Chapter 11 Flashcards

1
Q

Decision-making

A

process of developing a commitment to some course of actions

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2
Q

Well-structured problems

A

existing state and desired state are clear (how to get from one to the other is clear):

  • > repetitive and familiar (can be programmed)
  • > go directly from problem to solution
  • > rules, routines, standard operating procedures
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3
Q

Ill-structured problem

A

existing state and desired are unclear and method is unknown:

  • > unique and unusual problems not discovered before
  • > high degree of uncertainty
  • > arouse controversy and conflict
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4
Q

Perfect rationality

A

decision strategy completely informed, logical, toward economic gain

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5
Q

prototype for perfect rationality

A

economic person: one criterion for decision making and it is cost

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6
Q

bounded rationality

A

try to act rationally but limited to their capacity to acquire and process information, time constraints, political considerations

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7
Q

framing and cognitive biases are to operations of bounded rationality what

A

emotions and moods are to decision making

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8
Q

Framing

A

huge impact on how we interpret situations: the presentation of information

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9
Q

Cognitive bias

A

tendencies to acquire and process information in a particular way prone to error; involve assumptions & shortcuts

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10
Q

Problem identification and framing

A

bounded rationality can lead to the following difficulties in problem identification:

  • > perceptual defence
  • > defined in terms of functional specialty
  • > defined in terms of solution
  • > diagnosed in terms of symptoms
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11
Q

Information search

A

perfect rational decision maker has instant and free access to all information to clarify problem and find alternatives
bounded rationality decision makers say info cost can be slow and costly

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12
Q

too little info

A

cognitive biases because using info most readily available but not always good info –> can lead to confirmation bias where you see only the information that confirms your own opinion

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13
Q

Too much info

A

information overload: reception of more than necessary to make decisions
cognitive bias of value paid for advice over free even if = in value

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14
Q

perfect rational decision maker exhibits

A

maximization: the alternative with greatest expected value

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15
Q

bounded rationality decision maker

A

does not know all possible alternatives

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16
Q

satisficing

A

decision maker reaches adequate level of acceptability and then screens solutions to find one that will exceed it

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17
Q

who uses satisficing the most?

A

bounded rationality decision makers

18
Q

Risky business

A

problem as choice between losses –> risky decisions
problems from alternative gains –> conservative decisions
“example of framing”

19
Q

Justification

A

people are overconfident about the adequacy of their decisions
substantial dissonance can happen when a decision is faulty
the decision maker can devote time to justify a faulty decision

20
Q

Hindsight

A

tendency to review the decision-making process to find what was done right or wrong –> take personal responsibility when positive outcome and deny when unsuccessful

21
Q

escalation of commitment

A

tendency to invest additional resources in an already failing course of action (groups > individuals)

22
Q

Reasons for escalation of commitment

A
dissonance reduction
social norms for consistent behavior
motivation to not appear wasteful
the way the problem is framed
personality, moods and emotions
23
Q

Preventing escalation of commitment

A
  • > continuous experimentation with reframing the problem (saving rather than spending)
  • > Set specific goals for the project in advance that must be met if more resources are invested
  • > place more emphasis in evaluating managers on how they make decisions
  • > separate initial and subsequent decision making
24
Q

emotions and moods and decision making

A

strongly emotions correct ethical errors
strong emotion = creative decision-making = intuition to solve problem
BUT can hinder because leads to self focused

25
Moods
affect what and how people think in making decisions
26
people in positive mood
remember positive information & evaluate object, people and events positively
27
people in good mood
overestimate the likelihood that good events will occur and underestimate the likelihood of bad ones
28
positive moods promote
creative, intuitive decision making
29
moderate optimism
creative decisions
30
moderate pessimism
process info carefully and effectively
31
Pros to using groups to make decisions
Decision quality (vigilant, more ideas, evaluate better) Decision acceptance and commitment (to be approved by a group means it will be approved by more people) Diffusion of responsibility: ability of group members to share the burden/load of negative (punishment for all)
32
Cons to using groups to make decisions
Time (takes more because process losses), Conflict (better decisions when psychologically safe), domination (one individual = not taking advantage of pros), groupthink
33
Group think
capacity for group pressure to damage mental efficiency, reality testing + unanimous is more important than quality
34
factors that contribute to group think
``` high group cohesiveness strong identification with the group concern for approval of the group isolation from the group promotion of particular decision by group leader ```
35
Group think symptoms
illusion of invulnerability: overconfident illusion of unanimity: perception of unanimity for chosen decision illusion of morality: group decisions = moral decisions rationalization: justify somehow stereotypes of outsiders: unfavourable to outside group Pressure for conformity: pressure each other to fall in line and conform self-censorship: avoid voicing opinions contrary to group's Mind guards: members to protect the group from information against decisions
36
strategies to prevent groupthink
encourage and reward responsible dissent | Outside experts to challenge the group's view
37
groups handle risk
group discussions ->new ideas | group members -> better than others but similar
38
risky shift
riskier than average advocated by members
39
conservative shift
less risky than average by members
40
Rational decision making model
1. Identify problem 2. Search for relevant information 3. Develop alternative solutions 4. Evaluate alternative solutions 5. Choose the best solutions 6. Implement the chosen solution 7. Monitor and evaluate the chosen solution