MNGT 301 Ch 9
Fu Pan
"Replaying the chessboard"; reviewing every move to improve the next one
Biases that Affect Decision Making
*Being Influenced by initial impressions *Justifying Past Decisions *Seeing what you want to see *Perpetuating the status Quo *Being Influenced by emotions *Being Overconfident
Steps in Managerial Decision Making Process
*Recognition of Decision Requirement *Diagnosis of Causes *Develop Alternatives *Selection of Alternative *Implement alternative *Evaluation & Feedback
A small company that manufactures pet food and toys is planning to start a new line of products that is related to pet health care. The company's top managers meet with potential venture capitalists to discuss the investments for a research and development (R&D) setup. In this case, the company is making a: a. nonprogrammed decision. b. routine decision. c. wicked decision. d. tactical decision. PreviousNext
A
Characteristics of _____________ model are: *Clear-cut problem & goals *Condition of Certainty *Full info about alternatives & their outcomes *Rational choice by individual for maximizing outcomes A. Classical B. Political C. Illustrative D. Administrative
A
The classical model of decision making is considered to be normative, which means that it defines how a decision maker should make decisions. A. True B. False
A
Three Types of Decision Making Models: A. Classical, Administrative, Political B. Intuitive, Experiential, Managerial C. Analytical, Indecisive, Old Way Habits D. Modern, Managerial, Societal
A
Which of the following is a difference between programmed decisions and nonprogrammed decisions? a. Unlike nonprogrammed decisions, programmed decisions are made in response to recurring organizational problems. b. Unlike nonprogrammed decisions, programmed decisions are made in response to situations that are unique and largely unstructured. c. Unlike programmed decisions, nonprogrammed decisions concern the maintenance of a regular supply of raw materials. d. Unlike programmed decisions, nonprogrammed decisions concern the types of skills required to fill certain jobs.
A
While developing alternatives during decision making, managers: a. generate other possible solutions that will respond to the needs of the situation and correct the underlying causes. b. analyze underlying causal factors associated with the decision situation. c. survey the internal and external environment for issues that merit executive attention. d. gather information that tells them how well the decision was implemented and whether it was effective in achieving its goals.
A
Point-counterpoint
A group decision-making technique that breaks people into subgroups and assigns them to express competing points of view regarding the decision
Anchoring Bias
Aspect of being influenced by initial impressions & occurs when we allow initial impressions, statistics, and estimates to act as anchors to our subsequent thoughts and judgments.
Characteristics of ________ model are: *Pluralistic; conflicting goals *Condition of uncertainty or ambiguity *Inconsistent viewpoints; ambiguous information *Bargaining and discussion among coalition members A. Classical B. Political C. Illustrative D. Administrative
B
In the _____ stage of the managerial decision-making process, decision makers gather information that tells them how well the decision was implemented and whether it was effective in achieving its goals. a. diagnosis and analysis of causes b. evaluation and feedback c. development of alternatives d. selection of the desired alternative
B
In the context of personal decision styles, the _____ is used by people who like to consider a broad amount of information and who tend to solve problems creatively. a. analytical style b. conceptual style c. behavioral style d. directive style
B
Making a choice is the biggest part of the decision-making process. A. True B. False
B
Possibility of failure arranged from lowest to highest A. Risk, Certainty, Uncertainty, Ambiguity B. Certainty, Risk, Uncertainty, Ambiguity C. Ambiguity, Certainty, Risk, Uncertainty D. Uncertainty, Certainty, Risk, Ambiguity
B
Types of Decision Styles: A. supervisor, lineman, indicative, process B. directive, analytical, conceptual, behavioral C. psychological, intuitive, supervisor, parenting
B
_________________________ refers to the tendency that managers and organizations have to continue investing time and money in a solution even when there is strong evidence that it is not appropriate. A. After-Action Review B. Escalating Commitment C. Brainstorming D. Groupthink
B
_____________________________ means that decision makers choose the first solution alternative that fulfills minimal decision criteria. A Bounded Rationality B. Satisficing C. Certainty D. Normative
B
A highly ambiguous situation can create what is sometimes called a _____ _____ _____. There is no "right answer" A. Tough Though Process B. Uncertainty Decision Making C. Wicked Decision Problem D. Undecided thought process
C
Bounded rationality, Satisficing, Intuition and quasirationality are all aspects of the _______ model. A. Classical B. Political C. Administrative D. Illustrative
C
Managers with an analytical style of decision making like to: a. consider many broad alternatives and solve problems creatively. b. talk to people one on one and consider the effect of a given decision on them. c. consider complex solutions based on as much data as they can gather. d. make decisions quickly because they do not like to deal with a lot of information.
