Chapter 11: Decision Making

Question 1

Well-Structured Problem

Answer 1

Existing state is clear, desired state is clear, how to get from one state to the other is clear.
- solutions + problem is simple
- familiar and repetitive problems
- non controversial solutions

Question 2

Ill-Structured Problem

Answer 2

Existing state unclear, desired state unclear, how to get from one state to the other is unclear.
- unique + unusual problems and solutions
- complex
- high degree of uncertainty
- controversy + conflict arises

Question 3

Intuition in decision making

Answer 3

good for generating alternative solutions… BUT not reflective enough

Question 4

Non-rational decision making

Answer 4

Not using a model that involves multiple steps when making a decision

Question 5

Rational Decision-Making Model

Answer 5

1. Identify Problem
2. Search for relevant information
3. Develop Alternative Solutions to Problem
4. Evaluate Alternative Solutions to Problem
5. Choose Best Solution
6. Implement Chosen Solution
7. Monitor and Evaluate Chosen Solution

Question 6

What is Framing?

Answer 6

The aspects of presentation of information about a problem that are assumed by decision makers
- How problems and decision alternatives are framed can have a powerful impact on resulting decisions!

Question 7

Information biases of confirmation

Answer 7

Tendency to seek out information that CONFORMS to one’s own definition/solution to a problem.

Question 8

Availability

Answer 8

Using whatever information is readily available, and the tendency to be overconfident which is exacerbated by confirmation bias

Question 9

Not-invented-here Bias:

Answer 9

Tendency to ignore or have negative feelings toward ideas outside of your own organization or project team

Question 10

Analysis Paralysis

Answer 10

When an action or solution cannot be decided in a NATURAL TIME FRAME because of overanalyzing and the decision making becomes paralyzed

Question 11

Base Rates

Answer 11

The tendency to avoid incorporating existing data about the likelihood of events into their decision

Question 12

Satisficing

Answer 12

When a decision maker establishes an ADEQUATE LEVEL OF ACCEPTANCE until they find a solution that exceeds this level.

Question 13

Prospect Theory

Answer 13

1. People tend to seek RISK to avoid LOSS
2. People tend to avoid RISK to hold GAIN

Question 14

Implementation of Solutions

Answer 14

• Solutions need to be implemented
• Problems occur when the one who is implementing the solutions is not the one who made the decision! (conflict, confusion, etc)

Question 15

Escalation of commitment (to a losing action)

Answer 15

Throwing good resources after bad course of action, acting as if costs can be recouped.
Personality, mood, and emotions can affect escalation

Question 16

Name three other Decision Biases

Answer 16

1. Functional Fixedness: The limit set on a person when they only see an object to be used in its traditional way.
2. Survivorship Bias: Concentrating on entities that passed a selection process while overlooking those that did not (successful business man dropping out of college)
3. Ziegarnik Effect: An interruption of a task can help remember it better

Question 17

What is “Test your Thinking”

Answer 17

A test to find out how much you rely on each mode of thinking: Intuitive System 1 or Deliberate System 2

1. A bat and a ball cost $1.10 in total. The bat costs $1.00 more than the ball. How much does the ball cost
2. If it takes 5 machines 5 minutes to make 5 widgets, how long would it take 100 machines to make 100 widgets?
3. In a pond is a patch of lily pads. Every day, the patch doubles in size. If it takes 48 days for the patch to cover the entire pond, how long would it take for the patch to cover half the pond?

Question 18

What is Group Think?

Answer 18

When group pressure damages MENTAL EFFICIENCY, REALITY TESTING, and MORAL JUDGEMENT of decision-making groups.

Question 19

What are the four disadvantages of group decision-making?

Answer 19

1. Time: more people in a group, more time it takes to meet up etc. PROCESS LOSSES
2. Conflict: POLITICAL WRANGLING and INFIGHTING takes over quality decisions
3. Domination: An individual or small group can dominate the meetings
4. Group Think: When group pressure damages mental efficiency, reality testing, and moral judgement in decision-making groups

Question 20

What are the 5 factors that cause Group Think?

Answer 20

1. High group cohesiveness
2. Strong identification with the group
3. Concern for approval
4. Isolation from other info outside of the group
5. The promotion of particular decision by the group leader (most common cause)

Question 21

What are the 8 Group Think Symptoms?

Answer 21

1. Illusion of Invulnerability
2. Illusion of Morality
3. Rationalization
4. Stereotyping outsiders
5. Pressure of Conformity
6. Self-censorship
7. Illusion of Unanimity (consensus)
8. Mind Guards: protecting the group from outside info that goes against decision

Question 22

Crowd Sourcing

Answer 22

Outsourcing aspects of a decision process to a large collection of people (diverse group of people: either decide on single superior solution or on average will decide on the correct solution)

Question 23

When is crowd sourcing best employed?

Answer 23

• in-house expertise is lacking
• the nature of the problem can be clearly stated
• a large + diverse crowd is knowledgeable and motivated to participate