CH 7: Individual & Group Decision Making

Question 1

decision

Answer 1

choice made among available alternatives

Question 2

Decision making

Answer 2

Process of identifying and choosing alternative courses of actions

Can be made rationally but is often nonrational

Question 3

Rational decision making

Answer 3

Explains how managers SHOULD make decisions

Assumes managers will make logical decisions that will be optimal in furthering orgs best interests

Also called the classical model

Question 4

4 steps to rational decision making

Answer 4

1-identify problem/opportunity
2-think of alternative solutions
3-evaluate alternatives and select a solution
4-implement/evaluate the solution chosen

Question 5

assumptions with the rational model

Answer 5

complete information, no uncertainity

logical unemotional analysis

best decision for the org

Question 6

complete information, no uncertainity

Answer 6

Assumes that individuals have complete error free information with no uncertainty

Question 7

logical unemotional analysis

Answer 7

Assumes that people are logical and can complete and unemotional analysis with no prejudices or emotional blind sports

Question 8

best decision for the org

Answer 8

Assumes that one is confident that this is the best decision of the organization

Question 9

examples of things getting in the way of perfectly rational decision making

Answer 9

Time and money constraints
Imperfect information
Conflicting goals
More

Question 10

non rational dec making and types

Answer 10

Assumes that decision making is nearly always uncertain and risky-making it hard for managers to make optimal decisions

Satisficing
Intuition

Question 11

bounded rationality

Answer 11

Developed in 1950s by herbert simon
Suggest rational decision making is limited by many constraints

Question 12

Satisficing model

Answer 12

Bc of the many constraints, managers don’t make an exhaustive search for the best alternative/ decisions

They seek alternative that is satisfactory not optimal

Question 13

Intuition model and what it stems from

Answer 13

Making a choice without the use of conscious thought or logical inference

Stems from
-Expertise:
-Automated experience:

Question 14

expertise

Answer 14

A person’s explicit and tacit knowledge about a person, a situation, an object, or a decision

Question 15

Automated experience:

Answer 15

The involuntary emotional response to those same matters

Question 16

Tips for improving intuition

Answer 16

Trust intuitive judgements
Seek feedback
Test your intuitive success rate
Try visualizing solutions
Challenge your intuition

Question 17

Evidence based decision making

Answer 17

The translation of principles based on best evidence into organizational practice which brings rationality to the decision making process

Question 18

7 IMPLEMENTATION PRINCIPLES of EVIDENCE-BASED MANAGEMENT

Answer 18

1. Treat your organization as an unfinished prototype.
2. Don’t brag, just use facts.
3. See yourself and your organization as outsiders do.
4. Evidence-based management is not just for senior executives.
5. Like everything else, you still need to sell it.
6. If all else fails, slow the spread of bad practice.
7. The best diagnostic question: What happens when people fail?

Question 19

business analytics

Answer 19

Fancy forms of business data analysis
Ex- portfolio analysis, time-series forecast

Question 20

predictive modeling

Answer 20

Data mining technique used to predict future behavior and anticipate the consequences of change

Question 21

big data

Answer 21

Includes data in corporate databases and also web browsing data trails, social network communications, senor data, and surveillance data

Question 22

Big data analytics

Answer 22

The process of examining large amounts of data of a variety of types to uncover hidden patterns, unknown correlations, and other useful information

Question 23

uses of big data

Answer 23

Analyzing consumer behavior
Improving hiring and personnel management.
Tracking movies, music, TV, and reading data.
Exploiting farm data.
Advancing health and medicine.
Aiding public policy

Question 24

Decision making style

Answer 24

Reflects the composition of how an individual perceives/responds to information

Question 25

Value orientations

Answer 25

Reflects the extent to which a person focuses on either task and technical concerns or on people and social concerns when making decisions

Question 26

Tolerance for ambiguity

Answer 26

Indicates the extent to which a person has a high need for structure or control in his or her life

Question 27

decision making styles

Answer 27

conceptual- H tol, ppl focused

analytical- H tol, focused on task

directive- L tol, task focused

behavioral- L tol, ppl focused

Question 28

Personal knowledge of decision making style

Answer 28

Helps you understand yourself and facilitates self improvement

Can increase your ability to influence others

Gives you awareness of how people can use same info to arrive at diff decisions

Question 29

4 ineffective reactions to decision making

Answer 29

relaxed avoidance
relaxed change
defensive avoidance
panic

Question 30

Relaxed avoidance

Answer 30

not taking actions bc of the belief that there will be no big consequences

Question 31

Relaxed change

Answer 31

Realizing complete inaction will have bad consequences but opts for the first avail alternative

Question 32

Defensive avoidance

Answer 32

can’t find a good solution so they procrastinate , pass the buck, or denies the risk

Question 33

Panic

Answer 33

so frantic to get rid of the problem that they can’t deal will the situation realistically

Question 34

3 effective reactions to decision making

Answer 34

importance, credibility, urgency

Question 35

importance

Answer 35

• how high priority is the siutation

Question 36

credibility

Answer 36

how believable is the information in the situation

Question 37

Urgency

Answer 37

how quickly must i act on the situation

Question 38

Nine common decision making bias

Answer 38

1. The availability bias.
2. The representativeness bias.
3. The confirmation bias.
4. The sunk-cost bias.
5. The anchoring and adjustment bias.
6. The overconfidence bias.
7. The hindsight bias.
8. The framing bias.
9. The escalation of commitment bias.