C
Most experienced use a _________ of style(s) depending on the decision situation. A. Single B. None C. Variety D. strict set
C
Selection of an alternative depends partly on managers' _____________________. A. Risk Avoidance B. Gut Feeling C. Risk Probensity D. Thoughfulness
C
Situation (programmed or non; classical, admin, political; Decision steps) + Personal Decision Style = _________ A. Pi B. The answer to life C. Decision Choice D. A hard choice
C
The ____________ model is most useful when applied to programmed decisions and to decisions characterized by certainty or risk because relevant information is available and probabilities can be calculated. A. Administrative B. Political C. Classcial D. Illustrative
C
Which of the following is true of brainstorming? a. It minimizes people's tendencies to value favored beliefs and viewpoints. b. It means a commitment to make more informed and intelligent decisions. c. It is highly effective for quickly generating a wide range of alternatives. d. It refers to the tendency of people to suppress contrary opinions. PreviousNext
C
Administrative Model
Considered to be descriptive; meaning that it describes how managers actually make decisions in complex situations rather than dictating how they should make decisions according to a theoretical ideal.
Anastasia decides to use most of her savings in opening a café. After a year, she realizes that her café is consistently not making any profits. Instead of closing the café or selling it to a third party, she decides to keep the café open and working in the hope that it will soon become well-known and earn good profits. In the context of the biases that cloud judgment, Anastasia is: a. seeing what she wants to see. b. being influenced by emotions. c. being influenced by initial impressions. d. justifying past decisions.
D
Angelo has decided to set specific rules for reordering office supplies when inventories reach a particular level. He has made this decision so that his subordinates would not have to constantly ask him when they must place orders to refill the company's stock. In the context of managerial decision making, Angelo is making a: a. group decision. b. wicked decision. c. policy decision. d. programmed decision.
D
Characteristics of ________ model are: *Vague Problem & Goals *Condition of uncertainty *Limited info about alternatives & their outcomes *Satisficing choice for resolving problem using intuition A. Classical B. Political C. Illustrative D. Administrative
D
Managers who make the judgment bias of perpetuating the status quo will: a. make choices that justify their past decisions even if the decision is no longer valid. b. give disproportionate weight to the first information they receive. c. look for information that supports their existing point of view while making a decision. d. base decisions on what has worked in the past without exploring new options.
D
Reema is a manager at a fast food restaurant. She uses rational methods to solve day-to-day issues and makes quick decisions that supports the needs of the restaurant. Reema encourages her team members to adhere to existing rules and policies when they make their own decisions and come up with simple solutions to problems. In the context of personal decision styles, Reema is a manager who follows a(n) ______. a. conceptual style b. behavioral style c. analytical style d. directive style
D
When managers base decisions on what has worked in the past and fail to explore new options, they are _______________________. A. Being Ignorant B. Narrow minded C. not good managers D. Perpetuating the Status Quo
D
Being overconfident
Most people overestimate their ability to predict uncertain outcomes.
Seeing What You Want to See Bias
People frequently look for information that supports their existing instinct or point of view; can affect where managers look for information, as well as how they interpret the information that they find.
