risk of any negative consequences

In defensive avoidance, when a manager can't find a good solution, the manager follows with ____.

procrastination, passing the buck, or denying the risk of any negative consequences

The model of decision making that explains how managers should make decisions, assuming managers will make logical decisions that will be the optimum in furthering the organization's best interests, is known as the ____

rational decison-making model

Decision-making style

reflects the combination of how an individual perceives and responds to information Ex: Value orientation, tolerance for ambiguity

The decision was made by BP and Halliburton executives regarding not taking action with the oil well blowout preventer that experts believe would have prevented the Deepwater Horizon oil rig explosion and fire off the coast of Louisiana, since company management believed that there would be no great negative consequences as a result of their decision. This is an example of ___

relaxed avoidance

Dwight, a hotel general manager, is having serious problems—a substance abuse issue—with one of his housekeeping employees. He knows that because of the seriousness of the issue he needs to talk with the employee. However, his assistant manager asks Dwight if he would like him to deal with it. Dwight knows this is not the best option, but agrees, knowing it is the easy way out. This is an example of _____.

relaxed change

Paula, the controller of Tasty Pizza, is purchasing several new delivery vehicles. Paula has numerous work responsibilities, so she has limited time to shop for cars. Because of the time constraints, she cannot make an extensive search for the best alternative but instead needs to look for cars until she finds one that is satisfactory. Paula is following the _____ model.

satisfacing

Opportunities

situations that present possibilities for exceeding existing goals

Ethics Officer

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

Analytics (Business analytics)

sophisticated forms of business data analysis Ex: portfolio analysis, time-series forecast

Bounded Rationality

suggests that the ability of decision makers to be rational is limited by numerous constraints

Malik and his managers spent a large sum of money on the new training program, and they feel that there has been little improvement as a result of the investment. The training is scheduled to continue for two more months, and Malik feels that with all the money already spent on the project, it is too costly to simply abandon it. This is known as ______.

sunk-cost bias

Behavioral

supportive, receptive to suggestions, show warmth prefer verbal to written infor

Brainstorming

technique used to help groups generate multiple ideas and alternatives for solving problems

Anthony, the plant manager, was talking with another manager about Tim, the lead engineer in the corporate R & D department. Anthony remarked that "Tim is so bright, and is an expert in designing products. But like so many experts, he can't imagine what it's like to be as ignorant as the rest of us. I think at times, he cannot see things from an outsider's perspective." This is known as _____.

the curse of knowledge

Big Data analytics

the process of examining large amounts of data of a variety of types to uncover hidden patterns, unknown correlations, and other useful information

Despite your best intentions, it's hard to bring the best evidence to bear on your decisions because of such reasons as ____.

there's too much evidence; there's not enough good evidence and the side effects outweigh the cure

Evidence-based management

translating principles based on best evidence into organizational practice

Principles of Evidence-Based Decision Making

treat your organization as an unfinished prototype no brag, just facts see yourself and your organization as outsiders do not just for executives sell new ideas