Principles of Management - Chapter 6

descriptive

An approach that describes how managers actually make decisions rather than how they should make decisions according to a theoretical ideal. (Often associated with the administrative model)

wicked decision problem

Highly ambiguous circumstances can create a wicked decision problem, the most difficult decision situation that managers face.

Four major decision styles

directive, analytical, conceptual, and behavioral.

quasi rationality

new trend in decision making, combines intuitive and analytical thought.

Political model

takes into consideration that many decisions require debate, discussion, and coalition building.

uncertainty

The situation that occurs when managers know which goals they wish to achieve, but information about alternatives and future events is incomplete.

diagnosis

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

implementation

The step in the decision-making process that involves using managerial, administrative, and persuasive abilities to translate the chosen alternative into action.

group think

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

risk propensity

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

satisficing

To choose the first solution alternative that satisfies minimal decision criteria, regardless of whether better solutions are presumed to exist.

decision

A choice made from available alternatives.

non-programmed decision

A decision made in response to a situation that is unique, is poorly defined and largely unstructured, and has important consequences for the organization.

ambiguity

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

programmed decision

A decision made in response to a situation that has occurred often enough to enable decision rules to be developed and applied in the future.

The decision-making process typically involves six steps

1. recognition of the need for a decision 2.diagnosing causes, developing alternatives 3.selecting an alternative 4.implementing the alternative 5.evaluating decision effectiveness.

classical model

A decision-making model based on the assumption that managers should make logical decisions that will be in the organization's best economic interests. The classical model is normative, meaning that it defines how a manager should make logical decisions and provides guidelines for reaching an ideal outcome.

administrative model

A decision-making model that describes how managers actually make decisions in situations characterized by nonprogrammed decisions, uncertainty, and ambiguity.

devil's advocate

A decision-making technique in which an individual is assigned the role of challenging the assumptions and assertions made by the group, to prevent premature consensus.

point-counterpoint

A decision-making technique in which people are assigned to express competing points of view.

risk

A situation in which a decision has clear-cut goals and good information is available, but the future outcomes associated with each alternative are subject to chance.

opportunity

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

Problem

A situation in which organizational accomplishments have failed to meet established goals.

brainstorming

A technique that uses a face-to-face group to spontaneously suggest a broad range of alternatives for decision making.

normative

An approach that defines how a decision maker should make decisions and provides guidelines for reaching an ideal outcome for the organization.

coalition

An informal alliance among managers who support a specific goal or solution.

electronic brainstorming

Bringing people together in an interactive group over a computer network to suggest alternatives rather than face-to-face; sometimes called brain writing.

escalating commitment

Continuing to invest time and resources in a failing decision.

decision styles

Differences among people with respect to how they perceive problems and make decisions.

fu pan

Managers at Lenovo apply a technique called fu pan, which means "replaying the chessboard," reviewing every move to improve the next one.

bounded rationality

The concept that people have the time and cognitive ability to process only a limited amount of information on which to base decisions.

decision making

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

Intuition

The quick comprehension of a decision situation based on past experience but without conscious thought (an aspect of administrative decision-making).

certainty

The situation in which all the information the decision maker needs is fully available.

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.