Directive Decision Style
People who prefer simple, clear-cut solutions to problems
Confirmation Bias
Some managers have a tendency to put too much value on evidence that is consistent with a favored belief or viewpoint and too little on evidence that contradicts their favored position
Sunk Cost Effect
The tendency to continue investing in a failing project in the hope of turning it around
Decision
a choice made from available alternatives
Devils Advocate
a person who is assigned the role of challenging the assumptions and assertions made by the group. This person's statements and questions can prevent premature consensus.
Certanity
all the information the decision maker needs is fully available
Coalition
an informal alliance among managers who support a specific goal.
Wicked Decision Process
are associated with 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.
Classical Model
based on rational economic assumptions and manager beliefs about what ideal decision making should be
Electronic Brainstorming
brings people together in an interactive group over a computer network rather than meeting face to face.
Quasirationality
combines intuitive and analytical thought
Risk
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.
Brainstorming
face-to-face interactive group to spontaneously suggest as many ideas as possible for solving a problem. found to be highly effective for quickly generating a wide range of alternatives *But has downsides
Being influenced by initial impressions
hen considering decisions, the mind often gives disproportionate weight to the first information it receives.
Programmed Decisions
involve situations that have occurred often enough to enable decision rules to be developed and applied in the future. Made in response to recurring organizational problems
After-Action Review
is a disciplined procedure whereby managers review the results of decisions to evaluate what worked, what didn't, and how to do things better.
5 Whys
is a question asking technique that can help diagnose the root cause of a specific problem.
Opportunity
is a situation in which managers see potential organizational accomplishments that exceed current goals.
Problem
is a situation in which organizational accomplishments have failed to meet established goals.
Evidence-based decision making
is founded on a commitment to examining potential biases, seeking and examining evidence with rigor, and making informed and intelligent decisions based on the best available facts and evidence.
Diagnosis
is the step in which managers analyze underlying causal factors associated with the decision situation.
Conceptual Decision Style
like to consider a broad amount of information. However, they are more socially oriented than those with an analytical style and like to talk to others about the problem and possible alternatives for solving it.
Analytical Decision Style
like to consider complex solutions based on as much data as they can gather. These individuals carefully consider alternatives and often base their decisions on objective, rational data from management control systems and other sources. They search for the best possible decision based on the information available.
Being influenced by emotions
made a decision when you were angry, upset, or extremely happy
nonprogrammed decisions
made in response to situations that are unique, are poorly defined and largely unstructured, and have important consequences for the organization. Many are related to strategic planning because uncertainty is great and decisions are complex.
Justifying Past Decisions
managers fall into the trap of making choices that justify their past decisions, even if those decisions no longer seem valid.
Uncertainty
managers know which goals they wish to achieve, but information about alternatives and future events is incomplete. Managers face everyday, but they rely on creativity, judgement, intuition and experience
Satisficing
means that decision makers choose the first solution alternative that satisfies minimal decision criteria.
Bounded Rationality
means that people have limits, or boundaries, on how rational they can be.
Ambiguity
most difficult decision situation; means that the goals to be achieved or the problem to be solved is unclear, alternatives are difficult to define, and information about outcomes is unavailable.
Behavioral Decision Style
often the style adopted by managers having a deep concern for others as individuals. Managers using this style like to talk to people one on one, understand their feelings about the problem, and consider the effect of a given decision on them.
Risk Propensity
or their willingness to undertake risk with the opportunity of gaining an increased payoff. Selection of an alternative on managers' ________
decision making
process of identifying problems and opportunities and then resolving them.
Decision Styles
refer to distinctions among people with respect to how they evaluate problems, generate alternatives, and make choices.
Escalating Commitment
refers to continuing to invest time and money in a decision despite evidence that it is failing.
Groupthink
refers to the tendency of people in groups to suppress contrary opinions.
Intuition
represents a quick apprehension of a decision situation based on past experience but without conscious thought.
Implementation
step involves using managerial, administrative, and persuasive abilities to translate the chosen alternative into action.
Political Model
useful for making nonprogrammed decisions when conditions are uncertain, information is limited, and there are manager conflicts about what goals to pursue or what course of action to take.
