BIS II - Decision Makers & decision Support

Question 1

How can we evaluate the quality of decisions?

Answer 1

• Effectiveness vs. efficiency:
  1. Efficiency = ratio of output/input: “doing the things right”
  2. Effectiveness = the level of goal attainment; “doing the right things”
  3. Important in decision making to focus on effectiveness as well, since decisions affect the organization as a whole in the long-run and the outcome (doing the right thing) should be the focus

Question 2

Decision makers differ with respect to…

Answer 2

• How they think and react to problems
  1. Perceive a problem
  2. Cognitive response
  3. Values and beliefs
• How they proceed when making decisions
  1. Follow different steps/sequences
  2. Give different emphasis, time allotment, and priority to each step
• Decision-making styles
  1. Heuristic vs. analytic
  2. Autocratic vs democratic
  3. Consultative (with individuals or groups)
• Organizational level
  1. Individual
  2. Small organizations
  3. Medium-to-large organizations

Question 3

Individual vs. group decision making

Answer 3

• Individual: usually faster, independent
• Group: diverse information, complex, democratic decisions if culture allows for It; achieving consensus requires more compromises

Question 4

Gut-based decision making

Answer 4

• Heuristics, irrational decision making
• Mostly not as effective (?) but faster
• Available information often not processed correctly