4. Making decisions

Question 1

Decision

Answer 1

making a choice from two or more alternatives.

Question 2

Decision making Process

Answer 2

Step 1: Identify a Problem
Step 2: Identify Decision Criteria
Step 3: Allocate Weights to the Criteria
Step 4: Develop Alternatives
Step 5: Analyze Alternatives
Step 6: Select an Alternative
Step 7: Implement the Alternative
Step 8: Evaluate Decision Effectiveness

Question 3

Rational Decision-Making

Answer 3

describes choices that are logical and consistent while maximizing value.

Question 4

Assumptions of Rationality

Answer 4

• The decision maker would be fully objective and logical
• The problem faced would be clear and unambiguous
• The decision maker would have a clear and specific goal and know all possible alternatives and consequences and consistently select the alternative that maximizes achieving that goal

Question 5

Bounded Rationality

Answer 5

decision-making that’s rational, but limited (bounded) by an individual’s ability to process information.

Question 6

Satisfice

Answer 6

accepting solutions that are “good enough.”

Question 7

Escalation of commitment

Answer 7

an increased commitment to a previous decision despite evidence it may have been wrong.

Question 8

Intuitive decision- making

Answer 8

Making decisions on the basis of experience, feelings, and accumulated judgment.

Question 9

Evidence-based management (EBMgt)

Answer 9

the systematic use of the best available evidence to improve management practice.

Question 10

Structured Problems

Answer 10

straightforward, familiar, and easily defined problems.

Question 11

Programmed decision

Answer 11

a repetitive decision that can be handled by a routine approach.

Question 12

Procedure

Answer 12

a series of sequential steps used to respond to a well-structured problem.

Question 13

Rule

Answer 13

an explicit statement that tells managers what can or cannot be done.

Question 14

Policy

Answer 14

a guideline for making decisions.

Question 15

Unstructured Problems

Answer 15

problems that are new or unusual and for which information is ambiguous or incomplete.

Question 16

Nonprogrammed decisions

Answer 16

unique and nonrecurring and involve custom made solutions.

Question 17

Certainty

Answer 17

a situation in which a manager can make accurate decisions because all outcomes are known.

Question 18

Risk

Answer 18

a situation in which the decision maker is able to estimate the likelihood of certain outcomes.

Question 19

Uncertainty

Answer 19

a situation in which a decision maker has neither certainty nor reasonable probability estimates available.