CH 7: Individual & Group Decision Making Flashcards
decision
choice made among available alternatives
Decision making
Process of identifying and choosing alternative courses of actions
Can be made rationally but is often nonrational
Rational decision making
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
4 steps to rational decision making
1-identify problem/opportunity
2-think of alternative solutions
3-evaluate alternatives and select a solution
4-implement/evaluate the solution chosen
assumptions with the rational model
complete information, no uncertainity
logical unemotional analysis
best decision for the org
complete information, no uncertainity
Assumes that individuals have complete error free information with no uncertainty
logical unemotional analysis
Assumes that people are logical and can complete and unemotional analysis with no prejudices or emotional blind sports
best decision for the org
Assumes that one is confident that this is the best decision of the organization
examples of things getting in the way of perfectly rational decision making
Time and money constraints
Imperfect information
Conflicting goals
More
non rational dec making and types
Assumes that decision making is nearly always uncertain and risky-making it hard for managers to make optimal decisions
Satisficing
Intuition
bounded rationality
Developed in 1950s by herbert simon
Suggest rational decision making is limited by many constraints
Satisficing model
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
Intuition model and what it stems from
Making a choice without the use of conscious thought or logical inference
Stems from
-Expertise:
-Automated experience:
expertise
A person’s explicit and tacit knowledge about a person, a situation, an object, or a decision
Automated experience:
The involuntary emotional response to those same matters
Tips for improving intuition
Trust intuitive judgements
Seek feedback
Test your intuitive success rate
Try visualizing solutions
Challenge your intuition
Evidence based decision making
The translation of principles based on best evidence into organizational practice which brings rationality to the decision making process
7 IMPLEMENTATION PRINCIPLES of EVIDENCE-BASED MANAGEMENT
- Treat your organization as an unfinished prototype.
- Don’t brag, just use facts.
- See yourself and your organization as outsiders do.
- Evidence-based management is not just for senior executives.
- Like everything else, you still need to sell it.
- If all else fails, slow the spread of bad practice.
- The best diagnostic question: What happens when people fail?
business analytics
Fancy forms of business data analysis
Ex- portfolio analysis, time-series forecast
predictive modeling
Data mining technique used to predict future behavior and anticipate the consequences of change
big data
Includes data in corporate databases and also web browsing data trails, social network communications, senor data, and surveillance data
Big data analytics
The process of examining large amounts of data of a variety of types to uncover hidden patterns, unknown correlations, and other useful information
uses of big data
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
Decision making style
Reflects the composition of how an individual perceives/responds to information
Value orientations
Reflects the extent to which a person focuses on either task and technical concerns or on people and social concerns when making decisions
Tolerance for ambiguity
Indicates the extent to which a person has a high need for structure or control in his or her life
decision making styles
conceptual- H tol, ppl focused
analytical- H tol, focused on task
directive- L tol, task focused
behavioral- L tol, ppl focused
Personal knowledge of decision making style
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
4 ineffective reactions to decision making
relaxed avoidance
relaxed change
defensive avoidance
panic
Relaxed avoidance
not taking actions bc of the belief that there will be no big consequences
Relaxed change
Realizing complete inaction will have bad consequences but opts for the first avail alternative
Defensive avoidance
can’t find a good solution so they procrastinate , pass the buck, or denies the risk
Panic
so frantic to get rid of the problem that they can’t deal will the situation realistically
3 effective reactions to decision making
importance, credibility, urgency
importance
- how high priority is the siutation
credibility
how believable is the information in the situation
Urgency
how quickly must i act on the situation
Nine common decision making bias
- The availability bias.
- The representativeness bias.
- The confirmation bias.
- The sunk-cost bias.
- The anchoring and adjustment bias.
- The overconfidence bias.
- The hindsight bias.
- The framing bias.
- The escalation of commitment bias.
