Ch 4

Question 1

8 Steps to Decision Making

Answer 1

1. Identify the problem
2. Establish criteria factors
3. Rank the importance on a
   numbered scale
4. Identify suitable solutions
5. Analyze solutions
6. Choose the best solution
7. Execute the best solution
8. Evaluate the performance of the solution

Question 2

Types of Decision Making Problems

Answer 2

1. Structured Problems
2. Unstructured Problems

Question 3

Structured Problems

Answer 3

-straightforward, typical problems
-the goal of the decision maker is clear, the problem is familiar, and the information is complete
-confronted by lower level managers
-handle by using a programmed decision

Question 4

Unstructured Problems

Answer 4

-atypical, new or unusual problems
-the problem is not routine, and information is ambiguous or incomplete
-confronted by top level managers
-handled by a non programmed decision

Question 5

2 Types of Decisions

Answer 5

1. Programmed Decision
2. Non-programmed Decision

Question 6

Programmed Decision

Answer 6

-a repetitive problem handled with the usual routine approach
-relatively, typical simple problems which rely on previous solutions
-used to handle structured problems
-guides used to make programmed decisions:
-procedures
-rules
-policy
-made by lower managers

Question 7

Non-programmed Decision

Answer 7

-unique, non repetitive problem handled with a custom made solution for that particular situation
-used to handle unstructured problems
-made by top managers

Question 8

3 Approaches To Make Decisions

Answer 8

1. rational decision making
2. bounded rationality
3. intuition and managerial decision making

Question 9

rational decision making

Answer 9

describes choices that are consistent and value maximizing within specified constraints

Question 10

bounded rationality

Answer 10

making decisions that are rational within the limits of a mangers ability to process information

Question 11

satisfice

Answer 11

accepting solutions that are good enough

Question 12

intuitive decision making

Answer 12

on the basis of experience, feelings, and accumulated judgment

Question 13

3 Decision Making Conditions Managers Face

Answer 13

1. certainty
2. risk
3. uncertainty

Question 14

certainty

Answer 14

situation where accurate decision is made because all outcomes are known

Question 15

risk

Answer 15

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

Question 16

uncertainty

Answer 16

situation where neither certainty nor reasonable probability estimates are available

Question 17

Pros for group decisions

Answer 17

1. more complete information available
2. more alternatives
3. increased acceptance of a solution
4. greater legitimacy

Question 18

Cons for group decisions

Answer 18

1. time consuming
2. can be dominated by a minority
3. creates pressures to conform
4. clouds responsibility

Question 19

3 ways to improve group decision making

Answer 19

1. brainstorming
2. nominal group technique
3. electronic meetings

Question 20

brainstorming

Answer 20

idea generating process that encourages any and all alternatives while withholding any criticism

Question 21

nominal group technique

Answer 21

restricts discussion during the decision making process

Question 22

electronic meetings

Answer 22

combination of nominal group where participants are linked by computer to send comments, vote, etc. with anonymity, speed, and honesty